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How the CCI anti-trust battle involving Google played out for map app wars in India

Google lost its Supreme Court appeal against an antitrust order last month. It came as good news for companies like MapmyIndia, which started the maps game in India.

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New Delhi: In this story nobody is a pauper. MapmyIndia, and BharatMatrimony are both brands belonging to listed companies worth thousands of crores. But they both have played David to Google’s Goliath. 

More than anything else, this story is about how tech behemoth Google’s actions  — intentionally or not — create ripple effects that alter consumer perception and bend market dynamics to its advantage, making it very difficult for another company to grow as big as it did.

Believe it or not, just 10 years ago, the now ubiquitous Google Maps was lagging behind Okhla-based Indian map and navigation service provider MapmyIndia in the Indian app-based navigation segment.

Back in 2013, MapmyIndia had posted a screenshot showing how its own app ranked higher than Google Maps on the Google Play Store, the place where apps can be searched for and downloaded for Android phones. In fact, at the time, MapmyIndia was ranked higher than even Facebook. 

Even in 2017, the media was happy to run separate stories featuring MapmyIndia co-founders and life partners Rakesh and Rashmi Verma and then their son and current CEO Rohan Verma, because the company was a leader in the sector.

Then, the domination of Android phones started in India. By 2018 the media were calling Google Maps the leader with MapmyIndia pushed to the second place

Google owns Android, the open source software project, and makes the best-known version of the Android operating software for smartphones. Google also makes the best-known range of apps for Android phones known as Google Mobile Services which includes Google Maps.

“We are very successful and have a thriving business where we sell navigation services to other businesses,” Rohan Verma told ThePrint. “But our consumer services that would compete with Google Maps never stood a chance because Google is dominating the market unfairly by abusing its dominant position.”

This assertion by Verma has been backed up by the Competition Commission of India (CCI), which passed a major verdict in October 2022 imposing a fine of Rs 1,338 crore on Google for abusing its dominant position and also ordering it to “cease and desist” such activities. 

According to CCI, companies wanting to use Google’s proprietary software sign the Mobile Application Distribution Agreement (MADA), which ensures “mandatory pre-installation of the entire Google Mobile Suite (GMS) under MADA (with no option to uninstall the same) and their prominent placement”.

If you’re a phonemaker you need an operating system (OS) and the best known option is the Android OS, because Apple’s OS is not typically licensed for use in non-Apple devices.

So invariably each Android phone came pre-loaded with Google Maps, removing the need to download any navigation app from MapmyIndia.

That’s why now in 2023 you possibly only know MapmyIndia as a company celebrating the Supreme Court’s verdict from last month rejecting Google’s appeal against the CCI order.

Rohan Verma wrote to the press on 19 January that MapmyIndia is “elated and extremely grateful to the Supreme Court for its order against Google’s appeal”.


Also Read: Google Maps gave new direction to driving. This app can make navigation even smoother


Why is MapmyIndia celebrating?

For its part, Google responded to the CCI order not only with public statements about how it would negatively impact “areas of safety, affordability and expanded use-cases of smartphones”, but also by filing an appeal with the National Company Law Appellate Tribunal (NCLAT) to get an interim stay on the order.   

When NCLAT refused its request, Google appealed to the Supreme Court to get NCLAT to grant an interim stay.

On 19 January the Supreme Court refused to side with Google and directed it to continue seeking adjudication with NCLAT.

It’s quite the twist because as Rohan Verma’s 19 January press statement says: “MapmyIndia pioneered digital mapping in India since 1995, far before the birth of Google.”

“It was discussed in the court how Google foreclosed rivals such as MapmyIndia due to their anti-competitive practices, thereby harming the Indian economy and the consumers’ ability to choose,” Verma’s statement added.

MapmyIndia is now on a stronger footing than it was just a few years ago. Having rejected offers to be bought out by several companies, the Vermas instead chose to make it a   listed company in December 2021.

In its latest financial results for the October-December 2022 quarter, the company has reported a 61 per cent growth in profit after tax (PAT), and a 22 per cent increase in  PAT for the first nine months (April-December 2022) of the financial year.

“Good prospects lie ahead for our consumer app and B2C business, based on recent pro-competition actions by CCI and the Supreme Court, which opens up the market (for) our Mappls app,” Verma said in his statement that accompanied the quarterly results. 

The rise of Google in India

Google Maps officially started in 2005, a full ten years after MapmyIndia started the game.

But in and around 2016, the Reliance Group’s Jio telecom company entered the market with a bang, bringing with it faster and cheaper internet. To capitalise on this, smartphone makers started making affordable phones loaded with the Android operating system, which meant they were also populated with various Google apps.

