In the wake of worldwide deregulation, privatisation, and liberalisation of markets, developing countries need a competition policy, to monitor and control the growing role of the private sector in the economy to ensure that public monopolies are not simply replaced by private monopolies, N Venkataraman, Additional Solicitor General of India (ASG) has said.
Venkatraman, who is representing the Competition Commission of India, made these remarks on Thursday as part of his opening submissions in the ongoing hearing in Google’s appeal in the Android matter.
Open Source v. Closed Source
Outlining the movement of Android from the open-source ecosystem as it was originally conceived, to a closed-source ecosystem, ASG highlighted the conduct of Google in this movement, as its dominance rapidly increased over various stakeholders and competitors in this ecosystem.
He added that when Google started its journey by launching Android OS as an open-source project, there was both a truly open-source version (AOSP) and a ‘closed-source’ license version. However, at that time, as the objective was to gain market share, few apps were kept in the closed-source version while the open-source version offered more functionality. As Google’s market share increased, it moved the journey of Android from mainly open source to mainly closed source, added ASG.
Lock-in Strategy
‘Google’s business model was not merely intended to allow exploitation of the open-source system and secure royalties or commissions from stakeholders. The grander idea was to throw a free fishing net into the sea of mobile technology and as it expanded, trap all the fish that fell into this net – OEMs and app developers’.
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‘Capturing Google’s history of migration from an open to a closed-source system is not only relevant, but makes it evident that Google’s initial claim to be open-source was nothing but a trap to lock-in OEMs and app developers within the closed-source licensing system and rendering open-source licenses totally irrelevant and extinct by default. And at the end of it, open-source was largely abandoned”, said the ASG.
Venkataraman further argued that over time, Android gained market share and potential competitors emerged to challenge Google by using the AOSP to create their own forked versions of Android OS and other apps/services.
With increased market share, Google felt confident to establish control over the publicly available open-source code by shifting more open-source apps to the closed version and delaying updates to the open version. The objective of this was to increase data collection to maximise revenue, alleged ASG.
‘Choke point capitalism’
Summing up his opening remarks, N Venkataraman argued that Google has created an ecosystem, by a web of agreements to meet the sole objective of preserving its advertisement revenues. Further, Google’s ecosystem has enabled it to reap the network externalities and denied its competitors the same and added that Google’s strategy to choke all points of access with its products (all free) was to preserve its ad revenues could be termed as “choke point capitalism”.
‘Competition harm is not just a matter of single act in a single market but the agglomeration of acts that can add up and create an ecosystem leading to the destruction of competition in and for a market’, said ASG.
Venkataraman now will resume his detailed submissions on merits post-Holi on March 13, 2023.