The Competition Commission of India (“CCI”) vide its order dated November 09, 2020 directed the Director General to cause an investigation against Google for alleged violation of provisions of Section 4 of the Competition Act, 2002 (“Act”).
An information under Section 19(1)(a) was filed by XYZ (“Informant”) against Alphabet Inc. (“OP-1”), Google LLC (“OP-2”), Google Ireland Limited (“Google Ireland/ OP-3”), Google India Private Limited (“Google India/ OP-4”) and Google India Digital Services Private Limited (“Google Digital Services/ OP-5”) alleging contravention of various provisions of Section 4 of the Act.
The Informant averred that other than Android and Google Search, Google’s core products include, a web browser (Google Chrome), an online video streaming service (YouTube), a web-based e-mail service (Gmail), an online mapping, navigation and geolocation service (Google Maps), an app store (Play Store), etc. These services are part of Google Mobile Services (GMS) i.e., the bundle of Google apps and services that Google licenses to smartphone manufacturers/ Original Equipment Manufacturers (OEMs. In addition to the core products of Google, on September 18, 2017, Google launched a Unified Payment Interface (“UPI”) based payment app called Tez in India, which was rebranded as Google Pay on August 28, 2018 in order to unify Google’s payment offerings globally under the ‘Google Pay’ brand.
The Informant alleged that Google, through its control over the Play Store and Android Operating System (“OS”), is favouring Google Pay over other competing apps, to the disadvantage of both i.e. apps facilitating payment through UPI, as well as users.
The Informant alleged that Google is abusing its dominant position in the markets for licensable mobile OS for smart mobile devices and app stores for Android OS by:
Analysis by the CCI:
Relevant Market and Dominance of Google
The CCI while determining ‘relevant market’ referred to its order dated April 16, 2019 passed under Section 26(1) of the Act in case bearing no. 39 of 2018 where it had the occasion to consider the first two markets as delineated by the Informant and formed a prima facie view that “market for licensable smart mobile device operating systems in India” and the “market for app stores for android mobile operating systems” are appropriate and necessary markets for assessment of impugned conduct. The CCI observed that based on available data, it appears that Play Store is the dominant source of downloading apps on an Android smartphone. The Commission also formed a prima facie determination that Google is dominant in both of these markets. CCI was of the prima facie view that market for apps facilitating payment through UPI appears to be a distinct relevant market for the assessment of allegations in the present matter. The CCI noted that though the intended use of most of the digital payment methods might be the same, the features/ characteristics offered by UPI make it distinct from others which is sufficiently evidenced by the volume and/ or value of transactions completed through UPI based apps.
Allegations under Section 4:
Observations by CCI:
After making the above observations, the CCI was of the prima facie view that the opposite parties have contravened the provisions of Section 4 of the Act and directed the DG to cause an investigation under Section 26 of the Act.
Please find attached a copy of the order.
This update has been contributed by R. Sudhinder (Senior Partner) and Prerana Amitabh (Managing Associate).
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