NCLAT verdict on Google: A jolt for app developers – The Financial Express

The Financial Express
App developers like Indus OS, Epic Games and MapmyIndia, which were leading the fight against Google’s alleged anti-competitive policies, will be in for a big disappointment with the National Company Law Appellate Tribunal’s (NCLAT’s) order setting aside four key directions of the Competition Commission of India (CCI), experts said.
Interestingly, the order is in favour of the device makers with regard to licensing arrangement, but since they had never complained to any regulatory body, their victory is superfluous in nature.
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App developers stand to lose with the NCLAT order setting aside CCI’s direction that allowed side-loading of apps and making it clear that Google does not need to uninstall its own apps from the phones. Further, Google can continue to impose restrictions on developers of app stores to distribute their app stores through Play Store and can deny access to its Play Services APIs.
Experts consider the judgment as a partial win for Google even though the NCLAT has upheld the fine amount of Rs 1,338 crore on the US giant. “It is a partial relief for Google as the order by NCLAT, which does not mandate Google to allow side-loading, is positive given there might be security issues with other apps,” said Tarun Pathak, research director at Counterpoint.
According to Pathak, not much will change with regard to Google’s licensing arrangements with handset makers apart from some tweaks based on MADA (mobile application distribution agreement). The order will affect the apps in competition with it, he added.
During the proceedings of the case, MapmyIndia argued that Google’s policy ensured that its mapping service app Mappls exit the business-to-consumer (B2C) market. According to the company, it had arrangements with handset makers to allow its own apps. However, with the dominance of Android phones, Google Maps took over the game and did not let it grow.
“Google is like the owner of a mall that has tie-ups with various products. The company says if you want to sell shoes, you will sell only the brand it approves. If you want to sell something else, it will be difficult to survive,” said senior counsel Rajshekar Rao, who represented Indus OS during the proceedings.
Indus OS has 400,000 apps in regional languages on its app store, but is restricted to devices such as Samsung as Google does not allow it in its Play Store.
Despite the current tweaks, which Google will have to do with smartphone makers in compliance with other directions of NCLAT, experts believe that these smartphone makers are not going to leave Google apps given their fear of losing market share to competitors if they provide any other pre-installed apps on the phone which are not preferred by large sections of the consumers.
Other directions will prompt Google to allow users to choose their default search engine on Android-based smartphones, giving device makers the liberty to license individual Google apps for pre-installation on their devices, option for alternative billing system and allowing partners to build forked operating system based on Android.
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“This decision may not necessarily favour Google as key changes on commercial agreements, the combined offering of apps and placement of apps have to be made. Also, we will have to consider the total penalty that has now been imposed against the company over the years,” said Saksham Malik, programme manager, Competition Law and Policy at The Dialogue.
According to Malik, the impact on competition in a few aspects will only be known once the investigation against Apple is completed. The CCI’s decision post the said investigation will also have implications for app store markets and operating systems, and the same remains to be seen.
Currently, India has about 600 million smartphone devices and out of that 97% run on Android, while the remaining 3% on iOS.
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