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A US court recently ruled against Google for anti-competitive practices, reopening many debates surrounding its market dominance. In October, a United States court issued an injunction against the technology giant, mandating vast changes in its Google Play Store policies. The ruling stemmed from a legal battle with Epic Games – one with dire implications for the Indian tech landscape as well.
US Court's Ruling: Key Changes for Google
On October 7, 2024, US District Judge James Donato ordered Google to implement significant changes to the operation of its Play Store. This ruling originated from legal complaints brought up by ‘Fortnite’ game creator, Epic Games, against Google for its monopoly over app distribution and payment methods on Android. Google is ordered to allow users to download or ‘sideload’ apps from third-party platforms.
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Apart from that, Google can no longer lay down restrictions related to competing systems of in-app payments, nor can it pay device manufacturers to pre-install the Play Store on Android devices. These changes aim to dilute Google's hold on app distribution which the court found objectionable from the competitor's point of view. Google has expressed concerns that these changes might lead to higher security and privacy risks for Android users, though the ruling stands for now, with some exceptions until 2027.
India’s Own Struggles with Google’s Monopoly
India has already raised alarms against Google's market behaviour. In 2022, it fined Google Rs 1,337.76 crore for anti-competitive practices with respect to Android devices. Just recently, in March 2024, the court set its eyes on investigating Google for its billing policies on the Play Store after Indian companies raised complaints citing high commission fees. Google charges a huge fee of up to 30% on in-app purchases, which is exceptionally high, especially when compared to other transactions like credit card payments and UPI.
App developers in India are reeling under additional pressure, especially app owners of subscription-based services, having been slapped with exorbitantly high commission rates for first-year subscriptions by Google, followed by reduced rates later for renewals. Voices from within the Indian technology industries are pressing for more equitable commission models.
Impact on Publishers and Journalism
The rising dominance of Google is raising enough worries in the media and publishing sector regarding the monetisation of content. One immediate concern is with respect to how AI-generated content and "zero-click searches," in which Google delivers direct answers to users on the search result pages rather than having users tap the link to the original publisher's site, threaten to hamper the traffic that publishers rely on and thus compromise their ability to make money from ads.
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Further, it has been argued that Google limits certain kinds of ads and retail links for news apps, and thus further squeezes revenue-generating opportunities from the media houses. Publishers cannot engage in affiliate marketing when using Google’s platform, a major source of revenue for many, because Google blocks such links which further intensifies their monetisation problems.
Publishers are quite frustrated on these terms as AI and these zero-click searches reduce the traffic which news outlets need in order to survive. It gets worse when content is used without the permission or remuneration of the owners, violating copyright and intellectual property laws.
What India Can Learn from the US Ruling
India's app distribution market relies heavily on Google Play. Nevertheless, the US ruling would at least provide some room for competition to roar in the Indian market. Alternatives exist, like GetApps and Galaxy Store, but they lack the popularity of Google's Play Store. If Indian regulators take cues from the US decision, this could potentially open up opportunities for smaller app stores to enter the market by providing developers with a reasonably level playing ground.
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Indian cyber-law experts agree that a similar ruling in India would greatly benefit smaller developers and startups. Mumbai-based lawyer and artificial intelligence expert Prashant Mali said that such a ruling would aid in creating an ecosystem that does not stifle the growth of smaller players due to the monopoly of the dominant platform. Experts caution that unchecked dominance of tech giants such as Google can threaten the health of the digital economy by stifling innovation and restricting choices available to consumers.
India’s Regulatory Landscape and the Need for Faster Action
India has already taken steps in this direction with the Digital Personal Data Protection Act and the Digital Competition Bill of 2024, intended to regulate big techs. However, experts assert that the implementation of these laws must be stricter and faster if India wants to keep pace with the rapidly changing tech world.