Dragging Microsoft in the ongoing NCLAT hearing in the Android appeal, tech giant Google argued before the Division Bench on Monday that unlike Microsoft’s Windows-powered mobile phones, where its default search engine Bing cannot be changed, Google allows users of Android phones to change their default search engine from Google to any other competing search engines.
Continuing Google’s arguments for the sixth day, the tech giant’s counsel, Arun Kathpalia, submitted to NCLAT that nothing precludes competing search apps from being pre-installed or downloaded directly.
Also, CCI’s conclusions relating to “competitive edge,” “entry barrier,” and “status quo bias” stemming from setting Google search as the default are flawed. Also, unlike Microsoft, such default status can be changed for Google, said Google Counsel Kathpalia.
Google asserted that reliance on Microsoft Windows data to show that Google search is not downloaded widely when Bing is allegedly pre-installed is also misplaced. Even then, Google’s share is 27 per cent on Windows devices, according to Kathpalia.
Even on desktops, where Bing is preinstalled on about 75 per cent of devices, Google search usage is high.
Google counsel submitted that the most searched keyword on Bing is “Google” (42 million searches). This is to be seen in the context of Bing being an unchangeable default search provider. This shows that users use the default, preinstalled Bing to reach Google search. In turn, this establishes that Google is a better product, the Google counsel submitted.
Kathpalia argued that CCI has not disclosed in the Android ruling that Bing is not just preinstalled but also set as the unchangeable default on Microsoft Windows devices.
It may be recalled that CCI had in its Android ruling of October 20 of last year noted that Google repeatedly claims that higher usage for its services is due to better products rather than the pre-installation. In this regard, the Commission noted that Google, by its conduct (by way of imposing mandatory pre-installation) as well as in its submissions, acknowledges the importance of pre-installation as a distribution channel.
The importance of pre-installation as a distribution channel can also be understood by comparing the usage of Google search on devices where it is pre-installed with devices where it is not pre-installed, i.e., Windows-based smart phones and Apple devices based on iOS.
The usage of Google search in Microsoft’s Windows Phones in India is far less, at 18.14 per cent in 2017, 8.11 per cent in 2018, and 4.94 per cent in 2019, when compared with its overall market share of over 95 per cent as per StatCounter data. Thus, Google’s share of general search queries is lower on Microsoft’s Windows mobile phone, where the Google search app is not pre-installed (or set as the default search engine for the native browser), in comparison to Android, where the Google search app is pre-installed in the default Home Screen, the CCI had held.
Revenue sharing agreements
Google-submitted RSAs are entirely voluntary. They are used to set Google Search as the default: Post-2014, RSAs are on a device-by-device basis, not a portfolio basis. Google submitted that RSAs do not impose any restrictions across the entire portfolio of devices (or any devices not specifically mentioned in the agreement). This is why Xiaomi has said that it had multiple search providers set as default on various devices (that were not subject to RSAs), according to Google.
Google’s counsel asserted that CCI committed an error in finding that an OEM has to forego revenue for the entire portfolio if it breaches exclusivity by preinstallation of competing search app.
In its Android ruling, CCI held that RSAs helped Google secure exclusivity for its search services to the total exclusion of competitors.
The combined results of these agreements (MADA, AFA, RSA) guaranteed continuous access to search queries of mobile users, which helped not only in protecting the advertisement revenue but also in reaping the network effects through continuous improvement of services to the exclusion of competitors. With these agreements in place, the competitors never stood a chance to compete effectively with Google, and ultimately, these agreements resulted in foreclosing the market for them as well as eliminating choice for users, as CCI ruled.
