Google’s high-profile case against India’s antitrust body Competition Commission of India (CCI) at the Supreme Court has ignited the rivalry of two tech giants-Google and Amazon-in a new vertical that is Android market space.

Early this year, the Competition Commission of India (CCI) imposed a fine of Rs 1,337 crore on Google and asked it to scrap the controversial “Android compatibility commitment and the mobile application distribution agreement” that reportedly harms other Android players. While Google had paid the penalty, it alleges that CCI’s directive to scrap its policy aimed “to protect and enable Amazon to compete” with it.

A query sent to Amazon returned with a plain response, “We do not have any comments on the development.” Google also refused to comment as the matter is sub-judice.

Experts say that the development has the potential to intensify the battle between the two US-giants not only in the Android market but in all other verticals in the world’s largest consumer market, tech leaders say. It is also being viewed as a war between two digital advertising walled gardens.

“This is the first time Google has named Amazon in the case and called its competitors motivated parties,” an industry source claimed, adding that Google in its 604-page appeal has mentioned Amazon 72 times, Samsung 50 times and some other players many times.

The revelations have stumped the e-commerce major as it has no locus standi in the legal case. The company was neither the party in the case at CCI and NCLAT nor at the Supreme Court. However, the company may explore its options if the situation arises, industry sources say.

“Amazon did appear before the CCI as “witness” in July 2022 when CCI asked industry players including Amazon, Mozilla and device manufacturers during the probe against Google. Amazon had claimed in its submission that it had experienced significant difficulties in finding OEM partners to manufacture smart TVs running its Fire OS due to Google's Android compatibility commitment clause,” said a source.

Amazon and FireOS

Amazon has its own operating system-Fire OS-a forked or modified version of the open source Android. Fire OS runs Amazon's Fire TV and tablets.

Android TV had 66% market share in India in 2022 while Fire OS has only 1% share in the country, according to market research firm Counterpoint Research.

Google has claimed in its SC filing, “FireOS failed globally due to poor user experience. In India, the Fire Phone was not even launched ….Of all the device makers, only one refused to engage with Amazon on the FireOS because of the agreements it had with Google.”

“The e-commerce major seeks to expand its Fire TV business in India as it takes on arch-rival Google amid rising adoption of connected TV in the country. Both companies are also fighting to be the operating system of Indian households (Chrome and FireOS),” a digital expert said.

He added, “Early this year, Amazon announced a partnership with Xiaomi to launch a television that runs on ‘Fire OS 7.’ Besides, Amazon TV supports Apple Airplay and Miracast, enabling people to directly mirror content from their Apple and Android phones, respectively.”

Ad business and other verticals

Across the internet, Google and Amazon compete head-to-head, and the rivalry between these two internet giants has only grown more intense over the past few years because they compete in businesses like digital ads, cloud services, smart speaker systems, and CTV products.

Amazon’s advertising business continues to grow despite a general slowdown in digital advertising, which has hurt companies like Google parent Alphabet and Meta.

Amazon India's digital advertising revenue touched Rs 4,170 crore in FY22. It was still much less compared to Google and Meta’s ad revenues of about Rs 25,000 Cr and Rs 16,000 Cr. However, Amazon occupying nearly 8 percent of India’s approx Rs 45,000 Cr digital ad market alerted the walled gardens.

“Amazon is now globally the third largest digital advertising entity in revenue terms.  Alongside the growth of the retail media network, of which Amazon has a dominance, is projected to have a growth at a healthy 20% YOY, while Google is growing at about 2%,” says Sajal Gupta, CEO of Kiaos Marketing.

The search business contributes to 70% of Google's ad revenues, and is being challenged by retail-related search moving towards retail focused properties, like Amazon, Walmart etc. To make matters worse, hyperlocal search is moving towards platforms such as Tiktok. This is reflected in the revenue trends of Google’s search business which has slowed down from a 20% in 2018 to a 7% in 2022 (ignoring the abnormal 2021, pandemic year where the search business grew by 43%), explains Gupta.

Besides, Google’s network business contributes about 15% of its revenue and has been in the center of controversy with the privacy advocates. With the deprecation of cookies planned for 2024 and this revenue stream is expected to be hit negatively.  Apple introducing App Tracking Transparency in April 2021 has shown us the impact of cookie deprecation by slowing down this growth of the Google Network business to 3% in 2022 from a 15% in 2018 (again ignoring the abnormal 2021, Pandemic year where the search business grew by 37%), he noted.

In the US, Amazon already commanded 14.6% of the digital ad market, third to Google at 26.4% and Facebook at 24.1% in FY22, according to Insider Intelligence.

Experts say that Amazon, and the other retail networks with privacy complaint deterministic purchase data on its transactors, are best positioned to cater to this demand in the post-cookie world.

“Looking at Google's Q1 2023 financials the only two business lines growing are the Search and Cloud businesses, so it has become important for them to defend their position in the market, and hence an aggressive stance,” Gupta explained.

Google is being outpaced by Amazon in both the product search market and the cloud computing market. Amazon owns the product search market, with 3/4 of online shoppers starting their product search on the platform. Meanwhile, Amazon's AWS garners 33% of the global cloud computing spend, versus Google's 9% market share, a digital advertising expert said.