​This is an audio transcript of The Morning Brief podcast episode: Going After Google​

BG 0:01
This is the morning brief from the economic times.

Dia Rekhi 0:09
When it comes to non Google apps that you use or Google alternatives, can you think of any alternatives that you do use?

Salman Waris 0:18
That's a good question. That's actually very difficult. But I agree, you know, like, generally, by default, it's always been Google to search. If you're searching something, then it's Google.

Prashanto K Roy 0:28
And that would include me as well. I've kind of tended to come down to using Google's offerings, which includes maps, which includes, you know, search etc,

Dia Rekhi 0:39
right. And I think this must be the case with most of us, because I was also thinking about whether I would look for alternatives and I couldn't really think of too many.

Prashanto K Roy 0:50
So I think a lot of people are like you it is worrying from a competitive or anti competitive or antitrust point of view, to think of all devices in your house increasingly kind of being associated with Google.

Dia Rekhi 1:09
I was just having a chat with Salmaan Waris. And Prashanto Roy, a lawyer and an analyst, who are our guests today on something very obvious and perhaps alarming. Just how irreplaceable is Google in our lives right now. A world without Google might seem unimaginable. But maybe if Google wasn't in the picture, and wasn't such a monopoly, we might have had other search giants that would have gone from being nouns to verbs. And that is exactly what the CCI or the Competition Commission of India has been investigating.

BG 1:49
Competition Commission of India has found Google guilty of anti competitive prices that have slapped Google with a fine of 135 crore rupees.

BG 1:59
Google is accused of leveraging its dominant position in markets such as

BG 2:03
online search and AppStore.

BG 2:05
The Competition Commission of India has imposed a second penalty on Google,

BG 2:08
the Competition Commission of India has also restricted Google from certain revenue sharing agreements with smartphone makers.

BG 2:14
The CCI has also ordered Google to allow app developers to use third party billing services.

BG 2:19
CCI also asked Google to allow users to pick their search engine of choice for all relevant services while setting up a phone for the first time.

Prashanto K Roy 2:31
Clearly, the verdict affects Google and which is why Google's response is what it is, and it will probably challenge it.

Salman Waris 2:38
We are in for a serious battle in the courts. That's what I can highlight at this stage because I'm sure Google is not going to take this lying down.

Dia Rekhi 2:47
Salman is a partner head of the technology media and telecom practice at Tech ledges and has been tracking big tech regulation in India with a Hawk eye. Prashanto is a technology analyst who will give us a lowdown on how the verdict directly affects you. But stay tuned to find out much more on why these verdicts are important. As well as what other anti trust bodies are doing globally with big tech. We will prod our guests to find out whether such large fines will cause a dent to Google or if it is the restrictions that the CCI has imposed that are of greater concern. It is Thursday, October 27. I'm your host, Dia Rekhi and you are listening to going after Google on the morning brief.

Dia Rekhi 3:45
The latest verdict relates to a matter on in app purchases, the CCI started investigating the matter following complaints in 2020 and 2021. That allege that Google was abusing its dominant position to push its own in app payment system. The controversy started when Google made it mandatory for app developers to use its billing system. But after facing outrage from app developers, it defered the implementation in India to October. Last week, the CCI passed another verdict, wherein it said that OEMs or original equipment manufacturers should not be forced to pre install a bouquet of Google applications, they should instead get to decide which apps they want to pre install on their smart devices. Google was also prohibited from offering any monetary or other incentives to or enter into an arrangement with OEMs to ensure exclusivity for its search services. If you thought that was all Google faces another antitrust probe were in several news organizations have said that the search giant has abused its dominant position to dictate terms and conditions which unilaterally favorite and result in unfair compensation. Shouldn't for content generated by members. So in a nutshell, Google finds itself in the eye of regulatory storm, not just in India, but worldwide. The CCI and other anti trust bodies have realized the dangers of allowing Google to be the lord and master of the internet world. But here's the thing. Google already is the Lord and Master. So How significant are these verdicts? Really? Let's find out from our guests.

Dia Rekhi 5:32
Thank you so much, Salman, for taking time out to speak to us on the morning brief. What are the biggest points that you noticed about the verdict when you were going through it?

Salman Waris 5:41
I think this is just the beginning of a trend. Most importantly, obviously, the fine itself 936 crores is a huge amount.

