Tag: nclat

Google Has Created Digital Data Hegemony, CCI Alleges Before NCLAT

Fair trade regulator CCI on Thursday alleged that Google has created a digital data hegemony and called for a market space with “free, fair and open competition”.

Concluding the arguments of the Competition Commission of India (CCI) before the appellate tribunal NCLAT in the Google matter, Additional Solicitor General N Venkataraman said a market with greater freedom for all players would be in total sync with principles of free competition rather than the ‘walled garden’ approach of the internet major.

On October 20 last year, the CCI slapped a penalty of Rs. 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. The regulator had also ordered the internet major to cease and desist from various unfair business practices.

This ruling has been challenged before the National Company Law Appellate Tribunal (NCLAT).

On Thursday, Venkataraman submitted that Google had used its money-spinning search engine as the ‘castle’ and the rest of the other apps to play the defensive role of ‘moat’. This ‘castle and moat’ strategy is data hegemony, which means a big market player tends to get bigger and bigger while a small entrant struggles to attain a critical mass of users and user data.

According to him, data capture and data deployment are getting exploited and monetised as advertisement revenues. When the choice is the guiding principle of the competition law, Google’s hegemony reduces both choice and competition.

Venkataraman emphasised that implementation of the remedies made by the CCI would go a long way towards having a market with greater freedom for all players, which would be in total sync with the principles of free competition rather than the ‘walled garden’ approach of Google.

The abuse of dominance by Google stands proved in every criteria laid under Section 4 of the Competition Act in terms of mandatory pre-installation, premier placement and bundling of core apps. Such practices result in the imposition of unfair conditions and supplementary obligations, he said.

He also pointed out that the tying of apps had enabled Google to use its dominant position in one relevant market to enter into and protect other relevant markets.

In his submissions, Venkataraman mentioned that large data gateways like GST and UPI, which has data on crores of persons and entities, are run for the public good by public institutions.

However, when it comes to private entities, engaging in a digital business where there is a steady unstoppable flow of data and traffic, the same gets resourcefully calibrated to the sole benefit of these entities. The competition law is one important pillar in the democratisation of data and in achieving the objective of the greatest good for the greatest number, he argued.

The NCLAT started its hearing in the Android matter on February 15, following a direction of the Supreme Court. The apex court had directed the NCLAT to decide the appeal by March 31.

On January 4, a separate bench of the NCLAT issued a notice over Google’s plea, directing it to pay 10 per cent of the Rs. 1,337 crore penalty imposed by the CCI. It had declined to stay the CCI order and put the matter for a final hearing on April 3, 2023.

This was challenged by Google before the Supreme Court, which also declined to stay the CCI order but directed the NCLAT to decide on Google’s appeal by March 31.

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Supreme Court Dismisses Google’s Plea to Modify January 19 Order Upholding NCLAT Decision on CCI Penalty

The Supreme Court on Friday refused to entertain the plea of Google LLC seeking modification of its January 19 order and said the company can raise its grievances during hearing of its appeal before the NCLAT.

A bench of Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala said at most it can add “without prejudice” in the January 19 order and nothing more.

Senior advocate Maninder Singh, appearing for the US tech giant said some portion in the January 19 order needs to be deleted.

The bench said the order was dictated in the open court and therefore there is nothing to clarify or modify.

The counsel appearing for Competition Commission of India (CCI) said the appeal of Google is listed for hearing next week before the National Company Law Appellate Tribunal (NCLAT) and they can raise these issues before the tribunal.

The bench told Singh, “Sorry, it can’t be done. We will not do it. You can raise all these grievances during the hearing of the appeals”.

On January 19, in a setback to Google, the top court had endorsed the order of the NCLAT declining to grant an interim stay on the imposition of a penalty of Rs. 1,337 crore on the US tech giant by the competition regulator for allegedly abusing its dominant position in the Android mobile device ecosystem.

The top court had said at the interlocutory stage, it would suffice to say that the findings of the CCI against Google were neither without jurisdiction nor suffering from any manifest error warranting its interference.

