CCI orders DG investigation into allegations of anti-competitive agreements between Google and Smart TV manufacturers

The Competition Commission of India (CCI) has ordered a probe by its Director General (DG) into allegedly anti-competitive agreements entered into by Google with smart TV manufacturers (Kshitiz Arya v. Google LLC). .The order was passed in a plea alleging that six out of the top ten smart TV manufacturers have signed up with Android TV, and thereby, Google has effectively established its dominance in the market for licensable operating systems for smart televisions.“The Commission is of the prima facie opinion that mandatory pre-installation of all the Google Applications under Television App Distribution Agreements (TADA) amounts to imposition of unfair condition on the smart TV device manufacturers and thereby in contravention of Section 4(2)(a)(i) of the Act,” the CCI order said..The agreements also amount to prima facie leveraging of Google’s dominance in Play Store to protect the relevant markets such as online video hosting services offered by YouTube, etc. in contravention of Section 4(2)(e) of the Act, the CCI added.All these aspects warrant a detailed investigation, the competition watchdog said, ordering a DG investigation.The CCI also said that it was of prima facie opinion that by making pre-installation of Google’s proprietary apps, particularly Play Store, conditional upon signing of Android Compatibility Commitments (ACC) for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android..As per the informants, these agreements entered into between Google with all major smart TV OEMs have virtually created a huge wall for OS developers to develop/license a competing and potentially better ‘forked android’ OS.“As per the Informants, given the significant market position of Google in the relevant markets, such agreements are likely to cause an appreciable adverse effect on competition and therefore, are agreements in contravention of Section 3(1) of the Act,” the CCI noted in its order.The informants also alleged that the obligations imposed by ACC restrict freedom of hardware manufacturers with regard to the whole of their device portfolio, and not just the device category on which the Android TV OS is pre-installed.The CCI said that it is of the prima facie view that such obligations which appear to be applicable across all the devices manufactured by the OEMs are akin to making conclusion of contracts subject to acceptance of supplementary obligations by other parties which, by their nature or according to commercial usage, have no connection with the subject of such contracts and are thus, violative of provisions of Section 4(2)(d) of the Act..“In view of the foregoing, the Commission directs the DG to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act,” the CCI directed.The DG has to complete the investigation and submit a report within a period of 60 days from the date of the order..[Read order]