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NCLAT Upholds CCI's Rs 1338 Cr Penalty Against Google
The NCLAT ruled that Google does, in fact, limit OEMs' incentives to develop their own versions of Android (Android forks) by imposing conditions in its Anti Fragmentation Agreement (AFA) that prohibit OEMs from developing and distributing Android forks
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The National Company Law Appellate Tribunal (NCLAT) upheld a portion of the Competition Commission of India's (CCI) Android dominance ruling against Google on Wednesday. The tribunal affirmed the CCI's penalty of Rs 1338 crores.
The anti-trust appellate tribunal ruled that the CCI's decision is free of confirmation bias. Furthermore, the NCLAT ruled that Google's request that Original Equipment Manufacturers (OEMs) pre-install the complete Google Suite of 11 applications amounted to unfair conditions.
The NCLAT ruled that Google does, in fact, limit OEMs' incentives to develop their own versions of Android (Android forks) by imposing conditions in its Anti Fragmentation Agreement (AFA) that prohibit OEMs from developing and distributing Android forks.
Google has been granted 30 days to pay the fine and comply with the court order. The tech behemoth can now appeal the ruling to the Supreme Court.
After hearing the case for over a month, a panel headed by Chairperson Justice (retd) Ashok Bhushan and Dr Alok Srivastava reserved judgement.
The tribunal began considering the case on 15 February after the Supreme Court ordered it to make a decision by 31 March. The tribunal heard statements from Google's Senior Counsels Arun Kathpalia and Maninder Singh over the course of one month. N Venkataraman, Additional Solicitor General, and Samar Bhansal, standing counsel, defended the CCI.
Application developers such as MapmyIndia, Indus OS and Epic Games also claimed that Google's policies harmed them and drove them out of business.
In 2018, Android users filed a complaint with the competition watchdog, claiming that Google was abusing its dominant position in the mobile operating system-related market in violation of the Competition Act. It was claimed that the US tech behemoth's requirement that device manufacturers preinstall the complete GMS or Google Mobile Services suite as part of its Mobile Application Distribution Agreement, or MADA, was an unfair condition.
The CCI then directed that the director general (DG) of its investigative arm conduct an investigation into this issue.
The CCI stated in 2019 that mandatory pre-installation of the complete GMS suite under MADA amounted to imposing unfair conditions on device makers.
Based on the DG's report and other documents submitted by both parties, the CCI determined on 20 October 2022, that Google was abusing its dominant position in multiple markets within the Android mobile device ecosystem. It demanded that Google stop its practices and pay a punishment of Rs 1,338 crore.
Google could not compel OEMs of smart devices to preinstall its apps, nor could it prevent users from uninstalling such apps, according to the fair practises regulator. It also requested that the US conglomerate not provide any incentives to OEMs in order for them to adhere to its terms.
Google relocated the NCLAT in January but did not receive instant relief. The company then appealed the tribunal's ruling to the Supreme Court. In turn, the Supreme Court declined to intervene in the matter and directed NCLAT to investigate it.