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Fighting The Big G

GS Paper 3

Syllabus: Indian Economy

Source: TOI

Context: Google this week began to change the business model used in India to push its Android operating system (OS) and the Google Play Store.

  • The change was triggered by the Supreme Court setting January 26 as the deadline for Google to comply with the Competition Commission of India’s rulings.

 

The Changes made by Google:

  • In the new model, instead of creating a bouquet of apps, smartphone makers can license individual apps from Google.
  • Google’s search engine will not necessarily be the default setting

 

What is the ‘walled garden approach’ adopted by Google:

Android’s dominance (under-walled garden approach) is based on a complex model of cross-subsidies. Google offers free services such as a search engine and email, thereby making a huge user base. This user base is then monetised for advertising revenue. Even third-party apps cannot all wish away Google. Google controls both sides of this advertising ecosystem- the users as well as third-party app developers, making it a walled garden.

 

Other initiatives taken to break Google’s monopoly:

  • South Korea: It imposed curbs on the proprietary billing system of Google and Apple.
  • EU’s upcoming Digital Markets Act: It will prevent “gatekeepers” from engaging in anti-competitive behaviour. It will no longer be business as usual for the Android OS ecosystem

 

Previously, the Competition Commission of India (CCI) had imposed a penalty ( and upheld by the supreme court) on Alphabet-owned Google for “abusing its dominant position” in markets related to the Android mobile device ecosystem.

  • The CCI stated that Google contravened competition law due to mandatory pre-installation of the entire Google Mobile Suite (GMS)and there was no option to uninstall the same.

  

What are anti-trust laws? 

Antitrust laws are regulations that encourage competition by limiting the market power of any particular firm. Essentially, these laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for products and services. In India, The Competition Act, 2002 regulates such activities.

 

About CCI

The Competition Commission of India (CCI, constituted in 2009) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002. The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of the Raghavan committee.

  • It consists of one Chairperson and six Memberswho shall be appointed by the Central Government.
  • The Competition Act, 2002 (amended in 2007) prohibits anti-competitive agreements, and abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which cause or are likely to cause an appreciable adverse effect on competition within India.

Insta Links

Apple faces antitrust case in India over apps issue

 

Prelims link

  1. What is an anti-trust case?
  2. CCI- roles, responsibilities and functions
  3. Important anti-trust-related cases
  4. Competition Commission Act

Mains link

Q. Ensuring fair competition in the Indian digital market is in the best interest of every stakeholder involved. Comment. (10M)