The National Company Law Appellate Tribunal (NCLAT) has initiated proceedings to address Google’s appeal against a ₹936.44 crore penalty imposed by the Competition Commission of India (CCI). This penalty was levied on Google for its alleged abuse of its dominant position in the app store market ecosystem. The NCLAT has scheduled the hearing for November 28, 2023.
Earlier this year, in January, the NCLAT had denied interim relief to Google in this case and had rejected its challenge against the penalty. Subsequently, Google escalated the matter to the Supreme Court; however, in April, the tech giant withdrew its appeal from the Supreme Court, opting to continue the case within the NCLAT.
In addition to the substantial financial penalty, the CCI’s ruling directed Google to cease engaging in anti-competitive activities. Furthermore, it mandated Google to incorporate third-party billing and payment processing services for in-app purchases. Google was also explicitly instructed not to discriminate against any third-party app or payment processing service.
The CCI’s rationale behind its decision was explained as follows: “If the app developers do not comply with Google’s policy of using Google Play Store, they are not permitted to list their apps on the Play Store and thus, would lose out on the vast pool of potential customers in the form of Android users.”
The CCI further criticized Google’s policy of making access to the Play Store contingent on the mandatory usage of Google Play Billing System (GPBS) for paid apps and in-app purchases. The commission deemed this practice as one-sided, arbitrary, and lacking any legitimate business interest. The ruling also pointed out that app developers were left without the inherent choice to use a payment processor of their preference from the open market.
In response, Google argued that its policies are designed to safeguard users from predatory apps that may expose them to financial fraud, data theft, and various internet-related risks. Google asserted its responsibility for the apps available on the Play Store, highlighting its rigorous malware scans and compliance with local laws. Google expressed concerns that apps sideloaded from other sources may not undergo the same level of scrutiny.
Additionally, Google raised concerns about the proliferation of Android versions, often referred to as ‘forks,’ asserting that this practice undermines the consistent and predictable ecosystem that has benefited users and developers for over 15 years. Google contended that these forks may struggle to maintain the security and user safety features provided by Google, potentially shifting the financial burden to original equipment manufacturers (OEMs). This, in turn, could lead to higher costs for OEMs and potentially more expensive devices for consumers in India.
It’s worth noting that the CCI had imposed two fines on Google for anti-competitive behavior, with the other penalty amounting to ₹1,337.76 crore. The NCLAT had previously upheld the ₹1,333.76 crore penalty on Google, a decision that was subsequently affirmed by the Supreme Court earlier this year.
