Google challenges NCLAT verdict upholding CCI fine of Rs 1337.6 crore in Supreme Court

Google has filed an application in the Supreme Court against the March 29 order of the National Company Law Appellate Tribunal (NCLAT) that upheld the Rs 1,337.76 crore penalty imposed on the tech giant by the Competition Commission of India (CCI) for anti-competitive conduct in the Android ecosystem.

A Google spokesperson told the media on Tuesday that the tech giant has filed an appeal against the NCLAT order because the Tribunal, while acceding to the fact that harm for anti-competitive behaviour needed to be proven, did not apply this requirement to several of CCI’s directions which it upheld.

On March 29, the Bench of NCLAT Chairperson Justice Ashok Bhushan and Dr Alok Srivastava, Member (Technical) had set aside the four key directions issued in paragraphs 617.3, 617.9, 617.10, and 617.7 of the CCI order.

The CCI had ruled under Paragraph 617.3 that Google shall not deny access to its play services Application Programming Interface (APIs) to disadvantage the Original Equipment Manufacturers (OEMs), app developers and its existing or potential competitors.

Under Paragraph 617.7, it said Google shall not restrict uninstalling of its pre-installed apps by the users.

Paragraph 617.9 directed Google to allow the developers of app stores to distribute their app stores through Google Play Store.

The CCI order under Paragraph 617.10 told Google not to restrict the ability of app developers in any manner to distribute their apps through side-loading.

The Appellate Tribunal found in its order that the investigation conducted by CCI into Google’s conduct was not in violation of principles of natural justice. It further held that the pre-installation of entire Google Mobile Services (GMS) on Android phones did amount to unfair use.

It said by making pre-installation of GMS suite conditional to signing of AFA/ACC for all Android devices manufacturers, the Appellant had reduced the ability and incentive of devices manufacturers to develop and sell self-device operating or alternative version of Android and Android Forks, thereby limiting the technical and scientific development, which was in breach of provisions of Section 4(2)(b)(ii) of the IT Act.

Apart from the penalty, the CCI had directed Google to cease and desist from participating in anti-competitive practices and directed it to modify its conduct within a defined timeline.

As per the CCI order, the OEMs were not to be forced to pre-install a bouquet of applications, and not to be restrained from deciding the placement of pre-installed apps on their smart devices.

It directed Google not to link the licensing of Play Store to OEMs with the requirement of pre-installing Google search services such as Chrome, YouTube, Google Maps, Gmail or any other app.

The tech giant was also directed not to offer any monetary or other incentives to OEMs for ensuring exclusivity for its search services;

Google was further told not to incentivise or obligate OEMs for not selling smart devices based on Android forks.

The tech major was directed not to restrict the uninstalling of its pre-installed apps by the users, while asking it to allow its users, during the initial device setup, to choose their default search engine for all search entry points. 

The Commission observed that users should have the flexibility to easily set as well as easily change the default settings.

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