Google has been directed by the National Company Law Appellate Tribunal (NCLAT) to deposit the Rs 1,337 crore penalty in 30 days that the Competition Commission of India (CCI) imposed on the tech giant, alleging abuse of dominant market position by Google in the Android ecosystem.

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The NCLAT bench comprising Chairperson Justice Ashok Bhushan and Member Alok Shrivastava also made some modifications to the CCI order passed on October 20, 2022.

The body has held that Google forcing original equipment manufacturers (OEMs) to pre-install apps is an abuse of its dominant position. It has also held that there was no violation of the principles of natural justice, and the lack of a judicial member did not affect the CCI's decision.

However, the NCLAT has allowed marginal relief to Google by striking down four directions from the overall CCI order.

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The NCLAT has struck down the CCI direction requiring Google to allow access to its Play Store API, the CCI direction requiring Google to allow the uninstallation of pre-installed apps, the CCI direction mandating Google to allow other app stores on the Play Store, and the CCI direction to Google requiring it to allow side-loading of apps by other app developers.

On the other hand, the NCLAT has upheld six CCI directions against Google. It has held that Google can't force OEMs to pre-install an entire suite of apps, position apps in a certain way, license the Play Store to OEMs linked to pre-installation of Chrome, Search, Maps, Youtube, or any other app, pay OEMs to maintain exclusivity of its search services, impose anti-fragmentation obligations on OEMs, or obligate OEMs not to sell smart devices based on Android forks. Additionally, Google must allow users to choose their default search engine during initial device setup.

On October 20 last year, the Competition Commission of India (CCI) slapped a penalty of Rs 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. The regulator had also ordered the internet major to cease and desist from various unfair business practices.

This ruling was challenged before the NCLAT, which is an appellate authority over the orders passed by the CCI.

Also Read: Google to update Android and Play Store in India in line with CCI orders

Google in its petition had contended the investigation carried against it by the CCI was "tainted", contending that the two informants on whose complaint the fair trade regulator initiated the enquiry were working at the same office that was investigating the tech major.

According to Google's plea, the CCI failed to conduct an "impartial, balanced, and legally sound investigation" while ignoring evidence from Indian users, app developers, and OEMs.

Challenging the CCI order, Google said the findings are "patently erroneous and ignore" the reality of competition in India, Google's pro-competitive business model, and the benefits created for all stakeholders.

Google claimed the DG copy-pasted extensively from a European Commission decision, deploying evidence from Europe that was not examined in India or even on the Commission's file. CCI, during the course of the hearing, alleged that Google has created a digital data hegemony and called for a market space with "free, fair and open competition".

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The abuse of dominance by Google stands proved in every criterion laid under Section 4 of the Competition Act in terms of mandatory pre-installation, premier placement and bundling of core apps. Such practices result in the imposition of unfair conditions and supplementary obligations, he said.

On January 4, a separate bench of the NCLAT issued a notice over Google's plea, directing it to pay 10 percent of the Rs 1,337 crore penalty imposed by the CCI. It had declined to stay the CCI order and put the matter for a final hearing on April 3, 2023.

This was challenged by Google before the Supreme Court, which also declined to stay the CCI order but directed the NCLAT to decide on Google's appeal by March 31.

The NCLAT order is expected to have significant implications for tech companies operating in India. The decision is likely to create a precedent for how dominant players in tech markets operate and how they engage with OEMs and app developers.

Also Read: US sues Google for using anti-competitive tactics in the online ad market for 15 years

(With PTI Inputs)

First Published:Mar 29, 2023 2:43 PM IST