Android system case: SC to hear Google, CCI appeals on Oct 10
Figures provided by CCI showed that in 2018, Google was the operating system used in over 98% of smartphones, while its App store for Android smartphones had 100% dominance due to pre-installation
The Supreme Court on Friday set October 10 as the day to begin arguments in a legal battle between Google and India’s antitrust regulator Competition Commission of India (CCI) after the National Company Law Appellate Tribunal (NCLAT) in March upheld key findings of the Commission against the tech giant for abusing its dominant position in the Android ecosystem including a penalty of over ₹1337 crore.
Filing cross-appeals against the March 29 NCLAT order in the top court, Google questioned the tribunal’s finding upholding 6 out of the 10 non-monetary directions issued by CCI on October 20 claiming that there was no evidence of abuse.
At the same time, CCI challenged the four conditions on which the tribunal gave relief to Google seeking reconsideration of the order.
A bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud issued a notice on the two appeals seeking response from both CCI and Google.
Senior advocate Harish Salve, representing the tech giant, suggested having the matter come up on any specific day in September or October. For CCI, additional solicitor general (ASG) N Venkatraman appeared in Court.
The bench, also comprising justices PS Narasimha and Manoj Misra, directed the matter to come up on October 10. The Court even directed the two sides to prepare common digital compilations for the reference of the Court and appointed advocate Sameer Bansal as the nodal counsel to interact with both sides for preparing the set of digital files by October 3.
In its appeal before the top court, Google said, “In upholding the Commission’s findings, the Tribunal has committed a grave error in law where, without any evidence of abuse and based only on Google’s alleged market power, it has been directed to discontinue its procompetitive practices.”
The tech giant was accused of abusing its monopoly in the Android ecosystem by imposing unfair conditions on mobile device manufacturers in pre-installing a bouquet of Google apps. This was achieved through a host of agreements signed between Google and original equipment manufacturers although Google claimed it was not mandatory. The tribunal also agreed with the Commission that by getting favourable display on the device home screen, Google got an unfair advantage over other rival apps.
Google said that the findings have far reaching consequences on the Indian mobile ecosystem. It said that the Commission cannot use the provisions of the Competitions Act, 2002 to shape market structures through policy by ignoring consumer benefits, its possible effects and lack of evidence of abuse.
Stating the pitfalls in the tribunal’s order, the appeal said that the commission’s investigation lacked evidence and economic data and the reams of data and evidence submitted by Google to show that its agreements were incapable of foreclosing rivals had not been considered.
“The tribunal erroneously relied on Google’s alleged market power to suggest that high market shares themselves demonstrate effects,” Google said, while adding that evidence of dominance (i.e. high market share) cannot be equated with evidence of anti-competitive effects as required under the Competition Act.
It categorically stated that its agreement with device manufacturers does not prevent them from signing similar deals with competing apps. “The point is about consumer choice and that the user has the choice to get rid of these apps not just from the device home page but from being used on the device,” the appeal said.
The CCI, in its appeal, challenged the tribunal’s order for exempting its conditions that required Google to allow uninstalling of its pre-installed apps on Android devices. The CCI claimed that these pre-installed apps could only be disabled. Among the other relief given by the tribunal, the Commission’s directive allowing rival app store developers to distribute their app via Google Play Store was also set aside.
Figures provided by CCI showed that in 2018, Google was the operating system used in over 98% of smartphones, while its App store for Android smartphones had 100% dominance due to pre-installation.
In the general web search, Google has had 98% dominance in India since 2009, and in the online video hosting platform, Google-run YouTube had 88% coverage.
CCI extensively relied on the investigations conducted against Google to justify each of its directions. It further pointed out that the global tech firm has complied with similar directions passed by the European Commission (EC).
Google in its appeal said, “The Tribunal/CCI chose to follow the path taken by the EC without examining either the difference in the laws and more significantly, without even examining the difference in the implications of a trade practice upon competition within the country. The structure of the industry in India, its stage of development, and the implications of a trade practice may be benign or even beneficial to trade in India but may be considered as anti-competitive outside India and vice versa.”
It termed the imposition of ₹1337.76 crore penalty as “disproportionate” and “excessive” that was based on Google’s total revenue from its entire business in India and not the “relevant turnover” arising from revenue generated out of Android operating system based mobile phones.
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