Umar Javeed Vs Google LLC (Competition Commission of India)
CCI imposes a monetary penalty of Rs. 1337.76 crore on Google for anti-competitive practices in relation to Android mobile devices
1. The Competition Commission of India (Commission) has imposed a penalty of Rs. 1337.76 crore on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing cease and desist order. The Commission also directed Google to modify its conduct within a defined timeline.
2. Smart mobile devices need an operating system (OS) to run applications (apps) and programs. Android is one such mobile operating systems which was acquired by Google in 2005. The Commission in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.).
3. For this purpose, the Commission delineated following five relevant markets in the present matter:
a. Market for licensable OS for smart mobile devices in India
b. Market for app store for Android smart mobile OS in India
c. Market for general web search services in India
d. Market for non-OS specific mobile web browsers in India
e. Market for online video hosting platform (OVHP) in India.
4. During the course of inquiry, Google argued about the competitive constraints being faced from Apple. In relation to understanding the extent of competition between Google’s Android ecosystem and Apple’s iOS ecosystem, the Commission noted the differences in the two business models which affect the underlying incentives of business decisions. Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on sale of high-end smart devices with state of the art software components. Whereas Google’s business was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue earning service i.e., online search which directly affects sale of online advertising services by Google.
5. Further, in relation to app stores, the Commission noted that the demand for the same, come from three different sets of consumers i.e., (a) Smart device OEMs who wish to install an app store to make their smart devices commercially viable and marketable; (b) app developers, who want to offer their services to the end users; and (c) end users to wish to access app stores to access content or avail other services. The Commission examined the substitutability between Google’s Play Store for Android OS and Apple’s App Sore for iOS from the perspective of all three demand constituents and found that there is that no substitutability between Google’s Play Store and Apple’s App Store. The Commission further noted that there might be some degree of competition between the two mobile ecosystems i.e., Android and Apple, however, that too is also limited at the time of deciding as to which device to buy. At that stage also, the Commission was of the considered view that the primary and the most significant factor in the mind of an end user is the hardware specification and the device price.
6. Based on its assessment, the Commission found Google to be dominant in all the above-mentioned relevant markets.
7. Google operates/ manages the Android OS as well as licences its other proprietary applications and OEMs use this OS & Google’s apps in their smart mobile devices. Accordingly, they enter into multiple agreements to govern their rights and obligations viz. Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA), etc.
8. MADA assured that the most prominent search entry points i.e., search app, widget and chrome browser are pre-installed on Android devices, which accorded significant competitive edge to Google’s search services over its competitors. Further, Google also secured significant competitive edge over its competitors, in relation to its another revenue earning app i.e. YouTube in the Android devices. The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA. Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets.
9. AFA/ ACC guaranteed that distribution channels for competing search services is altogether eliminated by prohibiting OEMs from offering devices based on Android forks. It ensured that OEMs are not able to develop and/ or offer devices based on forks, which are outside the control of Google. In the absence of these restrictions, the competing search services could have availed of sufficient distribution channels in partnership with OEMs, offering devices based on forks. Similarly, the android fork developers also could not find distribution channels for their fork OSs as almost all the OEMs were tied with Google.
10. Simultaneously, RSAs helped Google to secure exclusivity for its search services to the total exclusion of competitors. The combined results of these agreements guaranteed a continuous access to search queries of mobile users which helped not only in protecting the advertisement revenue but also to reap the network effects through continuous improvement of services, to the exclusion of competitors. With these agreements in place, the competitors never stood a chance to compete effectively with Google and ultimately these agreements resulted in foreclosing the market for them as well as eliminating choice for users.
11. The Commission opined that the markets should be allowed to compete on merits and the onus is on the dominant players (in the present case, Google) that its conduct does not impinge this competition on merits. By virtue of the agreements discussed above, Google ensured that users continue to use its search services on mobile devices which facilitated un-interrupted growth of advertisement revenue for Google. Further, it also helped Google to further invest and improve its services to the exclusion of others. Thus, the underlying objective of Google in imposing various restrictions via MADA, AFA/ ACC and RSAs was to protect and strengthen its dominant position in general search services and thus, its revenues via search advertisements.
12. The Commission concluded that,
12.1. mandatory pre-installation of entire Google Mobile Suite (GMS) under MADA (with no option to un-install the same) and their prominent placement amounts to imposition of unfair condition on the device manufacturers and thereby in contravention of the provisions of Section 4(2)(a)(i) of the Act. These obligations are also found to be in the nature of supplementary obligations imposed by Google on OEMs and thus, in contravention of Section 4(2)(d) of the Act.
12.2. Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Section 4(2)(c) of the Act.
12.3. Google has leveraged its dominant position in the app store market for Android OS to protect its position in online general search in contravention of Section 4(2)(e) of the Act.
12.4. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in non-OS specific web browser market through Google Chrome App and thereby contravened the provisions of Section 4(2)(e) of the Act.
12.5. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in OVHPs market through YouTube and thereby contravened provisions of Section 4(2)(e) of the Act.
12.6. Google, by making pre-installation of Google’s proprietary apps (particularly Google Play Store) conditional upon signing of AFA/ ACC for all android devices manufactured/ distributed/ marketed by device manufacturers, has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android i.e., Android forks and thereby limited technical or scientific development to the prejudice of the consumers, in violation of the provisions of Section 4(2)(b)(ii) of the Act.
13. Accordingly, in terms of the provisions of Section 27 of the Act, the Commission has imposed monetary penalty as well as issued cease and desist order against Google from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act. Some of the measures that were indicated by the Commission are as follows:
i. OEMs shall not be restrained from (a) choosing from amongst Google’s proprietary applications to be pre-installed and should not be forced to pre-install a bouquet of applications, and (b) deciding the placement of pre-installed apps, on their smart devices.
ii. Licensing of Play Store (including Google Play Services) to OEMs shall not be linked with the requirement of pre-installing Google search services, Chrome browser, YouTube, Google Maps, Gmail or any other application of Google.
iii. Google shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors. This would ensure interoperability of apps between Android OS which complies with compatibility requirements of Google and Android Forks. By virtue of this remedy, the app developers would be able to port their apps easily onto Android forks.
iv. Google shall not offer any monetary/ other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services.
v. Google shall not impose anti-fragmentation obligations on OEMs, as presently being done under AFA/ ACC. For devices that do not have Google’s proprietary applications pre-installed, OEMs should be permitted to manufacture/ develop Android forks based smart devices for themselves.
vi. Google shall not incentivise or otherwise obligate OEMs for not selling smart devices based on Android forks.
vii. Google shall not restrict un-installing of its pre-installed apps by the users.
viii. Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points. Users should have the flexibility to easily set as well as easily change the default settings in their devices, in minimum steps possible.
ix. Google shall allow the developers of app stores to distribute their app stores through Play Store.
x. Google shall not restrict the ability of app developers, in any manner, to distribute their apps through side-loading.