It had granted a week’s time to the US firm to deposit 10 percent of Rs. 1,337 crore penalty imposed on it by the CCI.

The top court had asked the NCLAT to decide Google’s appeal against the competition regulator’s order by March 31 this year after charting out the time schedule for the hearing.

“It suffices to note that the findings which have been arrived at by the CCI cannot be held, at the interlocutory stage, to be either without jurisdiction or suffering from a manifest error which would have necessitated interference at the interlocutory stage”, it had ordered.

Google had earlier moved the top court against the January 4 order of the NCLAT refusing an interim stay on the competition regulator imposing a Rs. 1,337 crore penalty on it.

The NCLAT, however, had admitted the search giant’s challenge to the CCI imposing the fine for abusing the dominant position of its Android smartphone operating system in the country and ordered the listing of its plea in April.

The US-headquartered firm, during the hearing, had said without prejudice, it was ready to partly comply with the order of the CCI.

“These may be followed to the following extent – A. Google would ensure unbundling of only search and chrome from Play, chrome from search; In terms of the decision of the EC (European Commission) dated 18 July 2018, Google would ensure that the search app pre-installation exclusivity only on portfolio wise RSAs would not be pursued,” the top court had said.

It had noted that the NCLAT had listed the appeal for final hearing and hence, did not hear the case on merits.

Earlier, the CCI had said the issue pertaining to the alleged abuse of dominant position by Google in multiple markets in the Android mobile device ecosystem is of “national importance” and the world is looking at how India is dealing with the matter.

The CCI had on October 20 last year asked Google to allow smartphone users on the Android platform to uninstall applications and let them select a search engine of their choice.

That order was to become effective from January 19.

On October 20 last year, the CCI besides slapping the steep penalty on Google had also ordered the internet major to cease and desist from various unfair business practices.

The regulator, which passed the order after having directed a detailed probe more than three years ago, has also asked Google to modify its conduct within a defined timeline.

The CCI, which had started probing the case in April 2019, has directed that Original Equipment Manufacturers should not be restrained from choosing from amongst Google’s proprietary applications to be pre-installed and also not be forced to pre-install a bouquet of applications on their smart devices.

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Google Says CCI Orders Strike Blow at Digital Adoption in India, Will Lead to Higher Prices

Google on Friday hit out at the competition regulator for slapping penalties for alleged abuse of its dominant position, saying the orders strike a blow at the effort to accelerate digital adoption in India and will lead to higher prices.

Failing to secure an interim relief on more than Rs. 2,200 crore fine imposed by the Competition Commission of India (CCI), the US tech giant penned a blog ‘The Heart of the Matter’ to put across its point on how the orders would harm the digital ecosystem in the country.

India, it said, is at a juncture where barriers to access must be brought down, and safe and secure smartphones made available to all.

“At a time when only half of India’s population is connected, the directions in the CCI’s order strikes a blow at the ecosystem-wide efforts to accelerate digital adoption in the country,” it said, adding the firm is appealing against the orders.

CCI, in October last year, slapped a Rs. 1,337.76 crore fine on Google for exploiting its dominant position with respect to Android, which powers 97 percent of smartphones in India. It imposed another Rs. 936 crore penalty on the US tech giant in a case related to its Play Store policies.

While in the first case, CCI asked Google to allow smartphone users on the Android platform to uninstall apps and let them select a search engine of their choice, the regulator had asked the company to take corrective steps on policies that forced developers to use Google Play’s billing system to list their apps on its Play Store.

Currently, one cannot delete apps such as Google Maps or YouTube from their Android phones when they come pre-installed.

Google has not been able to secure relief from the appellate tribunal NCLAT, which asked the company to deposit 10 percent of the fine within four weeks. Google has since moved the Supreme Court in at least one case.

In the blog, Google said Android is a key part of the Indian mobile and Internet growth story.

“In 2008, when Android launched, access to smart, internet-enabled devices was a huge challenge due to prohibitive costs. Over the last 15 years, through Android’s free open-source software and suite of high-quality apps, Google has helped device manufacturers make smartphones more affordable by a vast margin,” it said.

As a result, a fully functional smartphone is available at less than Rs. 6,000.

