In Light of South Korea’s Action on Google and Apple, India has a Unique Opportunity to Act as a Modern-day Peacekeeper

Over the last few years, startups and developers from around the world have been challenging Apple and Google over its app store policies. Epic Games, the developer of the popular game Fortnite, was the trailblazer who fired the first salvo with its anti-trust lawsuits in the US. The trigger: Epic being kicked out by Apple from their AppStore.

The India edition of the battle started with two independent but back-to-back actions by Google: the company’s decision to remove Paytm from its Playstore and the announcement to enforce its own billing system on developers. Following this, founders and developers in India were up in arms, knocking on the doors of the government to intervene.

The Competition Commission of India (CCI), at the time, found prima facie merit in the claim that Google was indulging in anti-competitive practises on its Playstore. The CCI also started an investigation into the matter.

While the CCI verdict is still awaited, the South Korean Assembly recently went on to enact a groundbreaking legislation, one that bars app marketplace operators like Google and Apple from forcing developers to use their in-app payment systems.

This legislation has opened the way for app developers to themselves choose their payment option as well as for other payment providers to compete in the app economy. The bill also contains provisions for authorities to intervene in the case of any disputes, prevent retaliation or any actions that undermine fair competition.

The India influence and opportunity

Digital technology platforms like app stores are not country specific but global. It's extremely challenging and costly to investigate and incriminate Google, or any of the Big Tech companies for that matter, for alleged anti-competitive practices given the nature of tech platforms. This is compounded further given its global operations and the vast resources at the company’s disposal.

It is all the more problematic for nation states and jurisdictions with limited resources to take on the tech giant, much less stand up to them or bring them to book. In January, Google threatened to pull out of Australia when faced with regulatory intervention.

What this also means is that India has a unique opportunity: Android enjoys nearly 90% share of the smartphone market here. The country also accounts for nearly two-thirds of the Android developer and consumer base globally. It is also the market that is expected to bring in the maximum growth over the next decade. All of this makes India a crucial market for both Google as well as the global smartphone industry.

Given the size and significance of the India market, any legislative action in our country will significantly influence and determine the rules governing the global app economy. What happens here will set the tone and discourse for smartphone markets all over the world.

In doing so, not only will we be providing leadership to the world, we would also be coming to the aid and rescue of developers across the globe and not just from within the county – a modern-day diplomatic and peacekeeping mission if you will.

If Google were to roll out a set of policies in India, say as a result of legislative action, given the global nature of app stores, it would be prudent for the company to release the same terms and benefits to all their developers and customers across the globe. It would also be expected of them.

The need for proactive legislation

Another story that is emerging – based on antitrust probes and verdicts from around the world – is that the challenge of anti-competitive practices by Google is not just limited to the app economy but manifests in almost every market the technology major is operating in: be it search, browser, advertising, smartphone OS, smart tv OS, keyword bidding, app economy or payments.

There have also been several instances where Google has been found guilty of anti-competitive misconduct across these markets with fines also being imposed – the most recent being the South Korean one wherein its antitrust regulator – the Korea Fair Trade Commission – fined the company $177 million for abusing market dominance.

The quantum of fines have ranged from a few millions to a few billions in some. While some of these fines would be the highest imposed by the anti trust regular in their respective jurisdictions, and while the amounts are also high enough for some of the major companies in their respective jurisdictions, for the behemoth in perspective, the fines, even the ones in few billions, tantamount to a light rap on the knuckle.

An indictment verdict, if at all, comes after a couple of years, and even when it does, the fines would not be substantial enough to make any dent in business fortunes. The playbook is as old as the Microsoft vs Sun battle from the early days of the internet. By the time both parties decided to settle, Microsoft had become a dominant player and had also garnered significantly more revenue than it put into defending its position in the legal challenge.

In our own backyard, we have the story of the valiant Murugavel of Bharatmatirmony taking on the might of Google and securing a favourable verdict from the CCI, and in the process expending energy and resources that should ideally have gone into building his company and brand. Fortunately for him, the story is that of a favourable verdict, a successful company and a heroic effort.

Not everyone will be that fortunate. Not everyone will have the liberty to take on such a heroic path – nor should everyone have to. Which brings us to the point of proactive legislation.

Given Google’s presence and dominance in multiple key markets is tied to the health of the digital and internet economy (search, advertising, browser, smartphone & smartphone OS, app economy, payments etc), it becomes pertinent for the Indian Government, and its key regulatory institutions involved – MeiTY, CCI and RBI – to take note and proactively enact legislative actions for the benefit of our ecosystem and our startups.

In the long run, it is not ex post facto fines but proactive and progressive legislative efforts that will nurture and nourish a healthy, innovative and competitive ecosystem.

BY: Mr. Sijo Kuruvilla, George, Executive Director- Alliance of Digital India Foundation