India Hits Google With an Antitrust Fine, Dealing a Blow to Its $10 Billion Ambition in the Country

Google's Android mobile operating system owns 97 percent of India's smartphone market. Indian regulators ruled that Google violated the country's competition law.

Google India
Google has invested billions in India’s affordable smartphone market.

India’s antitrust regulator has imposed a penalty of $162 million on Alphabet, Google’s parent company, for abusing the market dominance of its Android mobile platform. The Competition Commission of India said in an Oct. 20 order Google has an unfair competitive advantage because the company owns the Android operating system and allows its own mobile applications, such as YouTube and Google search, to come pre-installed on Android devices.

In a statement today (Oct. 21), Google said the Indian regulator’s order is a “major setback for Indian consumers and businesses.” More than 97 percent of India’s smartphones are powered by Google’s Android system, according to Counterpoint, a Hong Kong-based market research firm.

The Indian regulator also ordered Google to give Android phone users the ability to delete pre-installed Google-owned apps. Google said in a statement such changes would open “serious security risks for Indians who trust Android’s security features.” Google said it will review the decision to evaluate next steps.

Google has big ambitions in India, the world’s second most populous country and, unlike its neighboring China, it still welcomes foreign investments. In 2020, Alphabet announced plans to invest $10 billion in India in five to seven years to fund digital infrastructure in India. Its first major deal is a $4.5 billion partnership with Indian telecom giant Jio Platforms, owned by the country’s second richest man Mukesh Ambani, to make affordable smartphones for India’s low-income population.

It’s not the first time Google has faced government crackdown over its Android products. In 2018, the E.U. hit Google with a fine of 4.3 billion euros ($5 billion at the time) for quashing competition in Europe’s online search and advertising markets. It’s the the largest penalty the E.U. has ever imposed on a foreign company. Google later sought to overturn the ruling. In July, an E.U. top court upheld the decision and only reduced the fine by 5 percent to 4.1 billion euros.

Google may face similar antitrust fines in the U.S., pending the result of an ongoing lawsuit brought by the Department of Justice in October 2020. The tech giant is also under an antitrust probe in the U.K. India Hits Google With an Antitrust Fine, Dealing a Blow to Its $10 Billion Ambition in the Country