The Supreme Court has decided to list on 10 October 2023 the appeal filed by tech giant Google challenging the order passed by the National Company Law Appellate Tribunal (NCLAT) dated 29.03.2023. The Competition Commission of India (CCI) imposed a fine of Rs 1337.76 crore on Google. Google was fined for abusing its dominant position in the Android OS app store market.
A bench comprising Chief Justice DY Chandrachud, Justice PS Narasimha and Justice Manoj Mishra had stated at the outset that the bench needed more time to prepare for hearing the case. Senior advocate Harish Salve suggested that the bench should list the matter for final disposal in September or October. Considering the proposal, Chief Justice DY Chandrachud said-
“We will keep it for final decision on 10th October 2023. Counsels will file briefs to be delivered. They should also hand over the issues raised by October 3, 2023. The parties should prepare soft copies of the compilation at their convenience. Mr. Samar Bansal will be the Nodal Counsel.”
Google LLC (formerly Google Inc.) is a Delaware limited liability company and a wholly owned subsidiary of Alphabet Inc. Google provides various information technology related services and internet search service. Google’s core business activities are Chrome, Gmail, Google Drive, Google Maps, Android, Google Play, Search and YouTube. Google India Private Limited (Google India) is an indirect subsidiary of Google LLC.
Smartphones require an operating system to run applications and programs. One such mobile operating system, Android, was acquired by Google in 2005. Consumers of Android-based smart phones filed a complaint against Google LLC and Google India under Section 19(1)(a) of the Competition Act, 2002. Google’s dominant position in mobile operating system markets.
Competition Commission of India (CCI) while disposing of the complaint in Mr. Umar Javed & Ors. v Google LLC & Anr., Case No. 39 of 2018, examined Google’s Android mobile operating system and proprietary mobile applications such as Play Store, Google Search, Google Chrome, YouTube, etc.
It was observed that Google controls the Android OS and licenses its other proprietary applications. Original Equipment Manufacturers (OEMs) use this OS & Google’s apps on their smart mobile devices. Google enters into multiple agreements to govern their rights and obligations. Mobile Application Distribution Agreement (MADA), Anti-Fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA) etc.
The CCI observed that the mandatory pre-installation of the entire Google Mobile Suite (GMS) under MADA, with no option to uninstall, imposed unfair conditions on major device manufacturers. Thus, Google has violated Section 4(2)(a)(i) of the Competition Act. The CCI concluded that Google maintained its dominant position in the online search market, leading to the denial of market access to competing search apps. Additionally, Google abused its dominant position in the Android OS app store market to protect its position in online public search.
In January 2023, Google filed an appeal before the NCLAT, challenging the order dated 20.10.2022 passed by the CCI and imposing a penalty of Rs. 1337.76 crore on Google.
On 29.03.2023, the NCLAT bench dismissed Google’s appeal and upheld the fine of Rs.2000. 1337.76 crore was imposed on Google. The bench observed that the CCI’s inquiry into Google’s conduct was not violative of principles of natural justice.
However, the NCLAT set aside some of the CCI’s recommendations, which are as follows:
1. Google will not deny access to its Play Services APIs to OEMs, app developers, and existing or potential competitors. This will ensure interoperability of apps between Android OS that meet the compatibility requirements of Google and Android forks. With this solution, app developers can easily port their apps to Android forks.
2. Google does not control user uninstallation of pre-installed apps.
3. Google will allow developers of app stores to distribute their app stores through the Play Store.
4. Google does not in any way restrict the ability of app developers to distribute apps via side loading.
Case Name: Google LLC, Anr. v. Competition Commission of India and Ors. CA No. 4098/2023