14. In relation to computation of penalty, the Commission noted that there were glaring inconsistencies and wide disclaimers in presenting various revenue data points by Google. However, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission quantified the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the Commission imposed a penalty of Rs. 1337.76 crore upon Google on provisional basis, for violating Section 4 of the Act. Google has been given a time of 30 days to provide the requisite financial details and supporting documents.
15. The public version of the order shall be uploaded on the website of the Commission tomorrow.
FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA
1. The present Information has been filed by Mr. Umar Javeed, Ms. Sukarma Thapar and Mr. Aaqib Javeed (the, ‘Informants’) under Section 19(1)(a) of the Competition Act, 2002 (the, ‘Act’) against Google LLC and Google India Private Limited (collectively, ‘Opposite Parties’/ ‘Google’), alleging inter alia abuse of dominant position by Google in the mobile operating system related markets in contravention of the provisions of Section 4 of the Act. The Informants are stated to be consumers of the Android based smartphones.
About the OPs
2. Google LLC, formerly Google Inc., is stated to be a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc. (Alphabet), a holding company. Google provides a variety of information technology related services, with a principal focus on search, advertising, operating systems, platforms, and enterprise. Google offers an internet search service. Google’s search service is available on websites (such as www.google.com), through partner sites that include Google search technology, and as an application/ app. Google provides advertising solutions to help businesses market and advertise their products. Google’s core business activities concern Chrome, Gmail, Google Drive, Google Maps, Android, Google Play, Search, and YouTube.
3. Further, Google India Private Limited (‘Google India’) is an indirect subsidiary of Google LLC (and an indirect wholly owned subsidiary of Alphabet Inc.). Since 01.04.2016, Google India has been stated to be a non-executive reseller of online advertising space in India, appointed by Google Asia Pacific Pte. Ltd., Singapore (prior to that time it was the non-exclusive reseller of online advertising space appointed by Google Ireland Limited). In its capacity as a reseller, Google India undertakes marketing and promotion activities for certain Google products that are monetized using Google advertisements. In addition, it also provides a limited set of Information Technology Services (‘IT services’) and Information Technology Enabled Services (‘ITES’) to other group companies.
Facts as stated in the Information
4. The Informants stated that Android is an open-source mobile OS i.e., it can be freely used and developed by anyone. Android Open Source Project (AOSP) is the fundamental Android source code subject to a basic license. The majority of smartphones and tablet manufacturers in India were stated to use the Android operating system in combination with a range of Google’s proprietary applications and services i.e., the Google Mobile Services (GMS).
5. The Informants further averred that GMS is a collection of Google applications and Application Programme Interface (APIs) that help support functionality across devices. As per the Informants, GMS includes wide range of Google apps such as Google Maps, Gmail, and YouTube which are available only through GMS and cannot be downloaded separately by device manufacturers. In order to obtain the right to install these applications and services on their Android devices, manufacturers need to enter into certain agreements with Google. The Informants also alleged that end-users cannot avail such services directly.
6. The Informants further stated that depending upon which “Android” device OEMs/ device manufacturers want to offer, they have to sign one or more agreements i.e., (a) Android without GMS: If an OEM wants to manufacture a ‘bare” Android device, it needs to only pass technical tests and accept the Android License Agreement but in bare Android devices, OEMs are not permitted to include any of the GMS such as Google Maps, Gmail and YouTube, and (b) Android with GMS: In order to obtain GMS, an OEM has to enter into two additional agreements with Google (i) Mobile Application Distribution Agreement (“MADA”) and (ii) Anti Fragmentation Agreement (“AFA”).
7. The Informant also delineated four distinct relevant markets i.e., (i) Licensable Smart Mobile OS; (ii) App Stores for Android Mobile OS; (iii) Online Video Hosting Platform (‘OVHP’); and (iv) Online General Web Search Service. It was also stated that since conditions of competition are homogeneous across India, ‘India’ would be the relevant geographic market.
8. Adverting to the abusive conduct, the Informants have alleged that Google engaged in different kinds of anti-competitive practices, either in the market in which they are dominant or in separate markets, with the aim of cementing Google’s dominant position in Online General Web Search Services and Online Video Hosting Platform (through YouTube). In this regard, the Informants essentially made the following allegations:
i. Google mandates smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services in order to get any part of GMS in smartphones manufactured in/ sold in/ exported to/ marketed in India. Such conduct was claimed to have hindered the development and market access of rival mobile applications or services thereby violating Section 4 read with Section 32 of the Act.
ii. Google ties or bundles certain Google applications and services (Such as Google Chrome, YouTube, Google Search, etc.) distributed on Android devices in India with other Google applications, services and/ or Application Programming Interfaces (APIs) of Google. This conduct illegally prevented the development and market access of rival applications and services in violation of Section 4 read with Section 32 of the Act.
iii. Google prevents smartphone and tablet manufacturers in India from developing and marketing modified and potentially competing versions of Android (so-called “Android forks”) on other devices. This conduct restricted access to innovative smart mobile devices based on alternative, potentially superior versions of the Android operating system in contravention of Section 4 read with Section 32 of the Act.
Directions to the Director General (DG)
9. Based on the material available on record, the Commission, vide its order dated 16.04.2019, formed a prima facie view that Google has contravened various provisions of Section 4 of the Act. Accordingly, the Commission directed the DG to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act.
10. Accordingly, the DG submitted confidential version of the Investigation Report on 29.06.2021 and further non-confidential version of the Investigation Report on 29.09.2021. Subsequently, on 03.11.2021, the DG submitted revised non-confidential version of the Investigation Report, addressing certain issues highlighted by Google.
Investigation by the DG
11. The DG during its investigation has sought information/ replies from Google as well as various third parties in respect of various products and markets involved. These third parties inter alia include mobile handset manufacturers (both Indian & foreign brands) who install Android OS and Google apps & services in their handsets; third parties who are active in the Indian market relating to app stores for Android OS, online general web search service and web browser; key players in the online video hosting platform; key app developers in India, etc.
