InvestorQ : Is the CCI justified in imposing a penalty of Rs2,200 crore on Google?
Dhwani Mehta made post

Is the CCI justified in imposing a penalty of Rs2,200 crore on Google?

Dilmini Mercia answered.
4 weeks ago

The Competition Commission of India (CCI) has imposed 2 separate penalties on Google for misusing its dominant position. The penalties are worth Rs2,274 crore. Google has already announced plans to legally contest these penalties. Google is allegedly found guilty of using its dominant position in the search engine and the Google Android platform to weed out competition. For instance, it directs searches to preferred clients and also insists that vendors on Play Store only use Google Pay platforms. CCI has held these practices as anti-competition and has instructed to desist from such practices, apart from the penalty.

In a sense, regulators are almost trying to be impractical. Monopoly rents are bad, but the crux of strategy is about leveraging entry barriers. Obviously, when Google has spent billions of dollars building these entry barriers, it is going to make the best of it for profits. It is somewhat like Microsoft dominating the OS market for PCs. The challenge for CCI is that, unlike hoarding and price rigging in cement, anti-competition practices in the IT and digital space are a lot more subtle and intangible. In the intangibles space, the problem is that the dividing line between strategy and anti-competition practices are very thin.