Google has said it is opposed to ex-ante regulations in India, except in certain conditions, in its submission to the Committee on Digital Competition Law (CDCL). It said that ex-ante rules are untested and could harm innovation, but if such regulations were introduced, they should narrowly target specific firms and specific activities based on clear criteria. Google’s feedback was made public in the report released by the CDCL on the matter of ex-ante regulation in India, modelled after the Digital Markets Act (DMA), the EU’s new competition law. The Committee has also released the draft Digital Competition Bill, 2024. 

The draft bill prohibits large digital platforms, identified as Systemically Significant Digital Enterprises, from engaging in self-preferencing, restricting third-party apps, imposing anti-steering policies, misusing the data of business users, and bundling products and services. The draft is open for public feedback until April 15. 

Ex-ante regulations aim to prevent anti-competitive conduct from occurring, as opposed to the current ex-post framework under the Competition Act, 2002, wherein the Competition Commission of India (CCI) intervenes after the occurrence of anti-competitive conduct.

What did Google say in its submission?

• Most regulatory approaches untested: Google’s submission stated that there was no global consensus on a regulatory framework for digital markets and that a majority remained untested. It also noted that the ex-ante regimes that do exist have rigid rules adversely impacting product innovation and benefits to consumers. 
• Consult stakeholders for changes: Google’s submission also urged that any changes that were to be made to competition regulations in India must be made in consultation with stakeholders.
• Roll out changes in phases:  Google also calls for any changes to be rolled out in a phased manner to avoid regulatory overlaps.
• Suggestions for designation of Systemically Important Digital Intermediary (SIDI): Google, however, does not disagree with the designation of firms as Systemically Important Digital Intermediaries (SIDIs), giving suggestions for such designation. According to Google, SIDIs should be labelled based on identified activities in specific markets and on clear criteria. They should also be business-model agnostic. Additionally, these labels must be reviewed periodically.
• Separation of duties: Google has called for a clear separation between bodies like those in charge of designating SIDIs and bodies in charge of enforcement, etc.
• Allow for evidence-based justification of conduct under scrutiny: Any regulation should allow evidence-based justifications (e.g. pro-competitive) for conduct under scrutiny.

Google’s troubles with the CCI in India

Google’s various products like Android, Play Store, News, and Android TV are under regulatory scrutiny in India.   

The Competition Commission of India (CCI) has already issued two antitrust orders in October 2022 directing major changes to Android and Play Store and levying fines amounting to ₹1338 crore ($162 million) and ₹936 crores (US$ 113 million) on Google for anti-competitive conduct with respect to these two services. 

• CCI Android antitrust order: The CCI called Android anti-competitive in the 2022 order for mandatorily installing Google apps and disincentivizing Android forks. Additionally, Google was accused of abusing its dominance in the search market. Thus, in its order the CCI directed that Google cannot force pre-installation of Google apps, must allow users to change defaults during device set-up, should not disincentivise Android forks, should not get into exclusivity agreements for its search services, not place any restrictions on app downloads from outside Play Store, and more. Google is currently appealing against the decision. 
• CCI Play Store antirust order: The 2022 order on the Google Play Store concluded that the mandatory use of Google Play’s Billing System (GPBS) allowed Google to maintain its dominance over the app store market. It noted that the imposition of GPBS curbs innovation by denying market access to payment aggregators as well as app developers. Further, it noted that GPBS did not apply to Google’s own apps like YouTube. Thus, they mandated that app developers must be allowed to use third-party billing systems and redirect users to external services, unhindered. Further, Google was warned against using consumer data to its own advantage. Google proceeded to roll out the changes in its billing policy in 2023 allowing the use of alternative billing systems, but developers have complained to CCI that there are lots of restrictions and excessive fees imposed by Google. The Commission is examining whether Google is complying with its 2022 antitrust order.
• CCI’s latest probe into Play Store: In March 2024, a new separate investigation was ordered by the CCI to look into Google Play’s new billing policy based on complaints received from app developers and media industry bodies. According to the new billing system, app developers must pay GBPS commission if the user chooses GPBS or pay a commission reduced by 4 percent if the user chooses alternative billing. The CCI accused Google of charging app developers, disproportionately, what is 4 to 5 times its maintenance cost. It also noted that app developers paid a significant portion of their revenue to Google for advertising. Further, it called Google’s policy of only levying service fees on specific apps, arbitrary and unreasonable. The investigation is ongoing.  

