Earnings up by Rs 64 bn a year
Monopoly helps Google India
By Shivaji Sarkar
Internet giants are having fortunes in India for weak anti-trust or monopoly laws. Google alone repatriates Rs 64 billion or $79 lakh in 2021. In contrast Microsoft earned Rs 9475 crore. The Competition Commission of India (CCI) found Google has a monopolistic anti-competitive policy edging out others in competition and slapped Rs 2274.2 crore penalties in two separate cases. It moved the Supreme Court, which refused stay on one penalty payment of Rs 1337.76 crore for abusing tech giant’s dominant position in the Android system and Play Store policies. This has raised a glimmer of hope against checking the malpractices of internet giants.
The watchdog CCI’s order issued in October 2022, is indication of how the country is being bled by tech giants of billions or more every year. It calls for a massive overhaul of the competition, monopolistic, restrictive trade practices and related laws. India as it liberalised replaced the MRTPC Act 1969 with Competition Act 2002 and implemented it in September 2009.
Additional Solicitor General N Venkatraman and senior advocate Mukul Rohatgi, who appeared for a private company, OS Labs Technology, told the court that Google was discriminating against a “third world country” like India. The CCI’s landmark order swoops down on the internet giant for virtually preventing a competitive atmosphere or having monopolies for earning higher profits.
The European Commission in 2020 told Google to pay Euro 8 billion for anti-trust breaches in three cases. In yet another case, the EC found that Google’s favouring of Google Shopping had a negative impact on consumers and innovation. The Google has faced many such cases against it, including from the Microsoft since 2009.India is learning from the EC rulings. The US Justice Department’s lawsuit, filed by the Trump administration, alleged that Google violated anti-trust law in how it maintained dominance in search engines and advertising.
The CCI order is only indicative of the losses that the internet giant’s activities caused to the Indian users of the search engines. The practitioners find that it denies them access to another system and even discriminates against various other players like Yahoo or other non-Google mailing systems even prevents joining various conference applications or registrations.
This apart, each of its applications demanding access to critical personal contact and other details breach privacy, personal safety and is hazardous. The apprehensions are that such prospected data boosts profits and incurs heavy losses to each user.
Even otherwise the Telecommunication Department can act to prevent the irrational and illegal demands of the apps to access personal contacts, photographs and sensitive documents. The CCI, in its October 20 press release says that it examined various practices of Google licensing of Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.).
The CCI found that Google contravened provision of the Competition Act and perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Sec 4 (2)(c) of the act preventing abuse of dominant position.
In real application this gives a company an advantage and prevents benefits that could have accrued to other players. The CCI order is a pointer to the need of stricter implementation of the law to safeguard the interests of the users. It wants Google to follow the same set of compliance in Indian market as directed by European Commission (EC) in July 18 on a finding of dominance by Google in the Android ecosystem.
The company has faced many complaints in the EC, including Microsoft-backed PR firm, Infederation (Foundem) since 2009. Since 2010, the European Union has investigated several antitrust complaints against Google alleging abuses of its dominant position in breach of the EU’s competition laws – relating to Google shopping, the Android operating system and to Google AdSense.
The apps, according to an online Google answer, can rake in billions of dollars each year though it claims that “majority of apps don’t make any sort of money at all”.Each year Google earns Rs 64 billion from India. In 2018, it had the highest earnings of Rs 94 billion. In worldwide operations, Google in 2016 earned $ 19 billion – $ 602 per second, or about $ 3600 a minute. In 2021, it earned $ 76 billion. The EC actions are to check aggressive and non-competitive practices that may be paying it large dividends.
Each time Google faces such cases it seeks time for implementation of orders. It has done it in Europe and the US as well. Its lawyer Abhishek Manu Singhvi sought 45 days from the Supreme Court to comply with its orders and to provide a choice screen for customers to allow customers default search engine. He said it needed four months citing that even in Europe the company was given nine months to implement it.
It means that despite the CCI order and stay refusal by the SC, the customers would have to wait. The choice-based search-engine system is not foolproof as it would be offered only once at the time initial device set up, as per Singhvi’s submission to the court. The customer apparently having chosen it once cannot change it in future. This would be a severe restriction.
So, the Indian consumers in reality would not have a choice. Singhvi’s offer is a devious method of denial. This calls for a revamp of the competition, IT and other laws for ensuring level playing field and safeguards. The access to phone information like income tax personal account number can wreak havoc with any person’s finances.
The companies are also using the so-called updates to play with a person’s personal computer functioning. The ways to prevent such misuse of the system has to be incorporated in the laws. Since computer applications are being extended to various kinds of machines and even cars, the violations by companies are becoming hazardous. Tesla is known to misuse to the extent of locking the car systems, it has sold to anyone. It unlocks the system after a heavy “user fee” extortion.
This interference is against the basics of any proprietary law. The misuses of the information technology are wider than can be anticipated. India must enact new anti-trust laws to ensure safer search-engine internet uses and related computer safety. —INFA
(The writer is former senior editor, The Financial Express and Professor, Indian Institute of Mass Communication.)