Google moves NCLAT against CCI’s penalty

Tech giant Google Inc has approached the National Company Law Appellate Tribunal (NCLAT), challenging an order passed by the competition watchdog in October on unfair business practices in the Android ecosystem and Play Store by the US-based global company.

Google has said the CCI's order against it was a "setback" for Indian users and businesses, and that it will seek a stay on the order. The Competition Commission of India (CCI) had slapped two penalties worth ₹1,337.76 crore and ₹936.44 crore on Google for anti-competitive practices in its Play Store policies as well as Android Mobile ecosystem.

“We have decided to appeal the CCI’s decision on Android as we believe it presents a major setback for our Indian users and businesses who trust Android’s security features, and potentially raises the cost of mobile devices. We look forward to making our case in NCLAT and remain committed to users and partners,” a Google spokesperson added, as reported by a news agency.

The CCI’s order had said it examined various Google practices regarding licensing of its Android mobile operating system and proprietary mobile apps like Play Store, Google Search, Google Chrome, and YouTube, among others.

The mandatory pre-installation of the entire Google Mobile Suite under the mobile application distribution agreement, with no option to uninstall the same and their prominent placement, amounts to imposition of an "unfair condition" on the device manufacturers, it said.

The competition regulator accused Google of perpetuating and leveraging its dominant position in the online search and app store market, resulting in a denial of market access for competing search apps and protecting its position in online general search.

In its other order, the CCI said Google abused its dominant position with regard to its Play Store policies and had issued a cease-and-desist order against the company.

The CCI had stated that it found "glaring inconsistencies and wide disclaimers" in revenue data points presented by Google. "In the interest of justice and with an intent of ensuring necessary market correction at the earliest, the CCI quantified the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the CCI imposed a penalty @ 7% of its average relevant turnover amounting to ₹936.44 crore upon Google on a provisional basis, for violating Section 4 of the Act."

The CCI order said Google’s Play Store policies require the app developers to "exclusively and mandatorily" use Google Play's Billing System (GPBS). App developers can't, within an app, provide users with a direct link to a webpage containing an alternative payment method or use language that encourages a user to purchase the digital item outside of the app, it said.

If the app developers do not comply with Google’s policy of using GPBS, they are not permitted to list their apps on the Play Store, the CCI order said, adding that Google is dominant in the licensable OS markets for smart mobile devices and app stores for Android smart mobile OS, in India.