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Google vs CCI: NCLAT’s Rs 1,338 crore fine

NCLAT gives mixed verdict on Google’s Android case, sets aside four of CCI’s directions

What happened: Google announced on Wednesday that it is evaluating its legal options following the National Company Law Appellate Tribunal’s (NCLAT) partial upholding of the Competition Commission of India’s (CCI) Android dominance ruling against the tech giant.

Why it matters: Google is one of the most influential players in the Indian digital economy, with its Android operating system powering over 97% of the country’s 600 million smartphones. The ruling by the NCLAT could have significant implications for Google’s business model and practices in India, as well as for its competitors and consumers.

The big picture: The NCLAT’s order is the latest development in a long-running legal battle between Google and CCI, which began in 2014 when two complaints were filed against Google for abusing its dominant position in the Android ecosystem. The CCI had found Google guilty of imposing unfair conditions on original equipment manufacturers (OEMs) and app developers, and had imposed a penalty of Rs 1,338 crore on Google in October 2022. Google had challenged the CCI’s order before the NCLAT in January 2023, but did not get any interim relief. The company had also approached the Supreme Court, which had refused to intervene and directed the NCLAT to hear the matter.

Between the lines: The NCLAT has upheld the CCI’s penalty and six of its ten corrective directions on Google, but has set aside four of them that would have required Google to make major changes to its Android and Play businesses. These include allowing users to uninstall pre-installed Google apps, allowing third-party app stores on Play Store, sharing private Play Services APIs with competitors, and not restricting app distribution via sideloading.

Flashback: Google had argued before the NCLAT that its agreements with OEMs and app developers were necessary to ensure compatibility and security of Android devices, and that it did not prevent users from installing or using other apps or services. The company had also claimed that it did not charge any fee for licensing Android or Play Services, and that it provided significant benefits to OEMs, app developers and consumers.

By the numbers: According to a report by RedSeer Consulting, the Indian smartphone market is expected to grow from 600 million users in 2022 to 900 million users by 2025, with Android being the dominant operating system. Google Play Store is also one of the largest app distribution platforms in India, with over 400 million monthly active users and over 100 billion app downloads in 2022.

What they’re saying: A Google spokesperson said in a statement: “We are grateful for the opportunity to present our case to the NCLAT and we are reviewing the order and weighing our legal options.” A CCI official told ET Telecom that the regulator was satisfied with the NCLAT’s order and that it would defend its findings if Google appealed to the Supreme Court.

Catch up quick: Google is facing a legal challenge from India’s competition watchdog over its alleged abuse of dominance in the Android ecosystem. The NCLAT has upheld a penalty of Rs 1,338 crore on Google and six corrective directions, but has set aside four others that would have forced Google to make significant changes to its Android and Play businesses. Google has said it is reviewing the order and considering its legal options.


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