- Across the world, big technology behemoths are known to monopolize far-reaching innovations, inventions, and developments through whatever means available to ensure the primacy sustains. There are any number of instances when some of the biggest names in the world have left no stone unturned in ensuring their brand name stays ahead of others. As you are aware, such business corporates are always on the move to acquire smaller entities who might potentially pose challenges to their hegemony. Why do you think the merger and acquisitions have scaled stratospheric proportions in the last two decades or so? Precisely because the conglomerates do not wish to cede ground to prospective competitors affecting their own sustainability.
PC:
- More often than not, fledgling companies lacking traction and resources tend to go with the flow by allowing mergers and acquisitions. The global community is quite aware of what some of the biggest tech companies like Google are up to on the matter even in advanced economies like the USA and other European and Western countries. Welcomingly, Indian authorities too are stepping in to address such monopolistic moves. Recently, India’s competition regulator CCI passed an order levying a provisional penalty of Rs. 1,337.7 crores on Google for abusing the dominant position of its Android mobile phone operating system. CCI also asked Google to implement a set of 10 remedial measures that will open up the mobile phone ecosystem.
- Indeed, it’s a milestone decision in curbing monopolistic behaviour in the digital economy, which is not only gaining fast currency around but also increasingly becoming indispensable in the changed world preferences. Mind you, its relevance comes from the scale of its impact in India and the global context too. Android has about 96% market share in India among mobile phones, which are the most popular access points to the internet. Looking back, the European Commission in 2018 find Google for using a similar business model that violated the region’s antitrust rules. The business model uses unique features of the digital economy such as the network effect to create economies of scope that lock consumers into complementary services.
PC: Dnyaneshwari Patil
- Yes, the abuse of market power comes through agreements that mobile phone makers sign with Google to pre-install its package of applications in a manner that discriminates against standalone application developers. Consequently, competing service providers are squeezed out. CCI’s remedial measures give Google 3 months to modify agreements and implement other changes to break the company’s stranglehold on the market through the pre-installation route. CCI’s order against Google was preceded by a long investigation into its market practices. Thus, not only does this order represent an important precedent in preventing market abuse in India’s burgeoning digital economy, the work underlying it helps build the regulator’s capabilities. Play by rule!
