The Competition Commission of India (CCI) will be exploring “legal options” on the recent NCLAT ruling in the Android case as regards the latter’s direction that “effects analysis” must be done by the competition authorities for proving any abuse of dominance under competition law, Additional Solicitor General N Venkataraman said on Thursday.
This NCLAT direction is seen as problematic for CCI, as it would mean that the competition authorities would have to show effects in all Big Tech cases, including those currently being investigated.
“NCLAT has now said that an effects test should be held even though it was consciously discussed by the legislature… in a standing committee, and it was finally felt that effects (analysis or test) should not be part of the law. There was a clear dispensation of the condition, and therefore this is one area where CCI would be exploring legal options as to what needs to be done in due course”, Venkataraman said at a TaxSutra organised webinar on “NCLAT Ruling in Google Case—Watershed Moment in Competition Law”.
Venkataraman, who represented CCI as its counsel in the Android case and is among the country’s top law officers, highlighted that CCI has been taking the stance that when it comes to abuse of dominance, there is no question of proving it ex ante to the percentage level. “In this case (the Android case), it was a super dominant player (Google), and the extent of abuse was discernible through perfect data”, he added.
“We had argued that once you derilect your special responsibility, enter into an unfair agreement, deny market access, and prevent innovation, then you are considered to have abused your dominant position”.
Venkatraman highlighted that 95–98 percent of the NCLAT order had confirmed CCI’s findings of October 20 last year, including the quantum of penalty in the Android ruling, and that Google only got “marginal relief” in terms of setting aside four of the ten non-monetary directions of CCI.
The NCLAT Android ruling is a textbook case on anti-trust matters, and the Appellant Tribunal had upheld all aspects under law of the CCI’s ruling on Google abusing its dominant position, Venkataraman noted.
The NCLAT ruling as regards effects analysis is significant, as the CCI in the Android case refrained from undertaking any effects analysis but concluded that Google had abused its dominant position in the Android ecosystem.
Presently, the law does not require the competition watchdog to establish the actual effects of the anti-competitive conduct of dominant undertakings.
Even the Competition (Amendment) Bill 2022, which was recently passed by both Houses of Parliament, did not include or stipulate “effects analysis” for proving abuse of dominance.
The introduction of effects-based doctrine was a key demand of the big tech industry, and the representatives of the sector deposed before the parliamentary panel seeking its incorporation into the law.
It may be recalled that the Parliamentary Standing Committee on Finance, headed by Jayant Sinha, had recommended that ‘effects’-based approach be incorporated into the Competition Act for examining cases of abuse of dominance. The government, however, rejected this suggestion.
