'No Manifest Error In CCI Findings Against Google' : Supreme Court Affirms NCLAT Order Refusing To Stay CCI Order In Android Dominance Matter

The Supreme Court on Thursday refused to interfere with the order of the National Company Law Appellate Tribunal which refused to stay the order of the Competition Commission of India (CCI) which imposed a penalty of Rs 1,338 crore on Google India for abuse of dominance in relation to Android eco-system.However, the Court directed the NCLAT to dispose of the appeal filed by Google by March 31, 2023.The Supreme Court noted that NCLAT directed the deposit of 10% penalty without deciding the application for stay. The NCLAT also deferred the hearing of the appeal filed by Google against the CCI to April 2023. In this backdrop, Google approached the Supreme Court.Since the appeal is pending, the Supreme Court bench led by Chief Justice of India DY Chandrachud refrained from commenting on the merits of the matter.The bench also observed that the findings of the CCI "cannot be regarded as contrary to weight of record at interlocutory stage"."Findings by CCI cannot be said to be without jurisdiction or with manifest error", the bench, also comprising Justices PS Narasimha and JB Pardiwala observed."We affirm the order of NCLAT declining interim relief though for the reasons given above....Since appellants were pursuing interlocutory remedies before NCLAT before and this court now, the compliance with the order of CCI is extended by further period of one week", the bench further observed in the order disposing of Google's petition.Senior Advocate Dr. Abhishek Manu Singhvi, appearing for Google, also agreed to undertake the following :a) Google would ensure the unbundling of wholly small (search and chrome from play and chrome from search);b) In terms of the decision of the European Commission in 2018, Google would ensure that search-app pre-installation exclusivity only on portfolio based RSA would not be pursued; c) As regards anti-fragmentation obligations on original equipment manufacturers, Google would ensure allowing smart phone and tablet makers, who license play and search, to distribute incompatible smartphones and tablets. Additional Solicitor General of India N Venkataraman appeared for the CCI.Senior Advocates Mukul Rohatgi, Rajashekhar Rao and Jayant Mehta appeared for intervenors.Submissions made by GoogleSenior Advocate AM Singhvi, appearing for Google, submitted that the CCI had no right to dictate how Google carried out its business. He stated that if consumers chose Google, it did not establish abuse of dominance. Instead, it just displayed "excellence" and that such excellence was encouraged. His submissions can broadly be categorised as follows–1. "Android Ecosystem" and the Requirements to protect itSenior Advocate Singhvi commenced his arguments by elaborating upon the "Android Ecosystem" to contextualise the dispute. He stated that the Android Ecosystem was an open source system with 15,000 smartphone models as opposed to Apple which only had 1 model. He added that there were 1500 global manufacturers or OEMs (Original Equipment Manufacturers) for Androids and 500 million devices just in India. "The Android revolution helps the consumer, the user. This is all because of system we've put in," he said.To protect the said ecosystem, Dr Singhvi stated that they had a baseline requirement on which more could be added or built upon. However, the baseline requirement remained. He then described to the court the Mobile Application Distribution Agreement (MADA) as a free, voluntary, non exclusive agreement between Google and the OEM."Take a screen of a phone. On the screen, the manufacturer will have variety of things. He is allowed to put multiple play stores. On the same screen, you can have additional downloads from the internet. Indians download a lot. All that MADA does is that it says that you can choose what you like but if you have Google, you keep it."At this juncture, CJI Chandrachud said that this argument was against Google as–"You lose an open source access. That affects the choice of the consumer. Look at the kind of authority you have in terms of dominance. Data indicates 15000 models, 500 OEMs...When you have that kind of market penetration and you insist upon having your own, is that right?"However, Dr Singhvi clarified that there existed rival apps for everything. He added–"Samsung phones have their own play stores. This is not a competition issue. If people choose Google Play Store, that's not abuse of dominance. That's excellence. Your Lordships encourages excellence. Look at the number of people coexisting! It's not for CCI to direct my business. If people like Google better, it's excellence!"2. No finding of abuse of dominance by CCIThe second submission made by Dr Singhvi was that the CCI had given its orders without any finding of abuse of dominance in the order. He submitted–"The direction is that a rival Play Store owner should be able to sit inside my play store. Can CCI give a direction like that? User safety- I cannot control. It's like saying that any trespasser can come...

'No Manifest Error In CCI Findings Against Google' : Supreme Court Affirms NCLAT Order Refusing To Stay CCI Order In Android Dominance Matter

Padmakshi Sharma

Tags