12. The Investigation has delineated five relevant markets for purpose of determination of issues at hand. These are market for licensable OS for smart mobile devices comprising of Smartphones & Tablets in India, market for App Store for Android smart mobile OS in India, market for General web search services in India, market for non-OS specific web browsers in India and market for online video hosting platform (OVHP) in India. The DG also found Google to be dominant in the above-mentioned relevant markets. Further, keeping in view the other apps & services which are part of core apps as per MADA, the DG also identified certain other associated relevant markets in the Investigation Report.
13. After examining the alleged conduct of Google, the DG has concluded that:
13.1. preinstallation of entire GMS suite under MADA amounts to imposition of unfair condition on the device manufacturers and thereby infract provisions of Section 4(2)(a)(i) and Section 4(2)(d) of the Act;
13.2. Google by making preinstallation of Google’s proprietary apps (particularly Google Play Store) conditional upon signing of AFA/ ACC for all Android devices manufactured/ distributed/ marketed by device manufacturers, has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android, i.e., Android forks, and thereby limited technical or scientific development to the prejudice of the consumers, in violation of the provisions of Section 4(2)(b)(ii) of the Act.
13.3. Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Section 4(2)(c) of the Act.
13.4. Google has leveraged its dominant position in Play Store to protect its dominant position in online general search in contravention of Section 4(2)(e) of the Act.
13.5. Google has abused its dominant position by tying up of Google Chrome App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act.
13.6. Google has abused its dominant position by tying up of YouTube App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act; and
13.7. In view of the Google’s Play store policies being one-sided, ambiguous, vague, biased, and arbitrary; unilateral decision to modify Developer Terms i.e. DPP and DDA by Google; suspension from the Play Store without any cogent reason; losses suffered by third parties app developers due to the arbitrary conduct on part of OPs etc., the DG concluded that Google’s behaviour, including the terms and conditions, amounts to the imposition of an unfair or discriminatory condition, limiting and restricting the technical and scientific development of apps to the prejudice of users, and in the denial of market access by Google in violation of Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act.
14. To sum up, Google was found to be contravening the provisions of Section 4(2)(a)(i); Section 4(2)(b); Section 4(2)(c); Section 4(2)(d) and Section 4(2)(e) of the Act, by the DG.
Consideration of the Investigation Report by the Commission
15. Having considered the Investigation Report in its meeting held on 06.10.2021, the Commission directed to forward an electronic copy of the non-confidential version of the Investigation Report to the parties, for filing their respective objections/ suggestions thereto, if any. Further, in this matter, the Commission had also set up of a Confidentiality Ring to grant full access to the confidential case records to Google. Accordingly, pursuant to the order of the Commission dated 06.10.2021, an electronic copy of the confidential version of the Investigation Report was also forwarded to Google through its one of the authorised representative(s) with the stipulation that the access thereto shall be limited only to the approved representatives of Google, as detailed in the said order.
16. The parties were also allowed to file their respective objections/ suggestions, if any, to the Investigation Report by 05.11.2021 along with a brief synopsis thereof, after mutually sharing copies thereof in advance under intimation to the Commission. The parties were also given liberty to file responses to each other’s objections/ suggestions, after mutual exchange in advance under intimation to the Commission. Thereafter, multiple extensions were granted for filing the respective objections/ suggestions. The respective objections/ suggestions of the parties have since been received and taken on record.
17. Further, the Commission, vide its order dated 17.06.2022, also directed that the parties may appear for a final hearing on the Investigation Report, on 04.08.2022 at 10:30 A.M through Video Conference (VC) mode. The parties were allowed to appear either in person or through their duly authorised representatives, within the meaning of Section 35 of the Act, on the date of hearing. Google was also given the liberty to make its submissions on the quantum of penalty which may be levied by the Commission in the event Google is to be held in contravention of the provisions of the Act, during the oral hearing as also in the written objections.
18. The learned senior counsel appearing on behalf of Google made brief arguments on the merits of the matter on 04.08.2022. Further, as prayed by the learned counsel, the Commission scheduled the next dates of oral hearing on 31.08.2022 and 01.09.2022. The learned senior counsel(s) appearing on behalf of Google made further submissions on 31.08.2022 and 01.09.2022. As the hearing could not be completed, the matter was adjourned to 02.09.2022 at 10:00 a.m. at the request of Google, for remainder arguments. The learned senior counsel appearing on behalf of Google, concluded the arguments on 02.09.2022. After conclusion of hearing, the Commission invited the learned senior counsel appearing on behalf of Google to make arguments on the quantum of penalty which may be levied by the Commission in the event Google is to be held in contravention of the provisions of the Act. The learned senior counsel sought leave of the Commission to make written submissions on this aspect. Accordingly, the Commission allowed Google to file written submissions on this aspect, as prayed for, and granted time of two weeks i.e., till 16.09.2022 to file the same. Further, Google was also allowed to file brief synopsis of its oral arguments, by 16.09.2022, if so desired. Having heard the learned senior counsel appearing on behalf of Google, the Commission further decided to pass an appropriate order in due course.
19. The submissions of Google in respect of penalty as well as brief synopsis of its oral arguments have since been received.
Replies/objections/suggestions by the Parties
Reply filed by the Informants
20. The Informants, vide a letter dated 22.02.2022, submitted that they do not having any objections/suggestions to the Investigation Report. Further, vide an email dated 28.06.2022, the Informants submitted that they do not have any further written or oral submissions pertaining to the Investigation Report.
Reply filed by Google
21. Google filed its response to the Investigation Report on 25.07.2022 and the same shall be referred to and dealt with while analysing the matter on merit.
Analysis and findings of the Commission
22. Before adverting to the matter on merits, the Commission notes that the allegation in the present matter primarily relates to the practices of Google w.r.t. licensing of Android mobile operating system and various proprietary mobile applications of Google. Therefore, it would be appropriate to elaborate the functioning of the Android OS ecosystem and Google’s activities in the same.
Android Operating System
23. Smart mobile devices need an operating system (OS) to run applications (apps) and programs. A mobile OS provides a mobile device with its underlying functionality, such as user interface, motion commands, button controls and facilitates the operation of the device’s features, such as the microphone, camera, and GPS. The mobile OS is the interface between the mobile device hardware, such as the smartphone handset or tablet and the applications that run on the device like e-mail or streaming apps. The mobile OS is pre-installed on mobile devices.
