Recently it was reported that the supreme court of India will hear Google’s Appeal on 10th Oct 2023 – its filing against the recent CCI’s judgments. CCI (Competition Commission of India) of India vide its order dated 20th Oct 2022 & 25th Oct 2022 has imposed penalties (Rs 1337 & 936 Cr) on Google and also asked the company to comply with its suggested remedies. NCLAT – the appellate body, by its order dated 29th March 2023, upheld most remedies, barring a few. The purpose of this note is to discuss the key issue in simple layman’s terms and understand what possible leverage Google has (legal vs business) in preventing the dilution of its business interests.
The Background
At the time when mobiles were becoming pervasive, Google in July 2005 acquired and nurtured the “Android” Operating System for mobiles, which mirrors the “Windows” Operating System for desktops. The key difference between the two is that “Android” was designed for optimal functionality in a mobile environment, just like “Windows” was for desktops. Now in order to make the OS popular Google started to give it “free” to the mobile phone manufacturers, quite unlike “Windows”, whose license had to be purchased by the end user. This created a win-win situation for both Google and the phone manufacturers. Google through a batter system, was able to position its key apps prominently on the home screen, and in return, the mobile manufacturers got the best-in-class OS without spending a dime – the cost of which otherwise could have been significant. Google’s objective was to get access to as many users (customers) as possible (through its prominently positioned apps) so that it can sell more ADs, whereas the mobile phone manufacturer’s aim was to make their devices useful for their customers from day 1. Hence, to support that objective Google developed a “Play Store” (app store) – which has now become the most popular and preferred way to distribute applications on smartphones.
