CCI to NCLAT: Companies that did not sign Google agreements became ‘extinct'

In 2018, Android users alleged before the CCI that Google was abusing its dominant position in the mobile operating system-related market in contravention with the provisions of the Competition Act, 2022.

The Competition Commission of India (CCI) on March 13 argued at the National Company Law Appellate Tribunal (NCLAT) that companies that did not sign Google’s contracts to use the Android and went on to develop their own version of the operating system became extinct.

The antitrust watchdog advanced this argument to explain the tech giant’s allegedly anti-competitive agreements that prohibited Original Equipment Manufacturers (OEMs) from producing Android forks.

Android forks are a version of the operating system that has been modified from the open-source version of the source code, but has not been approved as Android-compatible by Google.

Additional Solicitor General N Venkatraman, who appeared for the CCI, argued on the anti-competitive nature of Google’s agreements such as Mobile Application Distribution Agreement (MADA), Revenue Sharing Agreement (RSA) and Anti- Fragmentation Agreement (AFA).

MADA mandates that OEMs install Google’s entire G suite, which consists of 11 apps such as Google search, Gmail, Youtube, among others, and not individual apps.

AFA bars OEMs from developing Android forks; it is Google’s argument that it asks manufacturers to sign AFA to maintain a baseline quality and ensure that when an app is written for one Android device, it can be used across all devices.

RSA is an agreement between Google and OEMs under which the manufacturer and the company share revenues from Google’s pre-installed apps.

Venkatraman stated that all these agreements are meticulously organised to ensure that the end-user of these products invariably ends up using Google apps and Google search, which generates revenue for the tech giant. The ASG termed Google’s as ones that lead the end user to ‘digital addiction’.

The ASG argued that Google was making OEMs relinquish their rights to develop Android forks and termed the agreement ‘unilateral.’ Venkatraman argued that OEMs that did not sign the agreement went ‘extinct’ as they could not survive in the market.

Reading from the clauses in MADA, RSA and AFA, the ASG argued that Google had total control over every aspect of a device as an Android device can become a ‘qualified device’ only after Google certifies it to be so. He said that a device was not certified as a ‘qualified device’ unless the OEM signed Google’s agreement.

CCI argued that each of these agreements was linked to another and cannot be signed independently, thereby putting the OEMs in a position where they will have to sign all the agreements for their device to be certified by Google as a fully ‘qualified device.’

In 2018, Android users alleged before the CCI that Google was abusing its dominant position in the mobile operating system-related market in contravention with the provisions of the Competition Act, 2022. It was alleged that Google asking device manufacturers to preinstall the entire Google Mobile Services (GMS) suite under MADA was an unfair condition.

The CCI subsequently ordered an investigation by the Director General (DG) of its investigative arm on this issue.

The CCI in 2019 expressed a prima facie opinion that mandatory pre-installation of the entire GMS suite under MADA amounted to imposition of unfair conditions on device manufacturers.

On October 20, 2022, the CCI, based on the DG’s report and other documents filed by both sides, concluded that Google was abusing its dominant position in multiple markets in the Android mobile device ecosystem.

The CCI held that Google can neither force OEMs of smart devices to preinstall its apps nor restrict users from uninstalling such apps. Furthermore, it asked the US-based company not to offer any incentives to OEMs to comply with its conditions.

Google moved the NCLAT in January, but failed to get immediate relief. The company then approached the Supreme Court against the tribunal's decision. While the apex judicial body refused to intervene in the case, it asked the NCLAT to decide on the matter by March 31, 2023.

The tribunal began its hearing in the case on February 15, and will continue to hear CCI's arguments on March 14.