24. Android is one such mobile operating systems which was acquired by Google in 2005. Google released the first Android version inside Google and the Open Handset Alliance (‘OHA’) in 2007. This alliance was established by Google to garner support of other industry players i.e., OEMs, hardware manufacturers, mobile network operators, app developers, etc., to increase acceptance of Android. The first public version of Android was released in beginning of 2008.
25. Google has stated that it makes the source code of Android available for free via the Android Open-Source Project (‘AOSP’) and under an open-source licence known as ‘Apache licence’. The Apache License is stated to be a permissive free software license written by the Apache Software Foundation (ASF) which allows users to use the software for any purpose, to distribute it, to modify it, and to distribute modified versions of the software under the terms of the license, without concern for royalties. Thus, anybody can access the AOSP source code and create its modified version. However, development of the source code of the Android platform is mainly done by Google itself. Also, the governance model of Android is run by Google, which determines the roadmap, decides on features and new releases as also tightly controls the compatibility of derivatives.
26. It is further noted that since April 2011, Google has released several new major OS versions of the Android, with many more intermediate and minor versions updates. Each version of Android introduces new APIs, bug fixes and security fixes that bring new features. A user of old version of Android may be deprived of new Apps as new apps will require a more recent version of Android. OEMs also invest considerable resources for incorporating Android upgrades and new releases in their devices.
27. It is also noted that Google owns the intellectual property rights (IPR) to the Android OS. As per the branding guidelines the ‘Android’ name and the Android logo, are property of Google LLC and not part of the assets available through the Android Open-Source Project. Further, as per the guidelines, the use of the ‘Android’ trademark on hardware, packaging or marketing materials of device is restricted to Android-compatible devices only after signing Anti-Fragmentation Agreement (‘AFA’)/ Android Compatibility Commitment (‘ACC’).
28. Since, Google operates/ manages the Android OS as well as licences its other proprietary applications and OEMs use this OS and Google’s apps in their smart mobile devices, they enter into multiple agreements to govern their rights and obligations. Some of the important agreements entered into by Google with OEMs are as under:
A. Mobile Application Distribution Agreement (‘MADA’)
B. Anti-fragmentation Agreement (‘AFA’)
C. Android Compatibility Commitment Agreement (‘ACC’)
D. Revenue Sharing Agreement (‘RSA’)
E. Mobile Service Distribution/ Placement Bonus Agreement
29. The key features of these agreements are as follows:
Mobile Application Distribution Agreement (‘MADA’)
30. MADA grants licence to OEMs for free distribution of Google’s proprietary apps referred to as Google Mobile Services or GMS (viz. Google Play Store, Gmail, Google Maps, Google Search, Google Chrome, YouTube, Google Play Services, etc.) to the end users within the specified territories. Further, these apps of Google are offered in the form of a ‘bundle’, i.e., if the OEM wishes to install even one app out of the GMS, it has to pre-load the full suite of apps on the devices.
31. MADA also prescribes placement requirements of Google applications on the device’s panel/screen. As per MADA, Google search widget, Google Play client icon and a folder labelled ‘Google’ with Google icon containing mandatory apps have to be pre-loaded on the default home screen of the device. All other Google apps have to be placed not below the one level below the default home screen. Google has discretion to change the list of mandatory Google apps that must be pre-installed.
32. In addition, the earlier version of MADA (i.e., till 2014, as claimed by Google) also required Google Search to be set as a default search provider for all web search access points i.e., ‘assist’, ‘search’, ‘voice search’ and ‘Web Search’ between 2011 to 2017. This requirement was changed subsequently.
33. …………………
34. The licence under the MADA is also subject to the OEM being in compliance with a valid and effective Anti-fragmentation Agreement (AFA) / Android Compatibility Commitment (ACC). ……………….. The final software build on devices must pass the Compatibility Test Suite (‘CTS’) prior to launch. In addition, other devices manufactured by the OEMs, running on Android, ……………….. must also pass the CTS prior to company’s commercial distribution of such devices. The OEMs are prohibited from taking any actions and/ or allowing/ encouraging any third party to take any action that may cause or result in the fragmentation of Android.
35. …………………..
36. ……………….
37. MADA also prescribes that Google may terminate the MADA and stop licensing its apps, if the OEM breaches any obligation in the MADA relating to device compatibility. Such obligations include the obligation not to ‘take any actions that may cause or result in the fragmentation of Android’ and the obligation for all devices running Android including those on which a hardware manufacturer does not pre-install Google’s apps, to pass the CTS.
Anti-fragmentation Agreement (‘AFA’)
38. The Investigation has revealed that Google introduced AFAs in 2008-09 and the same was succeeded by ACC. Further, while ACC was signed in the year 2017, but there was an overlap in terms of period between the AFA and ACC, as both these agreements ran concurrently in case of majority of the OEMs.
39. The AFA places following obligations on an OEM:
………………….
40. ………………The OEMs are not permitted to manufacture/ develop hardware for themselves or for any third party which is not Android compatible. …………….
41. …….
42. In respect of India, the DG has stated that Google has entered into AFAs with almost all OEMs manufacturing /distributing Android smart mobile devices. The AFAs entered into with the aforesaid OEMs have been in operation for different periods from January 2011 onwards. The DG also identified the specific period during which the AFAs have been operational with different OEMs. It has also been stated that the term of AFA …………………. is normally which has been extended/renewed periodically.
43. According to Google, the AFA is aimed to ensure that Android does not become fragmented. The main objective of AFA purportedly is to define a base line implementation of Android which is compatible with the third-party apps written by app developers.
Android Compatibility Commitment Agreement (‘ACC’)
44. Google entered into ACCs with most of the OEMs from 2017 onwards, concomitantly with AFA. The terms and conditions of ACC were more or less similar to that of AFA with few exceptions. ACC specifically provides that: ……………….
45. Under the AFA! ACC, the OEMs are inter alia restrained from manufacturing, distributing, or marketing devices based on Android forks (i.e., modified versions of AOSP code of Android which do not meet the requirements of CDD and CTS). Google licenses its apps only to those OEMs who agree to requirements of AFA! ACC and whose devices meet the Android compatibility tests. Accordingly, Google’s applications or GMS (viz. Google Play Store, Gmail, Google Maps, Google Search, Google Chrome, YouTube, Google Play Services, etc.) are not available on Android fork devices.