Dia Rekhi 5:48
Are these fines really that big of a deal for a company like Google, in your opinion? You know, if you look

Salman Waris 5:53
at it from a global prospective, Google has been issued fines and penalties by different regulators in different jurisdictions. If you plug all this together, especially the recent fines, they constitute actually 7% of Google's average relevant turnover. So it does constitute a substantial amount and that sense, but also they gave a cease and desist order, which basically means that the Google would have to ensure that it does not implement these PlayStore policies, which are anti competitive in nature, as the commission has declared, basically, what was happening was that Google was forcing mandatory usage of GP DS, which is Google Play billing system for all paid apps and in app purchases. And the commission thought that that was an imposition of an unfair condition on app developers. So they restricted Google from using such policies. And also, they have now opened it for app developers to use any other billing system or payment system, the commission has given them 30 days to provide requisite financial details and supporting documents, because they were not satisfied with what was put across by Google. So I think the fact that the commission is not closed, the whole issue altogether by imposing that fine, is something that is most glaring, and it means that maybe the commission could impose further fines as well. So if the fine

Dia Rekhi 7:18
is something that they can, I mean, it could dent their overall revenues, and so on, like you said, but what are the restrictions that are really concerning Google with these orders? And how will it affect them?

Salman Waris 7:31
So I think more than the fines, it's actually the restrictions that are going to, you know, have a major impact on its business and how it does business, either in India, and probably also in the wider region and internationally as well, because various regulators are very closely following each other in terms of how different governments are taking on big tech. And they would cite these examples. So the order earlier this week, actually, sort of specifically mentioned the fact that it was not only in India that Google was using its dominant position, or adopting anti competitive practices with regard to to Android mobile phone devices. They talked about it as a problem globally, on a global basis, and in other jurisdictions as well. So I think that is going to have a bearing. And most importantly, the fact that now Competition Commission, whether it's on the Android mobile devices, aspect, or the current, you know, aspects relating to the billing payment system, I think they have let the cat out of the bag and the app developers are purchases, they are going to be now open to use any third party billing system, which is going to have a major dent on revenues. And Google is trying to, I'm sure it will try and ensure that they can actually get some sort of, even if it's a partial relief from the court.

Dia Rekhi 8:52
It's definitely the strictest action that the CCI has taken so far. On accomplishes. Yes,

Salman Waris 8:59
it is definitely one of the stricter, stricter actions. And in that sense, frankly, if you look at globally also, you know, only South Korea is the only other country that has fine Google on its pricing strategy. So from that perspective, the pricing strategy perspective, I think it is a very landmark and a unique decision by the Indian Competition Commission.

Dia Rekhi 9:21
And do you view this as a big win for Indian startups? Would you think that this will really sort of push the envelope for Indian startups to do better and to bring in more innovation and more options for users?

Salman Waris 9:35
I do agree with that. This is a beginning of a trend. And also, as somebody generally people in the industry have termed it, it's a great project because it protects the Indian intrapreneurs from digital colonization, if I could use that term. And we had controversies around this billing payment system, where Google was pitched against Paytm Paytm. You know, they were restricting Got some of the Paytm apps. So I think it is a big win for the Indian startups such as they are now free to use any other payment or billing gateway.

Dia Rekhi 10:08
But, you know, I was speaking to some people from the startup ecosystem once the order came out yesterday. And they were sort of saying that we're a little worried that Google may indirectly charge a commission. In that case, I made to believe that on indirect sort of payment methods that were being used or alternative payment methods that were being used, they were charging a commission on that as well. So are these loopholes going to be things that Google will pick up on even with the CCI verdict, is that the expectation

Salman Waris 10:42
to a certain extent that they will try and find loopholes within the existing regulatory system. And obviously, as I said, do damage control. So if they're not able to charge direct commissions, they will try and come up with alternatives, where they can charge commission on on other payment and billing systems as well. So maybe as high as what they are doing currently. That is a concern. Again, it would be the regulator that would have to step in and try and amend things.

Dia Rekhi 11:09
You briefly mentioned that, you know, Google is sort of under fire. Globally,

BG 11:15
Europe is taking on Google regulators are preparing to move against Google in an antitrust case, we could be heading toward a formal court case against Google in Europe,

BG 11:24
the Department of Justice and the FTC appear to be looking at whether the leading tech platforms have used improper means to acquire monopoly positions, or to exclude promising rivals from contesting their position.

