Supreme Court has listed for July 14 Google’s appeal challenging NCLAT’s order which upheld the imposition of ₹1,337.76 crore penalty on the tech giant by the Competition Commission of India (CCI).
The apex court is also expected to club and simultaneously take up for hearing the CCI’s appeal on the same NCLAT order. In fact, CCI’s appeal preceded Google’s appeal of the NCLAT order in the Android matter.
The cross-appeals are to come before a SC Bench comprising Chief Justice of India D Y Chandrachud and Justice P S Narasimha, sources said.
It may be recalled that NCLAT had on March 29 substantially upheld the CCI’s Android order of October 20 last year, even while granting relief to the tech giant on four of the 10 non-monetary directions issued by the competition watchdog.
In the CCI’s Android ruling, Google was penalised for abusing its dominant position in Android OS and a provisional penalty of ₹1,337.76 crore was imposed.
Google’s principal ground of appeal before SC is that the NCLAT failed to “properly apply” the effects test to the CCI order in the matter.
Had NCLAT applied the effects test properly, it would have found that Google’s agreements were incapable of causing any anti-competitive effects, the tech giant submitted in its appeal filed with the Supreme Court recently.
Google has submitted to the apex court that NCLAT correctly held that an effects analysis is required to establish a contravention of Section 4 (abuse of dominance) of the Competition Act, but did not properly apply this test to the Commission’s Order.
On its part, CCI had, in its appeal before the apex court, contended that effects analysis is not required to be undertaken under the law.
In its appeal, the CCI has also contested the four remedies set aside by NCLAT, besides maintaining a “provisional penalty” of ₹1,337 crore that could not be confirmed as a “final penalty” as Google did not give true financials.
Put simply, effects-based tests are done to see if a particular business practice of a dominant enterprise has had a harmful effect on competition or not.
Indian competition law does not require the competition watchdog to establish ‘actual effects’ of the anti-competitive conduct of dominant undertakings.
Even the Competition(Amendment) Bill 2023, which was earlier this year passed by both Houses of Parliament, did not include or stipulate “effects analysis” to prove abuse of dominance, despite the Parliamentary Standing Committee batting for it.
CCI has not adopted the “effects doctrine” in adjudicating competition cases.
CCI has taken the stance that when it comes to abuse of dominance, there is no question of proving effects since the ability to cause adverse effects is in-built once an entity is found to be dominant.
CCI has been going by the “likely effect” and not the actual effect of business practice. It has resisted demonstrating the effects of the anti-competitive conduct but went about adjudication based on the intent behind the actions or behaviour.
WHAT GOOGLE SAYS
In its appeal before the apex court, Google has submitted that NCLAT had erred in its assessment of effects in the following respects: (i) NCLAT had ignored the reams of data and evidence submitted by Google that its agreements could not foreclose rivals. It was contended that the Tribunal erred by upholding the Commission’s findings while ignoring this evidence. (ii) Tribunal erroneously relied on Google’s alleged market power to suggest that high market shares themselves demonstrate effects.