46. There are some permitted exceptions under ACC, which are as follows:
……………….
47. In nutshell, ACC allows OEMs to manufacture devices or components for devices for a third-party device that are not Android Compatible Devices as long as such devices are marketed under a third-party brand and the OEM does not market such devices. ………..
Revenue Sharing Agreement (‘RSA’)
48. Google entered into RSA with prominent OEMs …………… The RSA inter-alia provides for exclusive pre-installation of Google Search and Google Assistant in ‘qualified device’ of OEMs. The agreement forbids the OEMs from preloading or otherwise installation of any third-party application, bookmark, product, service, icon, launcher, third party hot-word in the qualified device that is an alternative service to Google Search and Google Assistant. Google shared search advertising revenues with OEMs, provided that the OEMs did not pre-install any competing general search service on any device within the defined portfolio of smart devices. If an OEM pre-installs such a service on any device, it loses the revenue share payments not only for that particular device but also for all the other devices in its portfolio on which another general search service may not have been pre-installed.
Mobile Service Distribution/ Placement Bonus Agreement
49. Google entered into Mobile Service Distribution/ Marketing Agreement with a ………….. number of OEMs
50. After explaining the relevant aspects of the Android ecosystem of Google, now, the Commission proceeds to examine the matter on merits.
Relevant Market and Assessment of Dominance
51. The instant matter pertains to allegations of abuse of dominant position by Google in violation of Section 4 of the Act. The assessment framework under Section 4 requires delineation of relevant market(s) wherein the concerned entity operates followed by assessment of the market power i.e., whether such entity holds a dominant position. Finally, the conduct of the dominant entity is examined to assess whether it is abusive in nature, in terms of various provisions of Section 4(2) of the Act.
52. Relevant market has been defined under Section 2(r) of the Act, as “the market which may be determined by the commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets.” Thus, delineation of relevant market generally has two dimensions i.e., relevant product market and the relevant geographic market. Similar connotation can be derived from Section 19(5) of the Act.
53. Section 2(t) of the Act defines ‘relevant product market’ as “a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use.” Moreover, Section l9(7) of the Act provides a list of factors to be considered by the Commission for determination of the relevant product market, which includes physical characteristics or end use of the goods, price of goods or services, consumer preferences, etc.
54. Relevant geographic market has been defined under Section 2(s) of the Act as “a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas”. In this regard, Section l9(6) of the Act lists various factors which may be given due regard to by the Commission while determining the relevant geographic market viz. regulatory trade barriers, local specification requirements, language, transport costs, consumer preferences, etc.
55. As observed by the Hon’ble Supreme Court of India in Civil Appeal No. 6691 of 2014 titled Competition Commission of India v. Co-ordination Committee of Artists and Technicians of WB. Film and Television and Ors., market definition is a tool to identify and define the boundaries of competition between firms. It serves to establish the framework within which competition policy is applied by the Commission. The main purpose of market definition is to identify in a systematic way the competitive constraints that the undertakings involved face. Further, the objective of defining a market in both its product and geographic dimension is to identify those actual competitors of the undertakings involved that can constrain those undertakings behaviour and of preventing them from behaving independently of effective competitive pressure.
56. After delineation of the relevant market(s), the next step for assessing the alleged abuse of dominant position in terms of Section 4 of the Act, is to examine whether the concerned entity holds dominant position in the relevant market(s), so identified. The explanation to Section 4 of the Act provides that “dominant position” means a position of strength, enjoyed by an enterprise, in the relevant market, which enables it to operate independently of competitive forces prevailing in the relevant market; or affect its competitors or consumers or the relevant market in its favor. Further, Section 19(4) of the Act lists out various factors which are to be considered while determining, whether an enterprise enjoys a dominant position for the purposes of Section 4 of the Act.
57. Based on its assessment in the backdrop of the abovementioned statutory scheme, the DG in its Investigation Report has delineated five relevant markets i.e.,
a. Market for licensable OS for smart mobile devices comprising of Smartphones & Tablets in India
b. Market for app store for Android smart mobile OS in India
c. Market for general web search services in India
d. Market for non-OS specific web browsers in India
e. Market for online video hosting platform (OVHP) in India.
58. The DG has also found Google to be dominant in all the above-mentioned relevant markets.
59. Further, as per MADA, Google requires OEMs to compulsorily pre-install entire GMS suite comprising of Search, Chrome, Play Store, YouTube, Gmail, Drive, Map & Navigation service, Video & Music on demand, Photo service, Chat & Video calling service in compatible Android devices. In the present case, the DG has delineated five relevant markets, as mentioned above which pertains to Google’s products and platforms such as Android, Google Play, Google Search, Chrome and YouTube. Keeping in view the other apps & services which are part of core apps as per MADA, the DG has discussed seven other associated relevant markets i.e., market for e-mail service in India; market for map & navigation service in India; market for cloud storage service in India; market for video on demand service in India; market for music on demand service in India; market for photos service in India; and market for chat and video calling service in India.
60. The reasoning and findings of the DG, submissions of Google on these aspects and the analysis of the Commission, in this regard, is given in succeeding paragraphs.
A. Market for licensable OS for smart mobile devices in India
61. The Commission notes that Operating Systems (OSs) are complex software products that control the basic functions of the device on which it is installed and enable the users to make use of such device. Accordingly, smart mobile OS are designed to support the functioning of smart mobile devices and other compatible software applications (apps). It enables the user to make use of such mobile device and run application software on it. Mobile OS is a crucial part of any smart mobile device. Moreover, smart mobile OSs typically provide a graphical user interface (‘GUI’), application programming interfaces (‘APIs’), and other ancillary functions. These are required for the operation of a smart mobile device and enable new combinations of functions to offer richer usability and innovations. Further, the mobile OS comes pre-installed on mobile devices.
