The Competition Commission of India ("CCI") had on October 20, 2022, passed an order against Google LLC and Google India Private Limited ("Google") directing Google to refrain from indulging in anti-competitive practices that were found to be in contravention of the provisions of the Competition Act, 2002 ("Competition Act") and also imposed on Google a penalty to the tune of INR 1337.76 Crores.

Google filed an appeal with the National Company Law Appellate Tribunal ("NCLAT") against CCI's order.

Google contended that CCI's order suffered from confirmation bias and that agreements executed with equipment manufacturers did not prevent them from pre-installing competing apps with similar functionality. Google further argued that its popularity was due to its effectiveness and that dominance in the market did not necessarily constitute abuse of dominance.

CCI, on the other hand, contended that Google controlled nearly 98% of the market in India for smartphone apps and was found to be violating competition laws to maintain its dominance in the market. CCI accused Google of unfair trade practices by restricting the entry of other applications in the Google Play Store. CCI summed up Google's policies in India in 5 phrases, namely "digital feudalism," "digital slavery," "technological captivity," "chokepoint capitalism," and "consumer exploitation."

CCI observed that by using its dominant position in the online search market, Google was denying access to competing search engines. It also noted that by making pre-installations of Google's proprietary apps mandatory in an android phone, the incentive and ability of device manufacturers to develop and sell devices operating on alternate versions of android was considerably reduced. Therefore, CCI directed Google to not force Original Equipment Manufacturers ("OEMs") to pre-install a bouquet of applications, not offer any monetary or other incentives to OEMs for ensuring exclusivity for its search services, and not restrict the uninstallation of its pre-installed apps by the users.

After hearing arguments from both sides, the NCLAT, on March 29, 2023, upheld1 CCI's decision and ruled that Google had perpetuated its dominant position in the online search market, resulting in the denial of market access to other competing search apps. The NCLAT, however, deleted certain directions of the CCI in paragraph nos. 617.3, 617.9, 617.10, and 617.7 of CCI's order. NCLAT upheld other directions given by CCI, including the imposition of a fine on Google to the tune of INR 1337.76 Crores.

This NCLAT ruling highlights the ongoing debate surrounding anti-competitive practices and market dominance in the technology industry. Google's dominance in the smartphone apps market in India and its control over the online search market were key factors in this case. The ruling serves as a reminder to tech giants that market dominance comes with a responsibility to operate fairly and to avoid engaging in anti-competitive practices that restrict competition and harm consumers. As the technology industry continues to evolve, it will be essential for companies to operate in a manner that fosters fair competition, innovation, and consumer protection.

Footnote

1. Google LLC and Another v. Competition Commission of India Through its Secretary and Others, 2023 SCC OnLine NCLAT 147.

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