News & Analysis

Google Loses Again at NCLAT

The national company law appellate tribunal has upheld the fines worth Rs.1337 crore that India's antitrust body CCI had imposed for misusing its Android ecosystem

Google’s hegemony over the Android ecosystem and its misuse got a rap from the Indian courts as the National Company Law Appellate Tribunal or NCLAT upheld an earlier ruling by the antitrust body. This means, the internet search giant will need to fork out Rs.1,337 crore as fine imposed by the Competition Commission of India (CCI). 

In its ruling delivered on Wednesday, the NCLAT said the competition watchdog’s findings into the nature of its conduct using the Android ecosystem was accurate and did not suffer from bias or violate any principles of natural justice. However, the body did provide some relief to Google by setting aside four out of the 10 directives the CCI had imposed. 

Of course, Google isn’t happy as is its wont and told the media that it was studying the order and would be reviewing further legal options, if any. On its part, the NCLAT removed the directive that Google would henceforth require to allow hosting of third-party app stores inside its own PlayStore. 

Appellate authority gives some relief to Google

The NCLAT bench was headed by chairperson Ashok Bhushan and member (technical) Alok Srivastava. The CCI had in its October 20, 2022 order, directed Google to deposit the penalty within ten days after adjusting for the 10% already deposited under a January 4, 2022 order. Now, the appellate body has given Google 30 days to implement it and also take remedial measures as directed by the CCI, barring the four it struck down. 

The directives that were struck down included one relating to access to its Play services API that was perceived as a disadvantage to equipment manufacturers, app developers and possible competitors. Another one related to allowing developers of application stores to distribute them through PlayStores. NCLAT described these as unsustainable. 

“When the commission itself found Google had not abused its dominant position in Play Store market by imposing unfair and discriminatory terms and conditions on app developers, there was no occasion to direct Google to distribute the app store of third-party app developers, without accepting the terms and conditions of Google,” the appellate tribunal said. 

The NCLAT also set aside the regulator’s directive to Google asking it to not restrict the ability of app developers in any manner to distribute their creations through sideloading. The order said Google has already confirmed that there were no restrictions on sideloading and there was only an appropriate warning about the risk to users. Hence, the CCI directive was unnecessary. 

The ruling also said that when pre-installed apps were the choice of the original equipment makers and they were not obliged to pre-install the whole set of applications, the directive of the CCI again appears to be unwarranted. 

Readers would recall that the Supreme Court had struck down Google’s demand for a stay on the case while allowing a week’s extension after January 19, 2023, for making the changes as directed by the CCI. It had also asked the appellate authority to decide on the appeal by March 31, 2023. Meanwhile, Google had made sweeping changes to Android in India that included allowing device makers to license individual apps for pre-installation. 

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