GIST OF SANSAD TV : The Big Tech Monopoly

Download PDF

Introduction

• The Competition Commission of India (CCI) has imposed a penalty of Rs.1,337.76 crore on ‘Google’ for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing cease and desist order.
• The CCI also directed Google to modify its conduct within a defined timeline.
• Smart mobile devices need an operating system (OS) to run applications (apps) and programs. Android is one such mobile operating systems which was acquired by Google in 2005.
• The CCI in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.).
  
  
  
• For this purpose, the CCI delineated following five relevant markets in the present matter:
  1. Market for licensable OS for smart mobile devices in India
  2. Market for app store for Android smart mobile OS in India
  3. Market for general web search services in India
  4. Market for non-OS specific mobile web browsers in India
  5. Market for online video hosting platform (OVHP) in India

Excerpts from the debate

Why is Google facing allegations by CCI?

• Google exploited the dependency of the members on the search engines offered by Google in order to prioritise their Web links and referral-traffic to build services such as Google news, Google Discover Google Accelerated Mobile Pages (AMP).
• Google in order to prioritise their web links in the search engine result page of Google, it forces the news agencies.
• The government argues that Google has abused its monopoly power through agreements with other companies that promote Google's apps and place its “search access points” as a default on browsers, phones and other devices. All of this drives more searches of Google at the expense of its rivals.
• Google controls about 90% of global web searches, but it holds a smaller share of the overall digital advertising market.

CCI’s Allegations:

Based on its assessment, the CCI found Google to be dominant in all the above-mentioned relevant markets.

• Signing the monopolised agreements: Google operates/ manages the Android OS as well as licences its other proprietary applications and OEMs use this OS & Google’s apps in their smart mobile devices.
  • Accordingly, they enter into multiple agreements to govern their rights and obligations viz. Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA),
• Overtaking search entry points to establish online monopoly: MADA assured that the most prominent search entry points i.e., search app, widget and chrome browser are pre-installed on Android devices, which accorded significant competitive edge to Google’s search services over its competitors.
• Does not stick to a healthy Competition: Further, Google also secured significant competitive edge over its competitors, in relation to its revenue earning app i.e. YouTube in the Android devices. The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA. Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets.

Conclusion

Accordingly, in terms of the provisions of Section 27 of the IT Act, the CCI has imposed monetary penalty as well as issued cease and desist order against Google from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act.

Value addition:

Tech giants’ controversial incidences in India:

• Facebook (Instagram) in 2020, failed to take any action on the controversy called Bois Locker Room(mostly led by Indian teenagers).
  
  
• Facebook employees themselves are questioning the Facebook India team's content regulation practices and procedures.
• CCI (Competition Commission of India) opened two antitrust investigations against Google in 2020.
  • One due to the unfair promotion of its own payment application (Google Pay).
  • The other for engaging in anti-competitive practices by restricting companies from creating modified versions of the Android operating system for smart TVs.
• In 2019, the Enforcement Directorate (E.D.) launched an investigation into alleged violations by Amazon and Flipkartfor their ban on foreign direct investment in business-to-consumer (B2C) businesses, except where specific conditions are met.
• Twitter displayed a map of Leh as part of China and later as part of the state of Jammu and Kashmir (rather than a separate Union Territory). Twitter was served with a legal notice for this.

How Tech giants create impact on India?

• Use of a targeting algorithm
• Lack of transparency and privacy concerns:
• Monopolistic business practices:
• Big tech is the main medium for fake news, hate speech, etc. Countries considered these to be undemocratic activities.
• Influence on the legislative actions

How big techs are regulated in India?

• • The government passed the Competition Act, 2002. The Act established the Competition Commission of India (CCI). The law was later amended in 2007. The CCI was established to eliminate practices that have an adverse effect on competition. The Commission also promotes and maintains competition, protects the interests of consumers. CCI will intervene if any of the tech giants engage in anti-competitive practices.
    • For example, in 2018 the CCI closed an investigation into Google's advertising policies. The CCI said that Google abused its dominant position and engaged in anti-competitive practices. The CCI also imposed a fine of Rs.136 crore on Google.
  • Second, the Information Technology Act, 2000regulates all activities related to the use of computer resources in India. Some of the important provisions of the Act are
    • Section 69of the Act gives the government the power to issue directions to "intercept, decipher or monitor any information generated, transmitted, received or stored" in any digital device.
    • Section 69Aof the Act gives the government the power to block access to any information generated, transmitted, received or stored or hosted in the digital space.
    • Intermediaries (providers of network services, telecommunications services, Internet services and web hosting) are required to store and maintain the specified information. They also have to obey the instructions issued by the government from time to time.
    • In return, intermediaries are protected from legal action for user-generated content (big techs have used this clause to waive responsibility and liability in the digital space).