BG 11:38
Choosing the tech giant of being a monopoly gatekeeper for the internet. Google handles nearly 90% of what Americans are searching for on the internet.

BG 11:47
Google has filed an appeal to overturn a punishment it got from South Korea's Competition Commission last year for attempting to compel the country's mobile phone manufacturers to adopt its Android operating system.

BG 11:59
We're shifting gears now the global nature of Google's battle against antitrust regulators is increasingly apparent with legal pushback in Europe, the United States and now, Australia, the advertising giant ordered to pay about $43 million in antitrust penalties.

Salman Waris 12:16
It was a trend that was building globally, there have been other jurisdictions as well, which have imposed fines, so be it in the EU, we're certain states in the US, or, you know, some other jurisdictions where Japan has initiated investigations against Google, I think we could see some more of these fines being imposed on different aspects by different jurisdictions.

Dia Rekhi 12:39
When I was actually speaking to a lot of lawyers and trying to understand, say, for instance, last week's order, they were saying that it was mimicking a lot of the terms that came out in the EU Commission order. So are we sort of aping what is happening in other places with our own verdicts. Is that a concern also? Or do you think that's the right way to go about it?

Salman Waris 13:02
See, obviously Google's practices have been anti competitive in nature, and generally, not just Google, but a lot of other big tech companies. But generally, as you know, big Tech lawyers say, always law is always a regulation is always catching up with technology. So there was this gap where, you know, regulations, we're still trying to catch up for regulators, we're still trying to get their act together. But if you were to say that we are aping the West, or we are following EU, I think that might not be very correct. However, at the same time, I do agree that yes, certain terms used in the orders or certain, you know, analogies have been drawn from the orders or EU regulator action. So, which could have been avoided? I mean, while obviously, you know, all of us learn from each other, and so does the courts from one jurisdiction to another, but yeah, if there is a blind copying of orders, or if there is, you know, substantial element of aspects of just being replicated, then it does pose a concern.

Dia Rekhi 14:02
Would it be right to say that India is waking up to big tech's misuse of power and tech and read a little late in the day?

Salman Waris 14:10
I would not say that, because, frankly, as I mentioned earlier, you know, India is one of the two countries that have imposed fines on Google for its pricing strategy. There are other jurisdictions that have initiated action or they have initiated investigation. So for example, Japan, for example, EU, Germany, the US, and also certain specific states in the US, like Texas, that have recently opened investigations. But to say that India is just catching up probably might not be the correct thing, because I think we are leading from the front.

Dia Rekhi 14:41
Whatever regulators say, Do you think they can afford to significantly displease Google, for instance?

Salman Waris 14:47
No there has to be a balance between the business case and the fact that you want to have a big player like Google be doing business in India, but at the same time, they have to abide by the laws in India and there are serious regulatory concerns. In the business model that Google has adopted. So I think in that sense, yes, we could probably see more such action.

Dia Rekhi 15:12
Now let's look at the user side of the story and the smart device makers. I recently bought a Phone and Android One to be specific. And as expected, it came with a slew of pre installed apps. Now, I'm not complaining considering it saves me a lot of time. But here's the thing. Even if they weren't on my phone, I would have downloaded Google's apps, not because I'm some Google fan club member, but just out of habit and familiarity. In an email response to et Google said, and I quote, The CCI's decision is a major setback for Indian consumers and businesses, opening serious security risks for Indians who trust Android security features and raising the cost of mobile devices for Indians. Let's find out if our next guest Prashanto Kumar Roy, who is a cyber expert and technology analyst agrees with this. Hi, Prashanto, thank you so much for taking time out to join us on the morning brief. Just to start off the conversation. I wanted to sort of ask you about whether you think that Google's stance about how the CCI is decision is a major setback for Indian consumers and businesses is accurate? Do you feel that there is some strength to that statement?

