Google approaches Supreme Court against NCLAT order upholding Rs.1,338 crore anti-trust penalty

Google approaches Supreme Court against NCLAT order upholding Rs.1,338 crore anti-trust penalty

Earlier, CCI had also challenged the appellate tribunal’s order in the apex court

Technology giant Google has filed an appeal before the Supreme Court, challenging the National Company Law Appellate Tribunal (NCLAT) order upholding Rs.1,338 crore penalty for anti-trust violations.

The statement of Google’s spokesperson read, "We filed an appeal in the Supreme Court regarding the NCLAT’s decision in the Android case. The NCLAT correctly found that harm from anti-competitive behaviour needs to be proven, but did not apply this requirement to several of the CCI’s directions that it upheld. We look forward to presenting our case before the Supreme Court and demonstrating how Android has benefitted Indian users, developers, and OEMs, and powered India’s digital transformation."

In March 2023, the NCLAT had partially upheld the Competition Commission of India’s (CCI) abuse of Android dominance order against Google. The tribunal upheld the penalty of Rs.1,338 crore imposed by CCI.

The anti-trust appellate tribunal held that the CCI's order did not suffer from any confirmation bias. Furthermore, the NCLAT held that Google asking the Original Equipment Manufacturers (OEMs) to pre-install the entire Google Suite of 11 applications amounted to imposition of unfair conditions.

NCLAT held that Google reduces the incentive of the OEMs to develop their own version of Android (Android forks) by imposing conditions through its Anti Fragmentation Agreement (AFA). It bars OEMs from developing and distributing Android forks.

However, the tribunal set aside four key directions issued to Google by the CCI:

• Google was fair in sending warnings (sideloading) to users when they download applications directly from the website or from an unknown source.

• Google need not share its proprietary Application Program Interface (API) with third parties.

• Google was right in not permitting third-party application stores on its Play Store to avoid malware.

• Google can restrict the uninstallation of Google Suite apps on Android phones

Meanwhile, earlier, even the CCI had challenged the order of the NCLAT in the Top Court.

In 2018, Android users moved the competition watchdog alleging that Google was abusing its dominant position in the mobile operating system-related market in contravention of the provisions of the Competition Act, 2002. They alleged that the US tech giant's demand was unfair that device manufacturers must preinstall the entire Google Mobile Services (GMS) suite under its Mobile Application Distribution Agreement (MADA).

Subsequently, the CCI ordered an investigation by its director general (DG).

In 2019, the CCI expressed a prima facie opinion that mandatory pre-installation of the entire GMS suite amounted to the imposition of unfair conditions on device manufacturers.

On 20 October 2022, based on the DG’s report and other documents filed by both sides, the Commission concluded that Google was abusing its dominant position in multiple markets in the Android mobile device ecosystem. It asked Google to cease-and-desist from its practices and pay a penalty of Rs. 1,338 crore.

It held that Google could neither force OEMs of smart devices to preinstall its apps, nor restrict users from uninstalling such apps. It also asked the US major not to offer any incentives to OEMs to comply with its conditions.

Thereafter, early this year, Google moved the NCLAT, but failed to get an immediate relief.

The company then approached the Top Court against the tribunal's decision. However, the court refused to intervene. It asked NCLAT to look into the matter.