Government Plans Action Against Google Over Abuse of Market Position

India's government plans to take action against Alphabet's Google after an antitrust watchdog last year found the group to have abused its market position by indulging in anti-competitive practices, a top IT minister told Reuters.

India's antitrust body in October fined Google $275 million (nearly Rs. 2,280 crore) in two cases, which involved abusing its dominant position in the Android operating system market, and pushing developers to use its in-app payment system.

Rajeev Chandrasekhar, the federal deputy minister for information technology, told Reuters in an interview at the IT ministry in New Delhi that such findings are "serious" and cause "deep concern" to India's federal government, which will take its own action against Google.

"The ministry has to take action," Chandrasekhar said. "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 declined to specify what sort of policy or regulatory action the government could take. 

Chandrasekhar, who is one of the highest-ranking officials in Prime Minister Narendra Modi's administration, said the issue "is worrisome, not just for us, it's worrisome for the entire digital ecosystem in India". 

Google did not respond to a request for comment on the minister's remarks. Asked if he had held talks with Google on the issue, Chandrasekhar said "there is no need for any discussion. There is a finding of a court."

While the payments case is still under appeal, an Indian tribunal in March said in response to a legal challenge that the Competition Commission of India's findings of Google's anti-competitive conduct in the Android market were correct.

The comments by the minister come against a backdrop of growing tension between Indian companies and Google.

India's competition watchdog has begun another inquiry into Google after Tinder owner Match Group and many startups alleged that a new service fee system Google uses for in-app payments breaches the competition commission's October decision.

Google has previously said the service fee supports investments in the Google Play app store and the Android mobile operating system, ensuring it can distribute it for free.

Following the Android antitrust order in India, Google was also forced make sweeping changes to how it markets its mobile operating system in the country, even though it warned "no other jurisdiction has ever asked for such far-reaching changes". 

About 97 percent of India's 620 million smartphones run on Android, and the company counts India as a critical growth market.

Other companies such as Apple and Amazon also face cases against them for potential anti-competitive practices in India. Chandrasekhar said the government was keen to take steps to ensure India's digital economy is protected.

"We don't want it to be growth in a way that distorts consumer choice or free competition," he said.

"We will certainly be looking into what the government needs to do to prevent anybody, including but not limited to Google, from abusing their market power or market dominance."

© Thomson Reuters 2023