Prashanto K Roy 16:34
Thanks, Dia, Happy Diwali to you and great to be here. I think the recession from the CCI is clearly a setback for Google. No question about that. Whether it is a major setback for Indian consumers? Well, I think it'll impact Indian consumers both good and bad. Overall choice is important. And in the long run choice is a very good thing. There are some complexities when you're looking at choice for a dominant system like Android. And Android is like, you know, 96 97% of the smartphone market in India at least. So clearly, it ticks all the boxes, as far as dominance from the competitive or antitrust point of view is concerned, I think in the long run, things will level out. In the short run, I don't see a great deal of impact, because of the fact that, you know, competitors, or let's say OEMs, who are doing handsets are not, they're not already with a whole lot of different options. But there will be improvements for the consumer in the sense of, you know, they'll probably be lower costs, there will be more choice. And therefore there will be probably alternate deals that Google will work out. Obviously, they will want to retain customers and retail unique kind of, if not locked in, at least they would like their handset vendors to prefer giving a basket of Google products and you know, sub products and services offering. So therefore, they would probably make their prices more competitive, mixed bag, but I think overall, not bad for the consumer,

Dia Rekhi 17:57
You know Prashanto I bought a phone recently. And it came with all of these pre installed apps. And personally, I found that useful. I'm just curious to know if I'm the odd one out here, like Am I the only one who seems to be happy with the fact that it comes with pre installed apps, because you know, I use Google pretty much. And it's suite of apps, pretty much everything.

Prashanto K Roy 18:19
So I think a lot of people are like you. And that could include me as well, because one, there are quite a few basic services and features that we tend to use, which also happened to be Google, one of them is search. See, Google hasn't got to where it is simply by being a primary monopoly in one part of the ecosystem. And then kind of leveraging that it has gotten to where it is, by being very good in some of the technologies, it is that search is one of them. And it's a very effective and powerful search. And a lot of that search translates into associated technologies, for example, voice based search of voice based commands, and so on. That's all part of this package. So I suspect a lot of people are like that they're quite happy with the basic apps. But it's just that there are no answers to this question of whether you will give dominant control to one entity which can then end to end control and maybe give you a better user experience or you open up the system for competitive play.

Dia Rekhi 19:19
That's an interesting point, Prashanto. But let's look at the alternate scenario of competitive play. What happens then? I mean, are there tons of alternatives in the smart devices ecosystem to Android and the suite of apps that come along with it?

Prashanto K Roy 19:32
You know, given the lack of options, I mean, so for example, let's take televisions. Okay, I would love to be able to say that, yeah, please explore alternate TV sets, non Android sets. But the fact is that you simply have the more there's the most apps, and therefore the more streaming services on all of that on the Android platform now than on any of the proprietary kind of systems which may be sold by individual TV brands. Okay, so If that is the case, then you know just left to their own users. If they're looking at different options, they're going to end up probably going in on the Android side.

Dia Rekhi 20:08
Okay, but if some more competitive landscape does open up new options, how will the millions of Google users, many of them who are even more technically challenged than I am? How will they adapt to them?

Prashanto K Roy 20:22
This is another point that, you know, I am a fairly advanced user. In India, right now, we've got over 600 million smartphone users, about half or maybe more of them are lower down the socio economic pyramid of digital usage. And the next 300 or 400 million, which will take us up to maybe a billion are going to be weighed down on the education literacy and socio economic pyramid. Okay, they really need a simplified experience and not a huge amount of choice. They're also people who want to be able to, you know, switch handsets, maybe they get a cheap secondhand handset to start with get to a slightly better one. So for them, the tight integration and experience is actually a more important thing, and therefore, I'm curious to see how that plays out.

Dia Rekhi 21:05
What about the device manufacturers , Prashanto? How are they reacting to all of this? Are they happy about it? Are they a little on the fence about it? What is their sentiment, like,

Prashanto K Roy 21:07
I would find that device manufacturers would be happy about it. Because you know, I don't think they're very happy about being tied down in terms of negotiations when dealing with a giant like Google. And you know, many of them are actually much smaller than Google. So given the choice, even though initially, I don't see major changes in their basket of offerings to consumers, on their smartphone brands, I suspect that a they'll be happy be they will be looking out for deals and things that they can negotiate with others, maybe with lower Commission's or lower pricing, or, you know, better business terms, and all of that. The other thing I will see them doing is that I'm sure that they would also want to experiment, it just as an extreme wild example, you know, supposing Bing becomes a default offering on a set of smartphones, you know, versus Google search, or a different set of things, you know, will it make a difference? What are people preferring to take initially, that's the kind of experimentation that I'd expect handset vendors to want to get into fairly quickly with a, you know, maybe a few of the models that they have in there.

Dia Rekhi 22:23
Prashanto, how much are these antitrust issues fueled by politics in India? I mean, the narrative of nationalism and so on, and how much of it is really driven by lobbying? Do you think that these filters sort of influence regulatory decisions, which ultimately impact the customer? Right?

