Google v CCI | Supreme Court Lists Matter For Final Disposal On October 10, 2023

At the outset, the bench comprising CJI DY Chandrachud, Justice PS Narasimha, and Justice Manoj Misra stated that the bench needed more time to prepare to hear the matter. To this, Senior Advocate Harish Salve suggested that the bench list the matter for final disposal in September or October. Taking the suggestion into consideration, CJI DY Chandrachud said–

"We will keep it for final disposal on October 10, 2023. The counsels shall file brief notes which should be exchanged. They should also exchange issues which will be raised by October 3, 2023. The parties shall prepare soft copies of convenience compilation. Mr Samar Bansal shall be the nodal counsel."

Background

Google LLC (formerly Google Inc.) is a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc. Google provides a variety of information technology related services and an 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.

Smart phones require an operating system to run the applications and programs. Android being one such mobile operating systems, was acquired by Google in 2005. The 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, alleging abuse of dominant position by Google in the mobile Operating System markets.

CCI Verdict

The Competition Commission of India (CCI) while adjudicating the complaint in Mr. Umar Javeed & 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 manages the Android OS and licences its other proprietary applications. The Original Equipment Manufacturers (OEMs) use this OS & Google’s apps in their smart mobile devices. Google enters into multiple agreements to govern their rights and obligations viz. Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA), etc.

The CCI held that mandatory pre-installation of entire Google Mobile Suite (GMS) under MADA, with no option to un-install the same, and their prominent placement amounts to imposition of unfair condition on the device manufacturers. Thus, Google violated Section 4(2)(a)(i) of the Competition Act. The CCI concluded that Google perpetuated its dominant position in the online search market, resulting in denial of market access for competing search apps. Further, Google abused its dominant position in the Android OS app store market, to protect its position in online general search.

In January 2023, Google filed an appeal before the NCLAT, challenging the Order dated 20.10.2022 passed by CCI imposing a penalty of Rs. 1337.76 Crore on Google.

NCLAT Verdict

On 29.03.2023 the NCLAT Bench dismissed the Google’s appeal and upheld the penalty of Rs. 1337.76 Crores imposed on Google. The Bench observed that the CCI’s investigation into Google's conduct was not violative of principles of natural justice.

However, certain directions of the CCI were set aside by the NCLAT, which are as under:

1. Google shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors. This would ensure interoperability of apps between Android OS which complies with compatibility requirements of Google and Android Forks. By virtue of this remedy, the app developers would be able to port their apps easily onto Android forks.

2. Google shall not restrict un-installing of its pre-installed apps by the users.

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

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