Supreme Court to hear appeals against NCLAT order against Google on July 7
The Supreme Court is scheduled to hear appeals by both Google and the Competition Commission of India (CCI) on July 7. These appeals are in response to the order issued by the National Company Law Appellate Tribunal (NCLAT), which upheld a penalty of Rs 1,338 crore against Google for anti-trust violations.
In March 2023, the NCLAT partially upheld the CCI’s order regarding the abuse of Android dominance by Google. The tribunal affirmed the penalty imposed by the CCI, which amounted to Rs 1,338 crore.
The NCLAT stated that the CCI’s order was not affected by any confirmation bias. Additionally, the tribunal concluded that Google’s practice of requiring original equipment manufacturers (OEMs) to pre-install the entire Google Suite of 11 applications constituted the imposition of unfair conditions.
The Supreme Court‘s hearing of the appeals by Google and the CCI will play a crucial role in determining the outcome of this case. The court will assess the arguments put forth by both parties and make a final decision on the penalty imposed by the CCI for Google’s alleged anti-trust violations.
The outcome of this case will have significant implications for the tech giant and the competition landscape in India. It will provide clarity on the extent to which dominant companies can impose conditions on OEMs and the consequences of any anti-competitive practices.
As the Supreme Court hears the appeals, stakeholders will be closely watching for the final ruling, which will shape the future of competition law enforcement in the digital sector in India.
In its decision, the National Company Law Appellate Tribunal (NCLAT) set aside four key directions issued to Google by the Competition Commission of India (CCI). These directions were challenged by Google and formed part of the appeal before the NCLAT:
1. Google was deemed fair in sending warnings (sideloading) to users when they download applications directly from the website or from an unknown source. The NCLAT acknowledged that such warnings are necessary to protect users from potential risks associated with downloading applications from untrusted sources.
2. Google was not required to share its proprietary application program interface (API) with third parties. The NCLAT recognized that the API forms an integral part of Google’s business and held that Google has the right to restrict access to it.
3. Google was justified in not permitting third-party application stores on its Play Store to prevent the spread of malware. The NCLAT acknowledged the need for security measures to protect users’ devices and data.
4. Google can maintain restrictions on the uninstallation of Google Suite apps on Android phones. The NCLAT recognized that Google Suite apps are integral to the functioning of the Android ecosystem and held that Google has the right to impose certain restrictions to ensure the optimal user experience.
It is important to note that the CCI has also challenged the NCLAT’s order at the Supreme Court. This implies that the Supreme Court will have the opportunity to review and determine the final outcome of the case, considering the arguments presented by both the CCI and Google.
The Supreme Court’s decision will have significant implications for Google’s operations in India and the wider competition landscape in the digital sector. It will provide clarity on the extent of Google’s obligations and the restrictions it can impose in relation to its Android ecosystem.
Stakeholders will be closely monitoring the Supreme Court proceedings, as the outcome will shape the future application of competition law in the digital sector and may set a precedent for similar cases involving dominant tech companies in India.
In 2018, a group of Android users filed a complaint with the Competition Commission of India (CCI) alleging that Google was abusing its dominant position in the mobile operating system-related market. The complaint specifically highlighted Google’s requirement for device manufacturers to preinstall the entire Google Mobile Services (GMS) suite under its Mobile Application Distribution Agreement (MADA), which was considered an unfair condition.
Following the complaint, the CCI initiated an investigation by the director general (DG) of its investigative arm. In 2019, the CCI expressed a prima facie opinion that the mandatory pre-installation of the entire GMS suite under MADA constituted the imposition of unfair conditions on device manufacturers.
On October 20, 2022, based on the DG’s report and other relevant documents, the CCI concluded that Google was indeed abusing its dominant position in multiple markets within the Android mobile device ecosystem. The CCI directed Google to cease and desist from these practices and imposed a penalty of Rs 1,338 crore.
The CCI’s ruling stated that Google cannot compel original equipment manufacturers (OEMs) to preinstall its apps nor restrict users from uninstalling them. The CCI also prohibited Google from offering incentives to OEMs to comply with its conditions.
Subsequently, Google appealed the CCI’s decision to the National Company Law Appellate Tribunal (NCLAT) in January. However, the company did not receive immediate relief. Google then approached the Supreme Court, seeking intervention in the case. The Supreme Court, however, declined to intervene and directed the NCLAT to examine the matter.
The referral of the case back to the National Company Law Appellate Tribunal (NCLAT) by the Supreme Court signifies that the NCLAT will have the responsibility to thoroughly review and assess the appeal filed by Google against the ruling of the Competition Commission of India (CCI). This gives the NCLAT the opportunity to closely examine the legal arguments presented by both Google and the CCI, and ultimately deliver a final verdict on the matter.
The outcome of this legal battle holds significant implications for Google’s operations in India, as it will shape the regulatory framework surrounding competition in the digital sector. The decision will provide guidance on the extent to which dominant tech companies can impose conditions on device manufacturers and users within the Android ecosystem. This will not only impact Google but also other players in the industry, as the ruling could set a precedent for how competition-related issues are addressed and regulated in the Indian market.
Moreover, the case reflects the broader global concerns surrounding the practices of large technology companies and their market dominance. The outcome will be closely watched by regulators, industry stakeholders, and consumer advocates, as it has the potential to influence the approach taken towards regulating dominant tech players in other jurisdictions as well.
Overall, the final determination of the case by the NCLAT will shape the legal landscape surrounding competition and anti-trust issues in the Indian digital sector. It will provide clarity on the boundaries of market dominance and the imposition of conditions by dominant tech companies, thereby impacting the operations and strategies of not just Google but also other companies operating in the digital ecosystem in India.
