Google Loses Appeal Against Competition Regulator

The National Company Law Appellate Tribunal delivered the verdict in Google LLC's anti-competitive policies case on Wednesday, upholding the competition regulator's order with certain modifications.

"Pre-installation of (the) entire Google Mobile System suite amounts to an abuse of dominant position," the NCLAT said. The appellate tribunal also refused to accept Google's submission that the Director General's investigation was replete with confirmation bias. The investigation did not violate the principles of natural justice, it said.

Google must pay for abusing its dominant position, the NCLAT has held. In saying so, the appellate tribunal has validated the Competition Commission of India's stance that the tech major's practices in the android market were anti-competitive. The Rs 1,337-crore penalty against Google has also been upheld by the appellate tribunal.

The NCLAT has largely upheld the CCI's directions. Four out of the 10 in the regulator's October order have been omitted. These are:

• The CCI had said that Google shall not deny access to its Play Services APIs to disadvantage original equipment manufacturers. OEMs, app developers and its existing or potential competitors. This would've ensured interoperability of apps between Android OS, which complies with compatibility requirements of Google and Android Forks.

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

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

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

To reiterate, these four directions by the regulator have been set aside by the NCLAT.

Last year, the CCI had found Google guilty of abusing its dominance in the Android mobile device ecosystem and online search market. The regulator had imposed a penalty of Rs 1,377 crore on the global tech giant and also directed to cease and desist from indulging in anti-competitive behavior.

According to the commission’s order, Google had to comply with the following directions:

• Original equipment manufacturers or OEMs can choose from Google’s proprietary applications to be pre-installed. They should not be forced to pre-install a bouquet of applications and can decide the placement of pre-installed apps on their smart devices.

• Licensing of Play Store shall not be linked with the requirement of pre-installing Google search services, Chrome browser, YouTube, Google Maps, Gmail or any other application of Google.

• Google shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors.

• It cannot offer any monetary, other incentives to OEMs for ensuring exclusivity for its search services.

• Google shall not impose anti-fragmentation obligations on OEMs.

This prompted Google to approach the NCLAT. In its appeal, Google had claimed that the regulator's findings were "patently erroneous" and that the orders were issued without sufficient thought and were directly copied from the orders of the European Commission.

When Google was denied any interim relief against the CCI's directions, which had to be implemented by Jan. 19, the tech major approached the Supreme Court.

In January, the apex court too refused to grant a stay on the CCI's directions. The court was of the opinion that any expression on the merits of the case will affect the proceedings which were pending before the NCLAT. The top court had directed the NCLAT to dispose of the case by March 31.