NCLAT Upholds CCI’S ₹1,337-CR Fine on Google

The National Company Law Appellate Tribunal (NCLAT) on Wednesday upheld the ₹1,337 crore fine imposed on Google by the Competition Commission of India (CCI) for misusing its dominant position in the Android ecosystem, while giving some relief. It said the competition watchdog’s findings into the search giant’s anticompetitive conduct were correct, did not suffer from any bias or violate the principles of natural justice. However, it set aside four of 10 directives that the CCI imposed on Google to change its business model. Among the reliefs, Google will now not need to allow hosting of third-party app stores inside Play Store as had been previously ordered by the CCI. Google said it was studying the order and reviewing its legal options. The NCLAT bench comprising chairperson Ashok Bhushan and member, technical, Alok Srivastava, upheld the CCI’s October 20 order and asked Google to deposit the penalty after adjusting for the 10% deposited under a January 4 order- within 30 days.

‘A Cautionary Message’

The appellate tribunal also gave Google 30 days to implement the other remedial measures as directed by the CCI except for the four that were set aside by it. Minister of state for electronics and IT Rajeev Chandrasekhar said the ruling was a “cautionary message to all platforms and companies”. The tribunal struck down the CCI’s direction to Google to not deny access to its Play services application programming interface (API) to disadvantage other equipment manufacturers, application developers and its existing or potential competitors. In addition to this, the tribunal struck down another CCI direction to allow the developers of application stores to distribute their app stores through Google’s Play Store. It said these were “unsustainable”.

“When the commission itself found Google had not abused its dominant position in Play Store market by imposing unfair and discriminatory terms and conditions on app developers, there was no occasion to direct Google to distribute the app store of third-party app developers, without accepting the terms and conditions of Google,” the appellate tribunal said in its 189-page judgement. Further, it set aside the competition regulator’s direction to Google not to restrict the ability of app developers, in any manner, to distribute their apps through sideloading. When Google’s case is that there are no restrictions in sideloading and it only displayed an appropriate warning to users about the risk, the direction by the regulator was unnecessary, the NCLAT said.

When pre-installed apps are the choice of original equipment manufacturers (OEMs) and they are not obliged to pre-install the entire bouquet of applications, the directions issued by the CCI appear to be unnecessary, the ruling stated. The Supreme Court had on January 19 turned down the tech giant’s demand for a stay but allowed a week’s extension of the January 19 deadline for making the changes as directed by the CCI. It had also asked the NCLAT to decide Google’s appeal by March 31. Following the Supreme Court order, Google made sweeping changes to Android in India, including allowing device makers to license individual apps for pre-installation and giving users the option to choose their default search engine. S-ET

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