Relevant Market
62. The Commission notes that the DG has examined various aspects for the purpose of delineating relevant market related to mobile operating systems. Based on the analysis of the provisions of the Act and submissions of the parties, the DG has concluded that operating system for personal computers (PC), feature phone or basic phone, as well as non-licensable smart phone OS are distinct products as compared to licensable OS for smart mobile devices and thus, do not belong to the same relevant market. Accordingly, the first relevant market delineated by the DG, in the present case, is the ‘market for licensable OS for smart mobile devices comprising of Smartphones & Tablets in India’. The observations of the Commission in this respect are as follows:
a. OS for PCs/ Laptops vis-a-vis OS for mart mobiles/ Tablets OS
63. The DG has succinctly brought out the difference between the OSs for personal computers vis-à-vis smart mobile devices to assess whether they belong to same relevant market. The Commission notes that from a demand side perspective, OEMs require smart mobile OSs to power their smart mobile devices and cannot use PC OSs for that purpose. E.g., Google has developed Chrome OS, for licensing to computer manufacturers to produce PCs/ laptops whereas, Android OS is licensed for smart mobile devices. Google does not license Chrome OS for smartphones.
64. Further, smart mobile OSs, also require functionalities that are specific to smart mobile devices and are different from those of PC/ laptop OSs viz. in terms of touchscreen, processing capabilities, smaller screen sizes, memory, display, and power management, wireless functions, and apps that are better suited for simpler mobile devices rather than PC OSs which are designed for higher performance CPUs, larger screens and greater hard disc storage capabilities. The DG has also stated that in most cases, the applications developed in the mobile environment are also specific to the mobile domain and not shared with the PC environment and vice versa. Thus, considering these differences, from a demand side perspective, smart mobile OEMs would require a smart mobile OSs to power their devices and PC OSs would not be useful for the same.
65. In this context, it is also apposite to refer to the submission made by One97 Communications Limited (Paytm), which is an app developer and financial technology company. The relevant extracts from the submission are provided hereunder:
‘An OS is a system software product that controls the basic functions of any device and enables users to use the device and run software on it. The OS communicates with the devices’ hardware, and allows other programs – including apps – to run on it. Apps are essentially a type of software through which users can access specific content and services. Apps are optimised for the characteristics of the devices on which they are available, including with respect to features such as text input, screen size or convenience of touch-based interface. Therefore, when software developers create apps, they are required to write the code for the app and compile it separately for each OS.
OSs developed for different types of devices, such as PCs, smart phones and feature phones are distinct from each other. Smart mobile OSs combine the features of a PC OS (such as program execution, error detection and handling, etc.) with additional features (including touchscreen, cellular services, etc.)’
(Emphasis supplied)
66. From a supply side perspective also, it is observed that though PC OS developers may shift to smart mobile OS, but it would require considerable investment in Research & Development (R&D) and also lead time. For example, Microsoft Corporation (India) Pvt. Ltd. (Microsoft) a leading Windows OS manufacturer for PC developed a separate Windows OS specifically designed to run on smart mobile devices in 2010. In this regard, it is apt to refer to the relevant extract of Microsoft’s submission to the DG:
‘…Microsoft’s estimates, it spent approximately …………………… a year on R&D activities related to Windows Phone OS, while it was active in the space, in addition …………………. to the , it spent to acquire the device and service business of Nokia…’
(Emphasis supplied)
67. The DG has also noted that the smartphone OSs and tablet OSs belong to the same product market. In this regard, the Commission also notes that smartphone OSs and tablet OSs belong to the same product market due to similarity in device architecture, as discussed above. In this context, the Commission notes the submission made by Microsoft, which has stated that its Windows Phone OS run on both smart phone as well as smaller tablets. The relevant extract of the said submission is as follows:
‘…Windows Phone OS, which was designed to primarily run-on smart phone and smaller tablets is different and distinct from the classic Windows OS, which is designed to run on larger devices such as Desktop, laptops…’
(Emphasis supplied)
68. Based on the above analysis, the Commission concurs with the view of the DG that PC OSs do not belong to the same product market as smart mobile OSs.
b. Basic or feature phone OSs vis-à-vis smart mobile device OSs
69. The DG has also examined whether basic or feature phone OSs are different from smart phone OSs. The DG noted that that the mobile OSs for smart mobile devices are distinguishable from other mobile devices such as basic and feature phones because the mobile OSs for smart mobile devices unlike feature phones, are designed to support computer like features.
70. In this context, the Commission notes that a feature phone can be described as a basic cell phone with a much smaller screen, more limited text entry mechanism (usually an alpha-numeric keyboard), and relatively limited computing capabilities than a smartphone. A feature phone runs on proprietary firmware, with third-party software support through a platform. A feature phone may or may not include internet capabilities (where internet capabilities are available, the features are very basic – email client and web browser with limited capabilities). On the other hand, smart phones have advanced features which inter alia include high-resolution touch screen display, Wi-Fi connected to internet, web browsing capabilities etc. The ability to install and use other software applications to access services/content is also an important characteristic which distinguishes smart devices from basic mobile devices. Due to the special features, the price of smart mobile device is comparatively higher than that of basic or feature mobile device. Thus, from the end consumer’s point of view, the smart mobile devices cannot be interchanged/ substituted with the basic or feature mobile device due to the distinct characteristics, functionality, and consumer preference.
71. Similarly, from the point of view of Mobile OEMs, a feature phone OS cannot be installed on smart mobile device. Therefore, the Commission is of the view that the OS of basic or feature phones cannot be substituted with the OS of smart mobile device.
72. Further, from supply side perspective also, the suppliers of feature phone OS are different from smart phone OS suppliers as the development of a smart mobile OS requires significant time and resources. Even if the developer in question has already developed a basic and feature phone OS, it will take significant investment both monetary and non-monetary to develop a smart phone OS. Thus, there are substantial barriers of entry associated with development of smart mobile OS. The Investigation has also not revealed any instance where a feature phone OS developer has launched a smart phone OS, whereas on the other hand, some smart phone OS developers viz. Microsoft Windows Phone OS, have exited the market.
73. In this context, it is relevant to note the submission made by one of the third parties i.e., GOQii (a healthcare platform). The relevant excerpt from its reply is reproduced here for the sake of convenience:
‘…KaiOS will not be considered a part of the same market as Android OS, since its is feature phone OS and not a smartphone OS and only offers some limited functionalities…’
(Emphasis supplied)
74. Based on the foregoing analysis, the Commission finds that basic or feature phone OSs are different from smart phone OSs and thus, are not substitutable.
c. Non-licensable OS does not form part of the same relevant market
75. Before adverting to this issue, the Commission, based on the information available on record, notes that smart mobile device OSs can be broadly categorised into two groups viz. licensable and non-licensable. As the name suggests, licensable smart mobile device OSs are those which are available for licensing by the OS developer/ owner with or without a licensing fee. Google’s Android OS is a licensable smart mobile device OS as it is made available by Google for licensing to third party device OEMs i.e., Samsung, Xiaomi, Vivo, etc. Some other licensable smart mobile device OSs are Windows Phone OS, Amazon’s Fire OS, etc. The other category, i.e., non-licensable smart mobile device OSs, includes those that are not licensed by the OS owner and thus, are not available to third party OEMs for installation in their respective smart devices. The prime example of this category is iOS, which is developed by Apple Inc., a vertically integrated OEM, for captive use in their own smart mobile devices. In other words, Apple does not license its iOS to third party smart mobile device OEMs and uses the same in manufacturing its own smart mobile devices i.e., iPhone and iPad. Another example in this category was Blackberry OS which was used captively by Blackberry in its devices.
