A big relief for Google, the Supreme Court stayed the penalty of Rs. 1337.76 crore imposed by C.C.I. for anti-competitive practices

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The Supreme Court listed the plea filed against the order of NCLAT (National Company Law Appellate Tribunal) regarding the unfair and anti-competitive practices of Google in relation to Android phones for January 16, 2023. Competition Commission of India (CCI) imposed a penalty of Rs. 1,337.76 crores on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem.  This matter was held by the Supreme Court bench comprising Chief Justice DY Chandrachud and Justice PS Narasimha.

In this matter, CCI examined various practices of Google with respect to licensing of this Android mobile operating system and various proprietary mobile applications of Google such as Google Search, YouTube, Play Store, Google Chrome, and others. Five relevant markets were outlined by CCI concerning this matter which include the Market for licensable OS for smart mobile devices, app store for Android smart mobile OS, general web search services, non-OS specific mobile web browsers, and online video hosting platforms in India. During the course of inquiry, Google argued about the competitive constraints being faced from Apple whereas, for better understanding, CCI noted differences in the two business models affecting the underlying incentives of business decisions. CCI highlighted that “Google’s business was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue-earning services whereas Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on the sale of high-end smart devices with state of the art software components.” On the basis of CCI’s assessment, Google was found to be dominant in all the mentioned relevant markets.

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In addition, Google ensured that its search services on mobile devices are used extensively by the users which facilitated uninterrupted growth of advertisement revenue for Google. Various restrictions were imposed by Google via MADA (Mobile Application Distribution Agreement), RSA (Revenue Sharing Agreement), AFA (Anti-fragmentation Agreement), and ACC (Android Compatability Commitment Agreement) for protecting and strengthening its dominant position in general search services. While hearing the matter, the bench said that Google violated the Section 4(2)(a)(i), 4(2)(b)(ii), 4(2)(c), 4(2)(d) and 4(2)(e)of the Competition Act, 2002. Considering this, CCI imposed penalty of Rs. 1337.76 Crores on Google and issued a sease and desist order against Google in context to anti-competitive practices fund in Contravention of Section 4 of the Competition Act. 

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