Antitrust probes into Google in the US

Google has been hit with lawsuits in the US for various anti-competitive practices by its services.

 Google Play Store: In 2023, Google reached a  $700 million settlement with fifty US states to resolve an antitrust lawsuit based on practices in the Google Play store. In addition to this, the courts ruled that Google would be required to make changes to the Play Store to foster competition. These broadly cover:

•   Allowing installation of third-party apps and app stores
•   Ending exclusivity of Google apps and services on devices
•   Make the process of Sideloading to install apps
•   Stop the use of anti-steering mechanisms for accessing external services
•   Introducing User Choice Billing- an alternative in-app billing system

However, these changes only need to be made for a specific period of time, which has been criticized by app developers. 

 In the same year, Epic Games won a long-running battle against Google with its antitrust lawsuit alleging that Google maintained an illegal monopoly in the Android app distribution market and the Android in-app billing services market. However, the ruling has not made clear what changes we can expect in Google Play. These details are expected to emerge this year. 

 Epic Games, particularly, CEO Tim Sweeney, has been critical of Google’s app store, publishing a blog post criticising the User Choice Billing mandated by Google’s settlement with the US Government.

 Google Search: In 2020, the US Department of Justice, along with several state Attorneys General filed an antitrust lawsuit against Google for practices in Search, alleging that Google maintains a monopoly over search and search advertising. Some of alleged these practices involve:

• Forced pre-installation of Google Search
• Exclusivity agreements with device manufacturers and browsers
• Deal with Apple to make Google the default general search engine on the Safari browser
• Revenue-sharing agreements with device manufacturers for preferential treatment to its search engine

A verdict is expected in 2024. You can find MediaNama’s detailed coverage of the court hearings on this lawsuit in our two-part series.

 Google Ad tech: In 2023, the US Department of Justice, along with the Attorneys General of 17 US states, filed an antitrust lawsuit against Google for its anticompetitive practices in the digital advertising (ad tech) market. The ongoing lawsuit points out that Google owns all the tools for digital advertising in Media. Thus, Google was accused of controlling every aspect of digital advertising and inhibiting competition by:

•   Acquiring competitors in advertising
•   Forcing its acquired competitors to adopt Google’s tools
•   Bidding on ad inventory on its own exchange and impeding competition

Google has denied wrongdoing and defended its position in a blog post. The jury trial for this lawsuit is set to begin in September 2024. 

Google’s changes in the EU

In 2017 Google was fined  $2.6 billion by the European Commission for its anti-competitive practices in the Search markets, like in the US, specifically for favoring its own shopping services. In 2023, Google filed an appeal to the EC to overturn the antitrust fine, after being dismissed by a lower court in 2021.

However, under the Digital Markets Act, 2023, Google was required to make various changes in the EU. In particular, Google Search will give more prominence to comparison sites across the web. Further, users will be given the choice to select browsers other than Google’s on their devices. Users can also decide which Google services share their data with each other. “While we support many of the DMA’s ambitions around consumer choice and interoperability, the new rules involve difficult trade-offs, and we’re concerned that some of these rules will reduce the choices available to people and businesses in Europe,” Google stated in its blog.

Also Read

• Summary: India’s Draft Digital Competition Bill, 2024
• Apple Opposes Ex-Ante Regulations, Similar To Digital Markets Act, In India
• Why IAMAI’s Submission Oppossing Ex-Ante Rules In India Is Surprising

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