NCLAT on Android anti-trust case — CCI is absolutely right but Google isn't quite wrong too

The Competition Commission of India had on October 20, 2022 imposed a fine of Rs 1,337 crore on Google for abuse of its dominant position in Android mobile device and Play Store Apps market. Even though the National Company Law Appellate Tribunal , hearing an appeal filed by Google, has now upheld the overall finding of the CCI that Google indeed abused its market dominance to keep out and frustrate smaller rival players, it has set aside the CCI’s critical and pointed directions to end the specific abuses. To be sure, the fine has been left undisturbed. That is a small mercy!Also Read: Google vs CCI: Google fails to get interim relief in App store caseBut it is just a slap on the giant’s wrists as paying the seemingly hefty penalty is not going to stretch its resources unduly given its deep pockets and the dollar-INR exchange rate advantage it enjoys. Truth be told, Google has actually won the case though technically it has lost the appeal. It would be laughing up its sleeves at the smallness of the fine and the freedom to go on as usual. The NCLAT has set aside the CCI orders on specific guilts and abuses that are anti-competitive which would embolden it to go on as usual smug in the knowledge that worst come worst it would be called upon a few years down to pay another tranche of fine! Punishments should be both exemplary and deterrent. NCLAT has dished out neither. NCLAT has set aside CCI’s order to allow users uninstalling of Google’s pre- installed or preloaded apps on Android devices. When dominant applications such as Gmail, Youtube and Google Maps come preinstalled on Android phones, it virtually constitutes an entry barrier for new players, all the more so when its Play Store can be counted upon to disallow download of rival apps.Also Read: Google to pay Rs 1,337 crore CCI penalty in 30 days: NCLATEven assuming Play Store is magnanimous and allows downloading of rival apps, users would be frustrated by the limited storage space. For, to install apps of their own choice made available by playstore, additional storage space admittedly would be needed for which the rival Google apps may have to be uninstalled and make space. The key therefore is uninstallation which Android doesn’t permit when it comes to Google Apps and which NCLAT has chosen to paper over perhaps influenced by the innocent Google claim that such uninstallation would compromise with the safety of the device and its owner!In fact, this message flashes when users try to uninstall preinstalled apps. Some independent apps like Netflix and Spotify come preinstalled after paying Android for such first mover advantage. Obviously, Google cannot allow their ejection by the android user lest it is taken to courts by independent apps. Be that as it may.Google again is adamant it will enforce rules that require app developers on its Play Store to use its in-app payment system instead of independent payment systems which implies developers would perforce have to use Google’s billing system, which takes a hefty sliver towards fee for every transaction. CCI had separately fined Google Rs 936.44 crore for abusing its dominant position with regard to its Play Store billing and payment policy which NCLAT has glossed over. Google has challenged this separate fine of Rs 936.44 crore in court.Also Read: How two researchers and a law student sparked a CCI probe into GoogleNCLAT’s indulgence on this score can have a serious impact on India’s burgeoning and promising start-up ecosystem. They need to have a free and fair market environment to scale up their businesses which the CCI was alive to but unfortunately has been lost on the NCLAT. Indian startups must be allowed to rope in the services of billing system other than of Google’s.Another instance of abuse which would go on untrammelled is insistence on Gpay elbowing out rivals like Phonepe, Paytm and others from the android driven cell phones. What the NCLAT has done is to run with the hare and hunting with the hound. This is the danger inherent in the anxiety to deliver balanced or nuanced verdict where one is not needed. When you straddle two stools, you fall between them. The NCLAT has fallen prey to the self-serving view of Google that its anti-competitive practices are necessary evils, the ones in consumer interest. Fine cannot be a substitute for stopping abuse of dominance. It is disingenuous for NCLAT to say we find Google’s practices anti-competitive but are nevertheless convinced that an owner of technology would naturally promote his own apps instead of allowing rival apps. Touché!

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NCLAT on Android anti-trust case — CCI is absolutely right but Google isn't quite wrong too

By S Murlidharan Apr 3, 2023 12:10:04 PM IST (Published)

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