Google (GOOGL.O) announced on Friday that it will work with India’s competition watchdog after the Supreme Court upheld strict antitrust rules requiring the American company to alter how it promotes its well-liked Android platform in a significant emerging market.
In October, the Competition Commission of India (CCI) ruled that Alphabet Inc.’s (GOOGL.O) Google had abused its dominance in the Android market and ordered it to lift all restrictions on device manufacturers, including those relating to pre-installing apps and guaranteeing the exclusivity of its search. Google was also hit with a $161 million penalty.
Given that India’s judgment is perceived as taking more drastic measures than those imposed by the European Commission in its historic 2018 verdict against Android, Google has been concerned about it. According to estimates from Counterpoint Research, Android powers around 97% of the 600 million smartphones in India and 75% of the 550 million smartphones in Europe.
Google was given seven days to comply with the CCI guidelines after losing a case in India’s Supreme Court on Thursday. As a result, the corporation will have to alter the way it negotiates contracts with device manufacturers who use its open-source, free Android platform.
A Google representative told TradingTwist that the company “remains dedicated to our users and partners and will cooperate with the CCI on the road forward,” without going into detail about the potential actions.
We are studying the specifics of yesterday’s ruling, which only addressed temporary relief and did not address the merits of our appeal, the statement continued.
The top court in India further stated that a lower tribunal, where Google’s first objected to the Android rules, can continue to hear the company’s case and must issue a decision by March 31. On Friday, Google announced that it would continue the appeal “in parallel.”
In an effort to stop the CCI directions from being put into effect, Google warned the Supreme Court that the expansion of its Android ecosystem would halt. If the guidelines take effect, it claimed it will be obliged to change agreements with more than 1,100 device manufacturers and thousands of app developers.
According to Google’s filing with the Indian Supreme Court, “no other jurisdiction has ever requested such extensive adjustments.”
According to Neil Shah, research director at Counterpoint Research, the Indian guidelines “will establish precedent on how far Google is obliged to open up the Android platform to third party local app stores, apps, and services.”
It will be difficult, he remarked. “This will be a big shock, causing uncertainty and turmoil. We’re talking about around 600 million Android users here.”
Google was fined in Europe for placing restrictions on Android mobile device manufacturers that the Commission found to be unlawful. The case’s record $4.3 billion fine is currently being contested by Google.
Google said that device manufacturers will be able to license the Google mobile application suite independently of the Google Search App or the Chrome browser in addition to letting Android device users select their default search engine.
The CCI’s requirement that smartphone manufacturers pick and choose which apps to preload, according to Google’s testimony before the Supreme Court, would “prevent Google from ensuring pre-installation of its revenue-generating apps and, correspondingly, (would) require Google to levy a licensing fee.”
The corporation issued a warning that this could increase the price of mobile handsets as manufacturers’ input prices grow.