It was around this time that Google Maps extended its lead over MapmyIndia. After 2016, India became a defacto Android market which means Google Maps was preloaded and readily available to about 95 per cent of smartphone users in India.

A  major bone of contention was that the Google Play Store charged app developers 30 per cent fees and forced apps to only use Google’s billing system (incidentally, another issue the CCI had with Google).

In early 2020, Indian app companies had got together and formed The Alliance of Digital India Foundation (ADIF). The Foundation had a hard launch in October 2020 to push back against Google Play Store seeking a 30 percent fee.

This meant that every time a user bought something from within an app, 30 per cent of the fee would go to Google, and the app developer could only use Google’s billing system to process the payment.

At the time, Google made light of the policy saying it anyway impacts only about 3 per cent of app developers, but it remained a pain point nevertheless.

“App developers in India don’t make enough margin to pay 30 per cent to Google and then have enough for their own expenses like salaries, and investments,” Sijo Kuruvilla, former CEO of ADIF, told ThePrint. “These are still mostly startups that are not yet profitable so every rupee flowing out reduces chances of its survival.”

Secondly, he said, Google is imposing its own billing system on the app developers, which is not fair. 

“ADIF conducted a survey comparing Google billing system to other substitutes,” Kuruvilla said. “Despite Google claiming their service to be the best, our survey found it lacking on purely technical grounds.”

Because Google wanted to enforce the billing policy from 2022 March end in India, ADIF approached CCI in October 2021 to stop Google’s enforcement.

The CCI in November 2020 had already started investigating Google Play Store mandating use of its own payment system. Kuruvilla says CCI subsequently added ADIF as a party to this investigation.

In October 2022, CCI issued a penalty of Rs 936 crore to Google for abusing its dominant position among app stores.

Google is yet to officially back down in India and has only paused implementing the 30 per cent fee and mandating its billing process.

“Google can continue appealing the CCI judgment, delaying any real changes to its business practices,” Kuruvilla said. “Retaining the best law firms to fight their cases costs a drop in the bucket compared to what the company will continue to earn from delaying any real changes to its business practices,” he explained.

Google down but far from out

The latest in India’s “Google-antitrust saga” is the company’s 25 January statement.

Google said it was changing its Android and Google Play practices in India as directed by the CCI, such as allowing phone makers to “license individual Google apps for pre-installation”, and allowing apps to offer “alternative billing system alongside Google Play’s billing system”.

But Google says it will continue to “respectfully appeal certain aspects of the CCI’s decisions”.

However, this stance hasn’t satisfied those ranged against the company.

“It is unfortunate that rather than comply fully in letter, in spirit, and in time, with the orders of the apex court of India, Google is still attempting to dilute and delay the outcome of the CCI investigation and directives,” Verma told The Print following Google’s statement. “Instead, Google is preparing the ground to stall changes as required by CCI by claiming it is complex and will require significant work,” he poined out.

Sometimes regulatory actions don’t work

Past evidence shows that Google is possibly too big a company for regulatory action to have any meaningful impact. Take the example of BharatMatrimony, a website that connects prospective brides and grooms. Its parent company was the first company to file a complaint against Google with the CCI in 2012.

BharatMatrimony owner’s contention was that Google was abusing its dominance for commercial gains, including placing its own services at the top of search results. The contention also included Google allowing others to bid for keywords like ‘bharatmatrimony’ on the Google AdWords platform, despite the company BharatMatrimony having trademarked it. 

The AdWords platform is where advertisers can bid and buy keywords they want triggering their ads to appear on the Google Search home screen.

Google’s alleged actions meant that when a consumer uses Google Search to look for ‘Bharat Matrimony’, rivals who purchased advertisements with the same keywords would have their ads appearing at the top of the screen while the search results that show the link to the bharatmatrimony website appeared lower.

In response to the BharatMatrimony case, in 2018, CCI found Google guilty of abusing its dominant position in online search and advertising and fined the company nearly Rs 136 crore.

However, despite the judgement finding Google guilty, not much has changed according to Murugavel Janakiraman, founder-CEO of Bharat Matrimony.

“Google is still abusing its dominant position in internet search and advertising,” Janakiraman told ThePrint. “About 60-70 per cent of our online advertising budget is spent on Google, which is around Rs 4 crore a month. Our budget for advertising on Google is growing faster every year.” 

“We cannot afford to not advertise on Google services because it is such a dominant player,” he added. “If we don’t defend our keywords and trademarks, rivals can bid for it. Now 80 per cent of the users find us on Google Play Store so we must spend to remain prominent on play store as well,” he added.

(Edited by Geethalakshmi Ramanathan)

 


Also Read: Meet the 3 young Indians whose probing landed Google with a Rs 1,338 cr anti-trust fine


 

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