Govt steps in to ensure investment into India does not falter

Sensing that Big Tech firms will slow down their India investment plans in the light of the recent heavy penalty levied on Google by the Competition Commission of India (CCI) for its monopolistic business practices, the government has decided to step in.

Sources said that the government’s approach is to come out with a light touch regulation for firms like Apple, Google and others, which evenly balances innovation and fair play. Accordingly, it has been decided that Google and Apple would not be forced to open their operating system and app store – Android and IoS – to all domestic players who would be free to install/uninstall apps of their choice.

Instead, the regulatory guidelines under works would ask these firms to mandatorily give valid and justifiable reasons for not onboarding apps on their platforms. Currently, these firms are not bound by any law which mandates them to provide such disclosures.

The development comes after Google reportedly conveyed to the government that its plans of shifting a part of its manufacturing of Pixel phones to India from China will have to be put on hold till the entire judicial process arising out of the CCI’s order, putting restrictions on its Android ecosystem, is through.

Google took the stance because the Pixel phones are manufactured for export as well as domestic market and needs to be of standard format. Therefore, it’s not possible for it to manufacture one set of phones for the domestic market and another for export market, which it will have to do as per CCI’s order.

Google was planning to manufacture between 500,000 and 1 million units of the Pixel smartphone in India, which would have accounted for 10-20% of its annual production. Manufacturing in India would have also helped the company improve the sales of Pixel smartphones in the country.

Government sources said that the proposed regulation would ensure that relevant disclosures are made by firms like Google and Apple which would promote openness and transparency. “Google and Apple have made innovation and investments in their platforms, so it’s not fair to ask them to onboard all apps by domestic players, but by asking them to provide valid reasons for saying yes to some and no to others, there would be a perfect balance between promoting innovation and ensuring there’s fairplay in business practices,” sources said. “Why can’t they give choice to consumers (to decide which app they want to use). They have to change. They cannot take the citizens of India for granted, they have to offer wherever there is choice and have to be very clear when they are declining to onboard people onto their ecosystem,” sources added.

Through its recent order, the CCI has imposed a total penalty of `2,274 crore on Google for abusing its dominant position in the Android smartphone operating system and Android mobile app store. In its order, CCI said that Google manages the Android OS as well as other licences, which gives it an edge over competitors to pre-install most prominent search entry points such as search apps, widget and Chrome browser on Android devices. The CCI also asked the company not to restrict other app stores on its Play Store and also allow sideloading, without issuing any warnings to users.

Sideloading is the installation of apps having an open source versions, on a smartphone without using the app’s official distribution channel (ie, an app store). Currently, Google tries to prevent sideloading through a multi-step process and issuing security warnings that require users to make changes to the device’s default settings and manually grant various permissions. CCI is also conducting an investigation on Apple related to its app store policies similar to Google.

As earlier reported by FE, Google plans to challenge the CCI order in the National Company Law Appellate Tribunal. However, sources said that the regulations would be prospective in nature and would in no way interfere with the judicial process arising out of the CCI’s order. Financial Express