In their latest skirmish, the Cellular Operators Association of India (COAI) on March 5 condemned attempts by tech giants over their attempts to oust homegrown apps, claiming the move was driven by financial motives.
While COAI did not expressly mention Google, it is largely assumed that the association's statement was aimed at the G in FAANG, the initialism that represents Big Tech; the company changed its name to Alphabet in 2015. Google and some Indian startups have been warring recently over the former removing certain apps from its online mart Play Store over disputes regarding its billing system. However, these apps were reinstated by Google 'temporarily' on March 5.
The dispute between Google and a bunch of Indian startups is not a new one, having begun almost six years ago when a complaint was filed before the Competition Commission of India (CCI) over the tech giant abusing its dominant position in the Android and the Play Store ecosystem.
Moneycontrol explains what orders were passed by the CCI, where the appeals are pending, and when these are likely to be heard.
CCI orders
On October 20, 2022, the CCI, India’s antitrust regulator, levied a penalty of Rs 1,338 crore on Google for abusing its dominant position in the mobile operating system (OS) market. The proceedings in this case began in 2018.
On October 25, 2022, the CCI levied another penalty of Rs 936 crore on Google, this time for its anti-competitive Play Store policies on Android devices. The CCI found that Google had created an entry barrier for mobile phone applications to list on Play Store, and that the same barriers did not apply to in-house apps of the tech giant like YouTube. The proceedings in this case began in 2020.
While Google filed an appeal against both the penalties, it has not managed to obtain any positive orders from the courts. Cases pertaining to these CCI orders are pending in the Supreme Court (SC), the Delhi High Court (HC), the Madras HC and the National Company Law Appellate Tribunal (NCLAT). An application by a bunch of startups alleging that Google’s new billing policy is in violation of CCI’s orders is also under consideration by the antitrust regulator.
The appeal that reached SC twice
Google’s plea against the Rs 1,338 crore penalty reached the SC twice, once against NCLAT’s refusal to pass an interim order in January and once against NCLAT’s final order. While Google has managed to obtain some favourable orders from NCLAT, it has not gotten any stay on the penalty. According to some news reports, Google has paid the entire penalty amount.
The genesis of the case dates back to 2018, when some Android users approached the CCI alleging that Google was abusing its dominant position in the mobile OS-related market in contravention of the provisions of the Competition Act, 2002. They alleged that the tech behemoth's demand that device manufacturers pre-install the entire GMS (Google Mobile Services) suite under its Mobile Application Distribution Agreement (MADA) was unfair.
The CCI ordered an investigation by the director general (DG) of its investigative arm into this matter. In 2019, the CCI gave a prima facie opinion that mandatory pre-installation of the entire GMS suite under MADA amounted to the 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. It asked Google to cease and desist from its practices and pay a penalty of Rs 1,338 crore.
Google filed an appeal at NCLAT and sought a stay on the operation of CCI’s order. However, in January 2023, the NCLAT refused to pass any such order.
The tech giant approached the SC against this interim order, but the apex court refused to interfere and directed the NCLAT to decide the case in a time-bound manner. In March 2023, the NCLAT partially upheld CCI’s directions, while completely upholding the antitrust regulator’s penalty. The NCLAT also held that the CCI must conduct an ‘effect analysis’ in order to conclude if an abusive conduct by a company is anti-competitive or not.
Both Google and CCI have approached the SC against this order. The SC is expected to commence hearing of the case in April 2024.
Google’s multi-front legal battle on the Play Store order
Google is fighting cases in the NCLAT, Delhi HC, Madras HC and CCI against the order on its Play Store policies (including billing). While the tech titan has itself filed an appeal against the CCI order before the NCLAT, a bunch of startups have initiated litigation in three different forums against Google.
On October 25, 2022, the CCI penalised the tech giant for restricting app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play Store. The Play Store is a digital distribution service operated and developed by Google, from where mobile apps are downloaded.
The CCI held that making access to the Play Store dependent on mandatory usage of the Google Play Billing System (GPBS) for paid apps and in-app purchases constitutes the imposition of an unfair condition on app developers. The CCI held that Google was following discriminatory practices by not using GPBS for its own application, YouTube.
Google went in appeal against this order to the NCLAT, and on January 11, 2023, the tribunal refused to grant immediate relief to Google against the CCI order, and posted the case for final hearing in April 2023. While Google filed an appeal at the SC against the NCLAT order, it ultimately withdrew the case. The NCLAT is expected to commence the hearing of this appeal in November 2023.
Legal battles against startups in Madras and Delhi HCs, and CCI
In April 2023, the Alliance of Digital India Foundation (ADIF), a think tank representing a bunch of startups, moved the Delhi HC against the competition regulator and the search behemoth, pleading that the CCI must urgently investigate Google's new user-choice billing system (UCB) as it violated the antitrust watchdog's October 25, 2022, order. The court directed the CCI to investigate the issue at once and pass orders.
In May 2023, the CCI decided to inquire into Google's new UCB policy and check whether the company had complied with its October 2022 order. The competition regulator is currently examining the new billing policy. However, since Google was not restrained by any forum from implementing the new policy, it was free to delist from the Play Store any app that refused to comply with the policy.
Startups then moved the Madras HC for protection from delisting. While the court granted interim protection to these startups, a single judge eventually ruled that the CCI had the jurisdiction to rule on the matter, and not the Madras HC. The startups moved a division bench of the Madras HC against this order but got no relief.
A bunch of appeals filed by the startups is currently pending in the SC.
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