The Competition Commission of India (CCI) had on October 20 last year fined Google for its anti-competitive practices and abusive conduct in the Android mobile device ecosystem. The quantum of penalty imposed was ₹13,37.76 crores and CCI also issued ten non-monetary directions against the tech giant to be complied by January 20 this year. In 2019, CCI ordered a detailed probe following complaints by consumers of Android-based smartphones.
What is Android?
Android is an open-source mobile Operating System (OS), which was acquired by Google in 2005. Smartphones need an OS to run applications and programs. Google’s Android is the dominant mobile OS, powering over 95 per cent of India’s smartphones.
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Google operates and manages the Android OS and licenses other Google proprietary applications such as Chrome, Gmail, Maps, YouTube, Play Store etc.
Original Equipment Manufacturers (OEMs) or smartphone manufacturers use Android and through it, Google’s apps on their mobile phones.
What exactly was Google’s contravention of competition law in Android case?
In the Android case, CCI found Google in contravention of the Competition Law for various agreements executed with smartphones OEMs in connection with licensing of its mobile operating system Android. These agreements required OEMs to mandatorily pre-install the entire Google Mobile Suite (GMS), including a wide range of key Google apps such as Google Maps, Gmail, YouTube, etc., with no option to un-install the same. The requirement of prominent placement of such apps was also found to be imposition of unfair condition on device manufacturers.
CCI also found Google to be abusing its dominant position by making pre-installation of Google’s proprietary apps (particularly Google Play Store) conditional upon signing of Anti-fragmentation Agreement (AFA)/Android Compatibility Commitment Agreement (ACC) for all android devices manufactured/distributed/marketed by device manufacturers.
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This was found by CCI to have reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android i.e., Android forks, and limited technical or scientific development to the prejudice of the consumers, in violation of the provisions of competition law.
Various policies employed by Google resulted in a continuous flow of search queries from mobile users, to Google, which helped not only in protecting the advertisement revenue but also to reap the network effects through continuous improvement of services, to the exclusion of competitors.
With various agreements in place, the competitors never stood a chance to compete effectively with Google and ultimately, these agreements resulted in foreclosing the market for them as well as eliminating choice for users.
The underlying objective of Google in imposing various restrictions via its agreements entered into with OEMs was to protect and strengthen its dominant position in general search services and thus, its revenues via search advertisements.
Which were the Ten Non Monetary commands issued by CCI against Google?
The ten non-monetary directives include: OEMs shall not be restrained from (a) choosing from amongst Google’s proprietary applications to be pre-installed and should not be forced to pre-install a bouquet of applications, and (b) deciding the placement of pre-installed apps, on their smart devices.
Also, Google shall not restrict uninstalling of its pre-installed apps by the users; Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points. Users should have the flexibility to easily set as well as easily change the default settings in their devices, in minimum steps possible.
CCI also wanted Google to allow the developers of app stores to distribute their app stores through Play Store. CCI had directed Google to not restrict the ability of app developers, in any manner, to distribute their Apps through side-loading.
These steps are directed to make the markets contestable and ensure level playing fields for all players.
How did Google challenge the CCI order of October 20 last year in the Android case?
Google had on December 19 last year (virtually the last day before the sixty-day window for appeal expired) filed an appeal before NCLAT. NCLAT had on January 4, 2023 in the Google appeal matter declined to give an interim stay against the CCI ruling of October 20 last year and agreed to admit appeal on pre-deposit of 10 per cent of the overall penalty of ₹ 1337 crore. Google went in appeal before SC against this NCLAT order that refused an interim stay.
While declining to interfere with the NCLAT order of January 4 in the CCI’s Android ruling, the Supreme Court had on January 19 in its ruling directed the Appellate Tribunal to take up a final hearing on the Google appeal in Android matter and dispose of Google’s appeal by March 31.
The SC had also declined to grant stay on the ten non-monetary directions issued by the Competition Commission of India (CCI) in its October 20 ruling last year. The apex court had, however, extended the period of compliance on CCI’s ruling on Android matter by another week, and this period expired on January 26.
Did Google comply with all the ten non monetary directions by January 20 this year?
A stakeholder — US-based Epic Games Inc has now knocked on the doors of NCLAT seeking impleadment in the Android case. Epic Games has alleged that Google has failed to comply with the CCI non-monetary directions including the ones that wanted the latter to allow the developers of app stores to distribute their app stores through Play Store.
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Also, Epic Games has alleged that Google is still not allowing side-loading of Apps despite CCI directing the latter to not restrict the ability of app developers, in any manner, to distribute their Apps through side-loading. There is, however, no official word yet from CCI on the extent of compliance by Google.
So, what is the current status of the Android case?
The final hearing in the Google appeal in the Android case will happen on February 15-17 before the Principal Bench of NCLAT, comprising Ashok Bhushan, Chairperson, and Alok Srivastava, Member (Technical). As per Supreme Court directions, NCLAT will have to give its ruling before March 31.
On Wednesday, this NCLAT Bench is also expected to decide on three impleadment applications — Epic Games, MapMyIndia, and OSlabs Technology —to Google appeal. Two cross-appeals —Micromax and Karbonn- have already been withdrawn.
