NCLAT upholds Rs 1,337.76 crore fine imposed on Google by CCI

NCLAT's two-member bench, consisting of Chairperson Justice Ashok Bhushan and Dr Alok Srivastava, Member (Technical), found that the investigation conducted by CCI into Google's conduct was not in violation of principles of natural justice and directed Google to implement the directions and deposit the amount in 30 days

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NCLAT upholds Rs 1,337.76 crore fine imposed on Google by CCI

The National Company Law Appellate Tribunal (NCLAT) has rejected Google's appeal against a Competition Commission of India (CCI) order imposing a Rs 1337.76 crore penalty for allegedly abusing its dominant position in the Android mobile ecosystem. 

A two-member bench, comprising of Chairperson Justice Ashok Bhushan and Member Alok Shrivastava of the NCLAT, had today rejected Google's plea that there was a violation of natural justice by the Competition Commission of India (CCI) in the probe. 

The two-member bench also directed Google to implement the direction and deposit the amount in 30 days.

Earlier in October, 2022, CCI had slapped a penalty of Rs 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices and had ordered the internet major to cease and desist from various unfair business practices.

As per Senior Advocate Arun Kathpalia, who was appearing for Google, CCI's order suffered from confirmation bias and is based on a similar order of the European Commission (EC) in 2018 - wherein it was stated that the company's agreements do not prevent equipment manufacturers from pre-installing competing apps with similar functionality.

Further, he also refuted the CCI finding that Google reduced the ability and incentive for manufacturers to develop and sell devices operating on alternative versions of Android by making pre-installation of Google's apps mandatory.

Additionally, he also stated that having mere dominance in a market does not mean abuse of dominance, and the reason Google is popular among users is because of its effectiveness. 

Speaking against Google during the hearing was Additional Solicitor General (ASG) N Venkataraman - who had also presented the CCI's case before the NCLAT.

As per Venkataraman, Google's policies in India can be summed up in five phrases: digital feudalism, digital slavery, technological captivity, chokepoint capitalism and consumer exploitation.

In his arguments, he pointed out that the companies which did not sign Google's contracts have gone extinct and that NCLAT was told that all these agreements are linked to one another, and cannot be signed independently.

It was stated that Google abused its dominant position in the Android Operating System (OS) market to indulge in unfair trade practices by restricting entry of other applications in its Play Store.

Furthermore, the ASG also put forth that Google currently controls nearly 98% of the smartphone market in the country, and that if it is found to be violating competition laws, the regulator is duty bound to direct the company to mend its ways.

Google CCI NCLAT unfair trade practices Android ecosystem appellate tribunal abuse of dominance