Google Is Not Just Dominant But 'super Dominant', CCI Tells NCLAT

The Competition Commission of India (CCI) on Wednesday told the National Company Law Appellate Tribunal (NCLAT) that Google is not just a ‘dominant’ undertaking but a ‘super dominant' one.

Defending the October 20, 2022 CCI ruling that penalised the tech giant Rs 1,337.76 crore for practices related to Android devices, Additional Solicitor General (ASG) N Venkataraman, appearing for CCI, argued that the order is based on sound economic principles governing business efficacies and accounts for technological aspects.

The ASG referred to economic principles such as entry barriers, market foreclosure, cross side network effects, cross-market data advantage, dynamic leveraging, cross-subsidization, status quo bias, unfair bargaining power and choke point capitalism to negate Google’s submission that CCI’s order is unreasonable.

Google had earlier been given three months, till January 19, to comply with the CCI order. The tech giant then moved NCLAT on December 22, 2022, and on January 4, the appellate tribunal asked it to pay 10 per cent of Rs 1,337.76 within three weeks and posted the matter for hearing on April 3. Seeking relief, Google then moved the apex court.

After the SC refused to grant Google interim relief on January 19, the matter was sent back to NCLAT for the final order.

To determine the dominance of a market player, the ASG argued that the guiding principles prescribed by the Competition Act must be evaluated instead of any subjective test and Google undoubtedly passes the threshold for a “dominant” status under the law.

“Nevertheless, Google conceded to being dominant before the Supreme Court. Surprisingly, contradicting itself, Google’s counsel contended that the firm is disputing its dominant status before the NCLAT,” the ASG pointed out.

Citing judgments of the Supreme Court of India and other foreign jurisdictions concerning Google, the CCI argued that competition law casts a mandatory obligation on Google to not abuse its dominant position and confers a special responsibility on it not to allow its conduct to impair genuine undistorted competition. An abuse by Google must therefore be dealt with iron hands, the ASG said.

He also stressed that wherever Parliament wanted CCI to factor “Appreciable Adverse Effect on Competition”, it has provided so explicitly and Google’s attempt to read this test in Section 4 of the competition law which proscribe abuse of dominant position, will compromise the sanctity of the Competition Act.

“Google, through a web of agreements such as MADA (Mobile Application Distribution Agreement), RSA (Responsive Search Ads), AFA (Anti-fragmentation Agreement) and ACC, imposes unfair and discriminatory conditions. Even though, under law, the effect of imposing unfair and discriminatory conditions is not required to prove abuse of dominance, CCI in this case has nevertheless proved the shocking impact Google has created in the market through these agreements,” he argued.

“Google has limited and restricted technological and scientific development to the prejudice of users in the market as it prevents production of Android Forks to compete effectively with Google’s Android OS,” he said and reiterated that Google’s proprietary applications are not permitted on Android Forks. Without these applications, commercial death is the only available option for an OEM.

ASG also argued that Google abused its dominant position through MADA/AFA/ACC/RSA as they are practices which result in denial of market access. “The contention of Google that denial of market access must result in total exclusion of any other player was negated by the ASG on the ground that it was yet another condition read into the Competition Act, which was otherwise not prescribed by the Parliament. Mere denial of market access in whatever manner by Google will trigger the contours of Section 4,” he said.

Closing his arguments on the contours of the Competition Act, the ASG referred to Section 4(2)(e) of the Act to argue that Google abused its dominance by using its clout in one market to enter into or protect the other relevant market. He added his earlier submissions on how Google bundles all its 11 core applications and ties Play Store with Search, Chrome and YouTube support his contention that Google abuses its dominant position.

With the ASG concluding his submissions for the day, the Appellate Tribunal will continue with the arguments on Thursday.