Anti-Trust Case against Google

Why in NEWS ?

• India's antitrust body ordered an investigation into allegations that Alphabet Inc's Google was abusing its market position to promote its payments app as well as forcing app developers to use its in-app payment system.

About

• Reuters reported in May that the Competition Commission of India (CCI) was looking into a complaint that alleged Google was hurting competition by unfairly promoting its Google Pay app, which allows inter-bank fund transfers and other payment service.
• In its 39-page order, the CCI said Google's agreements with some smartphone makers to have the Google Pay app pre-installed might "disturb the level playing field" and should be investigated.
• The probe has been handed over to the CCI's investigation The case has been filed by an informant whose identity has been kept anonymous. The CCI said there was no merit in investigating some other allegations against the Google Pay app.
• Google said it was pleased that the CCI had rejected several allegations, and remained confident the watchdog will find Google Pay operates in an "extremely competitive environment".
• However, in its order the CCI said that Google Play Store's in-app billing system - that will from March 31, 2022 force app developers to use it and pay a 30% commission - should be investigated.
• Google, whose Android operating system powers nearly 99% of India's roughly 500 million smartphones, has faced criticism from several Indian startups in recent weeks who have publicly voiced concerns about the 30% commission they say is too high. The mandatory use of Google's payment system "restricts the choice available to the app developers", the CCI said in its order.
• The case is one of several antitrust challenges that Google faces in India, including a case on alleged abuse of dominance in the smart TV market as well as in its mobile Android operating system segment

Cases against Google in USA and Europe

• The European Union spent a decade pursuing Google on antitrust charges, ultimately fining the company nearly $10 billion for using illegal tactics to abuse its dominant position on the market.
• With the Justice Department filing its own antitrust case against Google last month, U.S. government lawyers are scrutinizing the European results.
• Google continues to dominate more than 90% of Europe’s search-engine market, just as it did before the E.U. probes began in 2010, data from the analytics firm Stat- Counter show.
• Google competitors in the online shopping business, meanwhile, complain the playing field is still tilted in the tech giant’s favour
• The Justice Department on Tuesday sued Google for abusing its dominance in online search and advertising — the government’s most significant attempt to protect competition since its groundbreaking case against Microsoft more than 20 years ago.
• Lawmakers and consumer advocates have long accused Google of abusing its dominance in online search and advertising.
• The case filed in federal court in Washington, DC, alleges that Google uses billions of dollars collected from advertisers to pay phone manufacturers to ensure Google is the default search engine on browsers

Antitrust Law

• Antitrust law, also referred to as Competition law, aims to protect trade and commerce from unfair restraints, monopolies and price-fixing.
• It ensures that fair competition exists in an open-market economy.
• The Competition Act, 2002 is India’s antitrust law. It repealed and replaced the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) on the recommendations of the Raghavan committee.

The Competition Act, 2002

• It was passed in 2002 and was amended by the Competition (Amendment) Act, 2007. It follows the philosophy of modern competition laws.
• The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations, which causes or likely to cause an appreciable adverse effect on competition within India.
• In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal (COMPAT) were established.
• The government replaced COMPAT with the National Company Law Appellate Tribunal (NCLAT) in 2017.

Competition Commission of India (CCI)

• It is a statutory body responsible for enforcing the objectives of the Competition Act, 2002.
• It is composed of a Chairperson and 6 Members appointed by the Central Government.

Objectives

• To eliminate practices having adverse effects on competition.
• Promote and sustain competition.
• Protect the interests of consumers.
• Ensure freedom of trade in the markets of India.
• The Commission is also required to give an opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

Google Pay

• Google pay earlier known as ‘TEZ’ is Unified Payments Interface (UPI) based instant real-time payment system backed by government and developed by Google facilitating inter-bank transactions through mobile application just like BHIM.
• Google pay or TEZ was first launched in August 2017
• In 2018, Google revamped and rebranded its mobile and online payments services, putting them all under the Google Pay or G Pay umbrella. It is, in essence, the company's own alternative to Apple Pay.