CCI Order ‘Unfair Imposition’, Not Restricting Rivals

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Pre-installing apps on smartphones does not translate into dominance: Google at NCLAT hearing

There is huge competition within the Android ecosystem: Google to NCLAT over CCI order

Google challenged the CCI penalty of INR 1,337.76 Cr over alleged abuse of dominance within the Android ecosystem

Tech major Google said the INR 1,337.76 Cr penalty imposed by the Competition Commission of India (CCI) was an ‘unfair imposition’ in its submission to the National Company Law Appellate Tribunal (NCLAT). It further denied restricting smartphone companies from installing other apps, including those of rivals.

NCLAT was hearing the matter on Friday (February 18) when Google challenged the CCI penalty of INR 1,337.76 Cr over alleged abuse of dominance across various verticals within the Android devices ecosystem.

A two-member NCLAT bench headed by chairperson Justice Ashok Bhusan on Friday listed the matter for day-to-day hearing from February 23. The bench also consists of Dr Alok Srivastava, a technical member of the appellate tribunal.

While arguing its matter before the tribunal, Google said the placement of its apps on devices through pre-installation under the Mobile Application Distribution Agreement (MADA) signed with original equipment manufacturers (OEMs) is not ‘unfair’.

The tech major added that there were no restrictions on OEMs to prevent them from installing other apps and enough space is available for them. Incidentally, MADA mandates OEMs to have Google Mobile Suite (GMS) apps while installing the Android OS. The GMS apps, including the likes of Gmail, Google Search and YouTube, can’t be uninstalled from an Android device.

Senior advocate Arun Kathpalia, representing Google at the hearing, said pre-installing apps does not translate into dominance. He added that OEMs are also happy with GMS as these apps make their products more sellable.

Kathpadia added, “Where is the harm to the OEM and users in this?”, adding that CCI’s order reflected ‘unfairness’. The tech major also said that it does not charge any royalty and it does not have a closed system like Apple. 

“There is huge competition within the Android ecosystem,” Google’s counsel added.

Last October, the competition watchdog imposed a fine of INR 1.337.76 Cr on the tech major for anti-competitive practices and alleged abuse of dominance within the Android mobile devices ecosystem. 

The CCI also ordered the tech giant to cease and desist from various unfair business practices, including pre-installing apps on smartphones and tablets and not allowing users to uninstall GMS apps.

Last month, the Alphabet-owned tech giant suffered a setback as NCLAT directed it to pay 10% of the penalty amount imposed by the CCI. The appellate tribunal declined to stay the order and put the matter on a final hearing on April 3, 2023. 

However, Google challenged NCLAT’s decision in the Supreme Court, which also declined to stay the CCI order. The apex court then directed the appellate tribunal to sort out the matter latest by March 31. 

Google is also fighting a separate appeal on a separate CCI penalty worth INR 936.44 Cr before NCLAT

The tech major has openly criticised the competition watchdog over the penalties, calling CCI’s stance a blow to digital adoption in India. Google has also called the directives issued by CCI in the October 2022 order as undermining the security of Android devices in India and also making them more expensive.

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