Prashanto K Roy 22:50
Yes I would say that, you know, when you look at a nationalist filter, which drives any kind of policymaking, or even decisions on antitrust law, etc, then, you know, you look at really what other groups are driving. So for example, if you were to look at big tech on the may be Amazon and clear dominance, Amazon, Flipkart, Walmart, etc, of E commerce, but, you know, who's who's the entity, which is taking up cudgels, it's not just all traders, it's also larger Indian group, reliance, Jio, etc. So, you have to look at who all are kind of playing at different sides of the table on that. And so, therefore, it may not be simply consumer issues purely, which I mean, the CCI may be looking at it as you know, a very often a consumer thing by nationalism, it distorts policymaking. And by nationalism, you know, I mean, I really mean nationalism, where you go really overboard and say that, you know, just China model of nationalism, where anything, which is homegrown, etc, needs to be given far more bit of an impetus. But then again, it gets complex, because a lot of the Indian entities may actually be funded by foreign funds. So therefore, that becomes another layer of complexity for an antitrust regulator, and so on. So I would say that, yes, they should really keep completely away from the nationalist filter and look at you know, what, in them short, mid, and long term is good for the consumer, when taking action against big tech, and not simply look also at, let's say, global precedents, especially Europe, which is taking a very hard line on big tech. And yes, when they're finding Google, and they're finding the order of 2.5 billion euros, which is more than 15 times of what this fairly small, fine is okay. But we have to look at our interests and our consumer interests, and not predominantly at what Europe is doing and look at that as some kind of a beacon to follow.

Dia Rekhi 24:44
So when it comes to how you see this playing out, do you think it will really dent Google in any way the verdict as such?

Prashanto K Roy 24:53
Clearly, the verdict affects Google and which is why Google's response is what it is and it will probably Probably challenge it. Of course, it is worrying from a competitive or anti competitive or antitrust point of view, to think of all devices in your house increasingly kind of being associated with Google, that in the longer term, by and large, it has shown that, you know, with the lack of competition does lead to longer term decline in quality of offerings, price to customers, and so on. We may not have seen that in Google yet. Therefore, it is not a bad thing to look at some roadblocks or speed breaks or whatever, in the way of the complete dominance of the home ecosystem, including smart TVs and phones, and you know, other smart speakers and stuff like that being Google.

Dia Rekhi 25:43
It all comes down to one big question. How much control are we unwittingly ceding to companies like Google, on our habits, consumption patterns, and most importantly, our choices? Be it Google Meta, Twitter, or even Snapchat, user data is everything. And with the amount of information Google and Facebook have based on my search history, I think there's a good chance they know me better than my family or friends. Now, the question arises that if I didn't have all of the Google Suite apps on my phone, would I have had different preferences? Maybe. And maybe with the CCI's verdict last week, we'll know whether it truly does impact Google or not, considering about 97% of India's smartphone market is Android. And it comes as no surprise that India is one of Google's most important markets. I'm curious to know if just Google it changes to just check online again, though, my sense is that it won't, at least not for those who've been accustomed to Google search engine. I mean, in the off chance that I did get a Bing result, I make sure to log into Google and check again. Yep, I'm that accustomed to Google search. It is sort of like when everyone was up in arms about WhatsApps privacy policy. People switch to telegram. I did too. But I never gave up my WhatsApp account. And now well, I wished Around 80 people on WhatsApp for Diwali and not one on telegram. So I'm guessing you can tell which one I continue to use. user habits are hard to make and even harder to break. We'll have to see if the CCI manages to break the chain with these verdicts. Thank you Salmaan and Prashanto. It is Thursday, October 27. I'm your host, Dia Rekhi and you are listening to going after Google on the morning brief. This episode was produced by Vinay Joshi, sound design Indranil Bhattacharjee, executive producers Anupriya Bahadur and Arijit Barman. Special thanks to Anirban Chowdhury do listen like and share this episode. The morning brief drops every Tuesday, Thursday and Friday, and it's available on Spotify, Apple podcast, Amazon and Google podcasts as well as JioSaavn do tune in to et play our latest platform for all audio content, including the morning brief. Thank you for listening and have a good week ahead. All external sound clips used in this episode belong to their respective owners. Credits are mentioned in the description

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