76. In this regard, Google has contended that Android competes directly against ‘closed’ mobile OSs like Apple’s iOS, as well as other OSs and platforms. The DG has examined this issue in detail for the purpose of delineation of relevant market and concluded that all licensable smart mobile OSs belong to the same product market, but non-licensable OS do not belong to the same relevant market.
77. The DG has observed that Apple’s iOS smart mobile devices are comparatively expensive products, and the consumers may not switch to or consider switching to these OS from a typical smart device installed with other licensable OS (viz. Google’s Android, Windows OS, Fire OS, Symbian OS etc.). In this regard, the DG has also referred to the comparison of the average retail selling price for iOS and Android smart phones in India between 2009 and 2019 and observed that iPhone does not seem to offer any competitive constraint on Android Phones in the Indian smart mobile phone market.
78. In this relation, the Commission observes that from a demand side perspective, third party smart device OEMs viz. Xiaomi, Vivo, Oppo, Samsung, etc. can only install those smart mobile device OSs in their respective devices, which are available for license by the OS owner/ developer (viz. Google’s Android, etc.). Such OEMs cannot obtain non-licensable OSs (viz. Apple’s iOS and BlackBerry OS) as the same is not available for license by the OS owner. Thus, from the perspective of the OEMs, switching to such non-licensable OSs is not an option and thus cannot be considered as a potential substitute to licensable OSs.
79. The Commission notes that there could be some degree of competition between iOS and Google Android devices at the level of end users of smart mobile devices (while taking decision as to which device to buy); however, it does not mean that licensable and non-licensable smart mobile OSs can be seen as substitutes from an OEM perspective. The allegations in this matter relates to imposition of restrictions on the OEMs and therefore, the market definition should duly account for the same and reflect the market realities.
80. In this context, it is important to note the following submissions of few third parties:
80.1. One97 Communications Limited (Paytm) has submitted as under:
‘Apple iOS: iOS is a non-licensable OS, which has been developed by a vertically integrated OEM, Apple, for captive use on their own smart mobile devices. A similar OS was the Blackberry OS which had been developed by Blackberry Limited, and is limited in its usage in the current day.
Google Android OS: While the base version of Android is an open source OS, Google’s version of Android i.e., Google Android OS, which includes certain modifications made by Google to the base version of Android, is not open source. It can only be accessed by OEMs through a license from Google, and cannot be modified by third parties. Any app developed for Google Android OS (i.e., as per Google’s specifications) is not compatible with other Android OSs and needs to be developed / tested and marketed separately.’
(Emphasis supplied)
80.2. Paytm, in its reply has also highlighted the difference between the two OSs from the perspective of an app developer. Paytm has submitted that,
“…Without prejudice to the fact that Android OS and iOS are not substitutable from the perspective of OEMs, from the view of app developers the major differences between an app developed for them are discussed below:
(a) Programming language: Android apps run on Java Kotlin languages and iOS apps run on Objective-C or Swift.
(b) Development tool kits: While developing apps for Google’s Play Store or Apple’s App Store, the apps have to be integrated into the Android Application Package (APK) and Software Development Kit (SDK) of Android or iOS respectively.
(c) Testing: Testing of the apps during the development stage is different because of the simulators used – the iOS simulator is much faster than the Android one.
(d) Interface: The types and quality of iOS animations is different to those in Android.
(e) Back button on the handset: On Android OS, a back button is used to navigate back to a previous screen. Due to the lack of this button on Apple iOS app developers have indicate on the screen how users have to go back to a previous screen or if there is another way to complete this action using another interaction flow.’
(Emphasis supplied)
80.3. Data Ingenous Global Limited which provides mobile app development services in India stated that,
“…The high-level differences – from App developer’s perspective – between apps developed for Android OS and iOS include different programming languages, development tool kits, testing and interface requirements, other OS specific features (such as, iOS not having a back button like Android and therefore, apps needing to be different, etc.)…”
(Emphasis supplied)
80.4. CE Info Systems Pvt Ltd. (MapmyIndia), which provides digital maps and location technologies in India, stated that
“…Each operating system requires apps to be written and compiled to work on that operating system, and to use libraries and tools which would allow apps to work, be installable and be discoverable by users of those operating systems….”
(Emphasis supplied)
80.5. MakeMyTrip (India) Private Limited (MakeMyTrip) which provides a wide range of travel related services and products through online and offline channels in India as well as overseas stated that,
“…Apps developed for Android and iOS are built using different programming languages and operate on separate operating systems. Hence apps for both these operating systems need to be developed separately…”.
(Emphasis supplied)
81. Thus, even from the app developer perspective also, there are multiple technical differences between Android and iOS viz. programming languages, development tool kits, testing and interface requirements, etc. The app developer cannot simply port the app developed for one OS onto another OS due to these technical differences.
82. In this regard, the following responses furnished by few third-party mobile handset manufacturers (OEMs) is also noted:
82.1. OPPO Mobiles India Private Limited (OPPO) has stated that,
“…Apps developed for different OS are based on different basic OS (The Apps developed for Android OS are based on Linux OS). To state further, it is impossible to shift the apps written for Linux OS to iOS…”
(Emphasis supplied)
82.2. Huawei Telecommunications (India) Company Private Limited (Huawei) has stated that,
“…the Developers shall customize their Apps with respect to specifications and User Interface (UI) of Android OS and other OSs. And the main difficulties are the migration cost, including migration from one ecosystem to another, and the developers need to adapt their Apps to the APIs differ from one OS to another.’
(Emphasis supplied)
83. The DG has also examined the judgments of the foreign jurisdictions and noted that Competition Authorities and Courts in other jurisdictions have also steadfastly opined that the licensable and non-licensable OS do not belong to the same relevant market.
