Android dominance: Supreme Court turns down Google's plea on CCI penalty

Firm gets 7 days to deposit 10% of Rs 1,337.7-cr fine

In a setback to Google, the Supreme Court on Thursday refused to grant it interim relief from the National Company Law Appellate Tribunal’s (NCLAT’s) order upholding a Rs 1,337.76-crore penalty imposed by the Competition Commission of India (CCI) for alleged unfair and anti-competitive practices related to Android devices. The Bench of Chief Justice of India D Y Chandrachud, Justice P S Narasimha and Justice J B Pardiwala said the findings of the CCI couldn’t be considered at the “interlocutory stage”.

“We direct the NCLAT to dispose of the appeal (against the CCI order) by March 31. No interim relief (is to be) granted to Google. Since Google is ready to partially comply with the CCI’s directions, we give it one week’s time to do so.”  In accordance with the CCI order, Google has to pay 10 per cent of the penalty imposed by the CCI. This it has to do in a week.

Google also seems to have softened its stand on the order given by the CCI.

Senior advocate Abhishek Manu Singhvi, appearing for Google India, said the firm was willing to comply with some directions of the CCI.

The court said: “Google would ensure unbundling of only Search and Chrome from Play, Chrome from Search. In terms of the decision of the European Commission (July 18, 2018), Google would ensure that the search app pre installation exclusivity only on portfolio-wise RSAs (response sensitive ads) would not be pursued.”

The CCI in its order on October 20, 2022, had said Google had abused its dominant position in multiple markets in the Android Mobile device ecosystem.

Singhvi submitted before the court that Android, unlike Apple, was compatible with 15,000 smartphone models.

“There are 500 million compatible devices only in India, and 1,500 global manufacturers or original equipment manufacturers (OEMs). MADA (Mobile Application Distribution Agreement) Rules allow for multiple play stores. People tend to install multiple. Indians download the most,” he said.

CJI Chandrachud asked: “Why should you insist on Chrome (pre-installed on smartphones)? If you insist on a bouquet, you lose open source. It affects the choice of the consumer. All that you have goes against you. Look at the market you hold, with that line of penetration if you insist on your bouquet.”

Singhvi said Google was there because of excellence, not dominance. Raising an objection to the CCI order, he said: “The third direction of the CCI is highly objectionable. A rival Play Store owner should be able to sit inside my Play Store. Can the CCI ever give a direction like this?”

Several industry players hailed the court’s stand on the CCI order.

Naval Chopra, partner, competition law practice, Shardul Amarchand Mangaldas & Co, said: “This is a landmark decision in the history of competition law jurisprudence in India and globally. The CCI’s wide-ranging remedies go beyond Europe and will force Google to change the way it does business. It will open up markets for Google’s competitors.”

Rohan Verma, chief executive officer (CEO) and executive director, MapmyIndia, said: “We at MapmyIndia are elated and grateful to the Supreme Court. Today onwards, we call upon consumers and original equipment manufacturers to try and use MapmyIndia’s Mappls app, which offers far better maps, navigation and safety features than Google Maps.”

Rakesh Deshmukh, cofounder and CEO, Indus OS, which had also appealed against Google’s plea, said: “This decision will usher in a cataclysmic change in the Indian smartphone ecosystem … millions of Indian users will now have a choice to experience our app store without any restrictions. Indus OS has been working on its app store for over a decade now, which is tailor-made to meet the preferences of the Indian consumers.”

Senior advocate Mukul Rohatgi, appearing for one of the interveners, argued that mandatory pre-installations of apps reduced incentives to download anything else.

“There is no reason for India not to be treated at par. You cannot treat the laws of this country as laws of the third world,” he said.