NCLAT Upholds Competition Commission's Rs 1,337 Crore Penalty On Google

The National Company Law Appellate Tribunal (NCLAT) on Wednesday upheld the penalty of Rs 1,337 crore imposed on Google by the Competition Commission of India (CCI). However, it set aside certain directions issued by the commission.

617.3- Google shall not deny acces to its play services Application Programming Interface (APIs) to  disdvantage Original Equipment Manufacturers, app developers and its existing or potential competitors.

617.7- Google shall not restrict uninstalling of its pre-installed apps by the users.

617.9- Google shall allow the developers of app stores to distribute their app stores through Google Play Store.

617.10- Google shall not restrict the ability  of app developers in any manner to distribute their apps through side-loading.

All of these directions have been declared "unsustainable".

It added that the pre-installation of entire Google Mobile Services (GMS) does amount to unfair use.

The CCI had imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing cease and desist order. The CCI also directed Google to modify its conduct within a defined timeline. 

Smart mobile devices need an operating system (OS) to run applications (apps) and programs. Android is one such mobile operating system. In 2005, Google acquired the company, also named Android, which developed this operating system. The first public version of this operating system, Android, was launched in 2008.

The CCI said that "in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.)."

And has found "Google to be dominant in the markets for licensable operating system (OS) for smart mobile devices and market for app stores for Android smart mobile OS, in India". This is certainly a domain for CCI. The regulator has also concluded that potentially "if the app developers do not comply with Google's policy of using Google Play's Billing System (GPBS), they are not permitted to list their apps on the Play Store and thus, would lose out the vast pool of potential customers in the form of Android users".

On January 11, the Supreme Court agreed to examine an appeal by Google against a decision by NCLAT, declining to stay on penalty.

Google moved the apex court after the setback at the NCLAT, which did not stay the CCI order on abuse of dominant position in multiple markets in the Android mobile device ecosystem case. Earlier this month, the NCLAT did not find any urgency to pass an interim order, after noting that Google filed the appeal in December last year, though the CCI passed the order in October. It directed Google to deposit 10 per cent of the fine amount.

The tribunal had said that there was no urgency shown in the filing of the appeal, therefore Google could not be allowed to press for interim relief. In October last year, the CCI had imposed a penalty of Rs 1,337.76 crore on the company for abusing its dominant position in multiple markets in relation to Android mobile devices.

The CCI also imposed a penalty of Rs 936.44 crore on the company for abusing its dominant position with respect to its Play Store policies.

Later on January 17, the Supreme court bench, while hearing the tech giant's plea against the NCLAT order, declined to stay the CCI's decision. The bench asked, "Will Google follow the same approach taken by it in European Union, as regards pre-installed apps in Android-based mobile phones, in India?"

Google had said it was reviewing the apex court's decision to deny interim relief. It said it would co-operate with the CCI's decision.