Google dominated search market even before pre-installing apps on Android phones, tech giant tells NCLAT

Google argued before the National Company Law Appellate Tribunal (NCLAT) on the final day of the hearing of its appeal that it had dominated the search market even before the search app was pre-installed in Android phones by Original Equipment Manufacturers (OEMs).

According to the tech giant, the company had a market share of 97 percent in search even before its mobile application was pre-installed.

Google argued that it had gained dominance since users preferred it over other products, but the Competition Commission of India (CCI) had not stated why it found the tech giant had abused its dominance.

Google made this argument to counter the CCI's allegation that it had become a dominant player by muscling OEMs to pre-install the Google Suite, using the  Mobile Application Distribution Agreement (MADA).

CCI relied on irrelevant data

The tech giant’s lawyer, Arun Kathpalia, said that CCI relied on irrelevant data to conclude that Google Chrome is the dominant web browser.

According to Kathpalia, in 2018, the market share of the now-banned UC browser was 36 percent, while Chrome’s market share was 44 percent. He submitted that Google Chrome’s market share increased only after the government banned UC browser in 2020. He said: “It is the government’s ban that increased Chrome’s market share, and not my (Google’s) conduct.”

He submitted that CCI relied on the 2020 data to decide on the abuse of dominance today.

CCI’s understanding of Google’s agreements is flawed

Kathpalia further argued that CCI’s understanding of its agreements such as MADA, the Anti-Fragmentation Agreement (AFA), and the Revenue Sharing Agreement (RSA) is flawed.

Kathpalia also questioned the Director General’s (DG) investigation in the case, stating that key factors were ignored as the focus was solely on ensuring that Google is found guilty of abusing its dominance.

Sideloading

Kathpalia questioned CCI’s conclusion that Google had promoted its app store by blocking sideloading and not permitting third-party app stores.

Sideloading is the installation of an app on a mobile bypassing the device’s official application distribution system. Sideloading can pose risks as apps may not be screened for malware and other threats, like piracy. Android mobiles flash a warning to the user when they detect an unknown app is being sideloaded.

Kathpalia stated that external app stores can be a source of malware and could house illegal applications,  and Google cannot be saddled with the responsibility of regulating such third-party app stores. He further argued that it is Google’s duty as an intermediary to deal with malware in a strict manner.

Kathpalia reiterated that the CCI cannot force the company to share its proprietary API with a third party as it is an intellectual property.

Background

On October 20, 2022, CCI, based on its Director General’s (DG) investigation 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.

CCI held that Google can neither force OEMs 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. CCI asked Google to cease and desist, and pay a penalty Rs 1,338 crore.

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 court refused to intervene in the case, it asked the NCLAT to decide on the matter by March 31, 2023.

On March 20, the tribunal reserved the case for judgment after hearing all the parties for over a month.