Indian Government Plans Action Against Google; Know Why

An antitrust watchdog found last year that Alphabet Inc.’s Google (GOOGL.O) had abused its market position by engaging in anti-competitive practices; as a result, the Indian government plans to take action, a top IT minister told Reuters. In two cases involving Google’s abuse of its dominant position in the Android operating system market and its pressure on developers to use its in-app payment system, India’s antitrust body fined the company $275 million in October.

According to Rajeev Chandrasekhar, the federal deputy minister for information technology, such findings are “serious” and cause “deep concern” for the Indian federal government, which will take its own action against Google. This was stated to Reuters in an interview at the IT ministry in New Delhi. The ministry must act, according to Chandrasekhar. “We have thought through it. You will see it in the coming weeks. Certainly, it’s not something that we will leave and push under the carpet.” The minister chose not to elaborate on the potential policy or regulatory measures the government could implement.

One of the most senior members of Prime Minister Narendra Modi’s administration, Chandrasekhar, stated that the problem “is worrying, not just for us, it’s worrying for the entire digital ecosystem in India.” An inquiry about Google’s thoughts on the minister’s remarks was not answered. When asked whether he had discussed the matter with Google, Chandrasekhar responded that there is no need for any discussion. There is a court’s determination.

While the case of the payment is still on appeal, an Indian tribunal declared in March that the Competition Commission of India’s conclusions regarding Google’s anti-competitive behaviour in the Android market was accurate in response to a legal challenge. The minister’s remarks are made against the backdrop of escalating hostilities between Google and Indian businesses.

After Match Group (MTCH.O), the company that owns Tinder, and numerous startups claimed that Google’s new service fee system for in-app payments violates the competition commission’s October decision, India’s competition watchdog opened a new investigation into the company. In the past, Google has claimed that the service fee funds investments in the Android mobile operating system and the Google Play app store, allowing for their free distribution.