“For a country like India, where the cost of adoption is the biggest barrier to digitisation, this has had profound implications. More users have incentivised more developers, and each of those developers achieve immediate scale by writing a single app for Android,” it said.

The number of annual app downloads in India reached a new high of 29 billion in 2022, making it the second biggest app market after China, offering developers in India and elsewhere, a strong platform to establish viable businesses on Play Store.

Google said predatory apps expose users to financial fraud, and data theft and while it can scan apps on its Play Store for malware as well as compliance with local laws, the same checks may not be in place for apps sideloaded from other sources.

CCI-ordered remedies strike blows on digital adoption drive in India, it said, adding remedies ordered by the regulator would lead to increased exposure to online harm and privacy risks.

“Devices built on incompatible ‘forks’ (or different versions of Android) would prevent Google from securing those devices, as these versions will not support the security and user safety features that Google provides,” it said.

“Lack of robust and consistent security upgrades will leave the users of those devices exposed to cybercrime, bugs, and malware — which is most troubling for the millions of new internet users who are especially vulnerable,” it added.

Android, today, offers the right balance of a consistent security bedrock through baseline compatibility while device manufacturers have the choice to create bespoke and highly differentiated user experiences for their brands on top of that.

“Unchecked proliferation of such apps on less secure devices can expose vast swathes of Indian users to risk of their data being exposed and pose threats for individual and national security,” Google said.

Since incompatible Android forks will not support the security and user safety features that Google provides, security responsibilities for these devices will instead fall to the OEMs, who will need to invest extensively in creating consistent, all-year-round security upgrades themselves.

This, it said, will result in higher costs for the OEMs, and consequently, more expensive devices for Indian consumers.

As a result of Android’s compatibility programme, when developers write apps for Android, the apps can immediately access Android’s vast base of users. This allows even small developers to compete with large developers across the whole Android ecosystem, based on the merit and superiority of the product.

If CCI order is implemented, “they will no longer have the level playing field they have today with Android, and larger developers, who can support a wider range of incompatible forks, will be able to dominate the market based on their scale, rather than the quality of their product,” it said.

Google said the free Android operating system enables device manufacturers to build a wide range of devices at different price points that gives users unprecedented choice.

Android leaves OEMs free to pre-install any other app and app stores and they all already do.

“Users are free to install apps from sources beyond app stores (‘sideload’) — in such cases, Android displays alerts to ensure users act with awareness for their own safety.

“For developers, beyond providing a vast, vibrant platform to reach users, Android offers tools, predictability, timely security upgrades and multiple monetisation options,” it added. 

 

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Google Said to Challenge CCI’s Order on Unfair Business Practices in Android

Google has approached the appellate tribunal NCLAT challenging the CCI’s order on unfair business practices in Android mobile device ecosystem, the company spokesperson said on Friday. The Competition Commission in October slapped a steep penalty of Rs. 1,337.76 crore on internet giant Google for abusing its dominant position in multiple markets in relation to Android mobile devices and ordered the internet major to cease and desist from various unfair business practices.

A Google spokesperson told PTI: “We have decided to appeal the CCI’s decision on Android as we believe it presents a major setback for our Indian users and businesses who trust Android’s security features, and potentially raising the cost of mobile devices.”

“We look forward to making our case in NCLAT and remain committed to users and partners,” the spokesperson added.

Android has greatly benefitted Indian users, developers, and OEMs, and powered India’s digital transformation, the company said.

Google has sought a stay, sources said, adding that the company believes that CCI failed to appreciate strong evidence on record from OEMs, developers, and users demonstrating that the open Android business model supports competition for the benefit of all stakeholders, including in India specifically.

Google is optimistic that the NCLAT will take full account of the evidence on record and the tremendous contribution that Android has made to the massive growth and prosperity of the mobile ecosystem in India, sources said.

Sources asserted that Android had created more choices for everyone, and supports thousands of successful businesses in India and around the world.

The CCI decision exposes Indian users to unprecedented security risks, and will make Android devices in India more expensive, less functional and less safe than they are today, sources claimed.

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