Google dials NCLAT against CCI's Android order, Rs 1,337-crore fine

Says CCI order presents a major setback for its Indian users and businesses who trust Android's security features

Google has appealed to the National Company Law Appellate Tribunal (NCLAT) against the Competition Commission of India’s (CCI’s) order on unfair practices in the Android mobile device ecosystem. The antitrust body, in October this year, had imposed a fine of Rs 1,337.6 crore on the global technology giant for allegedly abusing its dominant position in relation to the Android mobile ecosystem.

“We have decided to appeal the CCI’s decision on Android as we believe it presents a major setback for our Indian users and businesses who trust Android’s security features, and potentially raises the cost of mobile devices,” said Google spokesperson in a statement.

The statement further said: “Android has greatly benefitted Indian users, developers, and OEMs (original equipment manufacturers), and powered India’s digital transformation. We look forward to making our case and remain committed to our users and partners." 

According to sources, Google in its appeal to the NCLAT has mentioned that the competition panel failed to appreciate the evidence on record from OEMs, developers, and users demonstrating that the open Android business model supports competition for the benefit of all stakeholders, including those in India. 

Google has sought a stay on the CCI’s order, said sources, citing that the decision exposes Indian users to unprecedented security risks -- it would make Android devices in India relatively expensive, less functional, and less safe than they are today. The cost for Indian developers on Android would increase and harm OEMs doing business in India, they said.

Google is optimistic that the appellate tribunal would take into account this “irreparable harm” Android stakeholders would face if a stay is not granted pending the outcome of the appeal, the sources said.

The CCI in October imposed two fines on Google. Other than for the Android mobile ecosystem, it pulled up Google for abusing its dominant position regarding its Google Play policy. For this, the fine imposed on the Big Tech firm was Rs 937 crore.

However, people in the know, said for Google, the bigger concern was the CCI’s stand on the Android mobile ecosystem. “The CCI’s order has gone much further than any regulator has ever penalised or asked of the Big Tech in any other country. The order asks Google to license its proprietary APIs to forked versions of Android. This would mean that the compatibility and ease of creating apps in an ecosystem just going away,” said a source.

The CCI in its order delineated five relevant markets for the matter. These are the market for licensable OS for smart mobile devices in India, app store for Android smart mobile OS in India, the market for general web search services, the market for non-OS specific mobile web browsers and the market for the online video-hosting platform (OVHP).

The CCI, in its press statement, at the time of the order, said that it found “Google to be dominant in all the above-mentioned relevant markets”.

The antitrust body concluded that mandatory pre-installation of entire Google Mobile Suite (GMS) under the mobile application and distribution agreement (with no option to uninstall the same) and their prominent placement amount to the imposition of an unfair condition on the device manufacturers and thereby in contravention of the provisions of Section 4(2)(a)(i) of the Act.

Some of the measures that the CCI recommended included 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.

Google in a statement then said: “Indian developers have benefited from the technology, security, consumer protections, and unrivalled choice and flexibility that Android and Google Play provide. And by keeping costs low, our model has powered India's digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate next steps.”