84. Based on the above analysis, the Commission agrees with the findings of the DG and holds that all licensable smart mobile deice OSs are part of the same relevant market; however, non-licensable OSs do not belong to the same relevant market as that of licensable OSs.
85. Further, the DG has considered ‘India’ as the relevant geographic market, in relation to the market for licensable smart mobile device operating system, in accordance with the provisions of Section 2(t) read with Section 19(6) of the Act. The Commission notes that the terms & license conditions of OS for smart mobile device from the point of view of OEMs are homogeneous across the country. The Commission further notes that the number of apps that are made part of GMS suite by Google vary from country to country and Google follow different policies for licensing of OS depending on the region’s legal framework & regime. Moreover, the consumer’s preference, availability of mobile apps in local languages and location-based applications and services as also other specifications of smart mobile OS are uniform across the Indian geographical area. Thus, the conditions for supply and demand of smart mobile OS are homogenous and distinct in ‘India’. Therefore, relevant geographic market is the territory of India.
86. In view of the aforesaid, the Commission delineates the market for licensable OS for smart mobile devices in India as a distinct relevant market in terms of the various provisions of the Act.
Assessment of Dominance of Google
87. The DG has examined the dominance of Google in the market for licensable OS for smart mobile devices comprising of smartphones & tablets in India. After analysis of various factors such as control of Google over Android ecosystem; requirement of Google Account; availability of large number of applications in the Play Store; large market share enjoyed by Google in the relevant market; access to huge financial resources; existence of entry barriers; lack of countervailing buying power of OEMs and end users, the DG has concluded that Android OS holds a dominant position in the relevant market of licensable operating system for smart mobile device in India since 2011. The observations of the Commission in this respect are as follows:
a) Control of Google over Android
88. The Commission notes that though Google claims that Android is an open-source project, however, Google has an important influence in the development of Android OS. Google does most of the development of the source code of the Android platform for which Google has admitted having invested a substantial amount of money. In this regard, it would be apposite to refer to the reply of One97 Communications Limited, wherein, it has stated that:
“…Whilst Android OS is an open-source OS, Google still holds a significant leading position vis-à-vis other Android OS providers given a number of factors, including that the governance model of Android is run by Google, which determines its roadmap, decides on features and new releases and tightly controls the compatibility of Android forks. Google unilaterally decides when the source code of the Android platform is made available and typically releases the source code of a new version of Android only after the first Google flagship device with this new version has been launched…”
(Emphasis supplied)
89. The Commission notes that the governance model of Android is run by Google, which determines the roadmap, decides on features and new releases. Google also controls the compatibility of derivatives of the Android OS by way of placing various restrictions on the OEMs. The source code contributions by developers other than Google are also noted to be verified and approved by people in the AOSP governance structure which are typically Google employees1.
90. Since April 2011, Google has released several OS versions, with many more intermediate and minor versions updates. Each version of Android introduces new APIs, bug fixes, security fixes, new features, better experience to users, etc. Using an outdated version of Android increases the susceptibility of the device to malware and viruses that would be prevented by a security patch designed to address current threats. Further, running an outdated version of Android may deprive a user’s ability to use new app as some apps will require a more recent version of Android. In this regard, it is noted that though OEMs are responsible for pushing updates to users’ devices, however, Google provides information to help OEMs and developers to update their devices and apps to provide users with a seamless transition to the newest version of Android.
91. The Commission also notes from various responses filed by various smart mobile OEMs with the DG, that the OEMs are required to invest considerable resources for such Android upgrades.
92. It is also noted that Google owns the IPR to the Android OS and as per the Brand Guidelines2, the ‘Android’ name and the Android logo, are property of Google LLC and not part of the assets available through the Android Open-Source Project. Furthermore, as per the guidelines, the use of the ‘Android’ trademark on hardware, packaging or marketing materials of device is restricted to Android-compatible devices only. Therefore, in order to use these IPR, the OEMs must adhere to the obligations imposed under MADA that all its devices must be an Android compatible device. Accordingly, the Commission observes that Google controls the licensing of trademarks related to Android.
93. Further, as per the Android compatibility program which defines technical details of the Android platform and provides tools for OEMs to ensure developer applications run on a variety of devices, it is required that OEMs to build Android device that are compatible. For this purpose, the devices are required to comply with Android Compatibility Definition Documents (‘CDD’). CDD enumerates software and hardware requirements of a compatible Android device and is published by Google from time to time. The device also must pass the Compatibility Test Suite (‘CTS’), a software suite that test the compatibility of a device is also published by Google. It is only after complying with the CDD and passing the CTS that the device of the OEM is Android compatible.
94. Thus, the Investigation has revealed that even though the source code for the Android mobile OS is released by Google for free under an open source license, Android based device OEMs are highly dependent on Google as they have to ensure that all the hardware and software features of their smart mobile devices are compatible with the latest versions of Android released by Google from time to time, otherwise none of the apps developed by Google or third party app developers would be functional on such incompatible devices. Further, OEMs are also dependent on Google for using IPR related to Android. Thus, the Commission notes that though Android OS is an open-source project, it is actually controlled by Google.
b) Market Share Analysis
95. The DG sought details of competitors of Android OS in licensable smart mobile device OS in India from Google pursuant to which Google has cited IDC quarterly report of 09.05.2019 on market share of all OSs on mobile devices (all mobile devices) sold in India from January 2014 to March 2019. After perusal of the same, it was noted that the IDC data reflects estimated share of OSs used in all types of mobile devices, irrespective of whether they are installed in a smart mobile device or the feature phones. Accordingly, the IDC data includes ‘KaiOS’ (light operating system for smart feature phones) and ‘Other Real Time OSs’ (feature phones) which are not part of the relevant market of licensable smart mobile operating system in India. Further, it also includes other non-licensable OSs viz. iOS and BlackBerry OS which are not part of the relevant market. Thus, the DG has noted that the IDC data cited by Google does not correctly reflect the market share of competitors in the relevant market in India. The Commission agrees with this approach of the DG for reasons elaborated above.
96. The DG has relied on the data submitted by the IDC Centre for Consultancy & Research Pvt. Ltd., on the annual shipment of Smartphones and Tablets in India over the past few years. The same is extracted below:
Table 1: Annual Shipment of Smartphones and Tablets in India (OS-wise)
