CCI to Supreme Court: Google's Actions are Feudalistic, follows Contrary Standards for India and Europe

CCI to Supreme Court: Google's Actions are Feudalistic, follows Contrary Standards for India and Europe

The Supreme Court refused to interfere with the order of the National Company Law Appellate Tribunal (in short NCLAT) which refused to grant interim relief on the order passed by the Competition Commission of India (in short CCI) which penalised Google India amounting to Rs. 1,338 crore for abuse of dominance in relation to Android eco-system.

However, the Apex Court directed the NCLAT to dispose of the appeal filed by Google by 31 March, 2023.

The matter was heard by three judges bench comprising of Chief Justice of India DY Chandrachud and Justices PS Narasimha and JB Pardiwala.

Additional Solicitor General of India (in short ASG) N. Venkataraman appeared for the CCI. He submitted that CCI had relied upon similar order passed by the European Commission (in short EU). The EU in 2018, had passed an order against the US Tech giant bound by which the Google accepted the order and implemented the directions, openly adapting to all the changes.

However, the same ideology was not practiced in India and different approaches were taken by the Google before the CCI.

ASG argued, "they are talking about security. So, when you do this in Europe, you have no security threat. But in India you have threats? This is indicative of a continued market slavery. It is feudalistic. In Europe they say we will give it for free. Here, they charge us. It is irreversible in Europe." ASG Venkatraman also submitted before the court data which showed marketplace dominance of Google. He stated that such dominance and its abuse had resulted in a "status-quo bias."

He further submitted that contrary to what Dr Singhvi had submitted for Google, Mobile Application Distribution Agreement (MADA) was not free, voluntary, and non-exclusive. Stating that the commercial reality was quite different, he said– "while OEM is not obligated to pre download Google apps, lack of these apps reduces the marketability of the devices. Most users expect it in devices. To have the apps, OEM must sign a MADA and agree for pre-downloading the apps. They have no meaningful choice but to sign MADA. Google Play services, which are very important for OEMs, cannot be downloaded by users independently."

Senior Advocate AM Singhvi, appearing for Google, submitted that the CCI had no right to dictate how Google carried out its business. He stated that if consumers chose Google, it did not establish abuse of dominance. Instead, it just displayed "excellence" and that such excellence was encouraged.

Further, Dr Singhvi contended that the CCI had given its orders without any finding of abuse of dominance in the order. He submitted, "the direction is that a rival Play Store owner should be able to sit inside my play store. Can CCI give a direction like that? User safety- I cannot control. It is like saying that any trespasser can come and sit in your house. How do I ensure safety, prevent malware? Application Program Interface (in short API) – it is the software proprietary owned by me. My software shall be supplied to others as per the directions...Users can sideload. All that is required is that there is a pop-up warning. Direction says you cannot have pop up warning. Direction says you cannot have pop up warning. So, no warning can be given to user about any malware. Finally, OEMs decide that Google is one of the apps. If user decides to uninstall, it cannot be. Direction is that there shall be no restriction on uninstalling."

He submitted that it had been argued by the CCI that majority of directions issued by the CCI were subject matter of EU directions which had already been complied with by Google in Europe. He stated that this was factually and legally wrong and that 90% of directions given by CCI were not given by the EU. He also submitted that the European legislation of Digital Marketing Act (in short DMA) was not applicable in India and was wholly irrelevant.

Since the appeal is still pending the bench refrained from commenting on the merits of the matter. Yet the bench also observed that the findings of the CCI cannot be regarded as contrary to weight of record at interlocutory stage.

"We affirm the order of NCLAT declining interim relief though for the reasons given above.... Since appellants were pursuing interlocutory remedies before NCLAT before and this court now, the compliance with the order of CCI is extended by further period of one week", the bench further observed in the order disposing of Google's petition.