CCI Order An Unfair Imposition, Rival Apps Not Restricted: Google To NCLAT

Tech giant Google on Friday submitted before the NCLAT that there was "unfair imposition" by the competition watchdog CCI over its mobile app distribution agreement with device makers as it does not restrict from installing other apps, including that of rivals. A two-member NCLAT bench headed by Chairperson Justice Ashok Bhushan on Friday said it will start day-to-day hearing of the matter from February 23, the next date of hearing.

Google while arguing its matter before the National Company Law Appellate Tribunal (NCLAT) said that the placement of its apps on devices through pre-installation under MADA (Mobile Application Distribution Agreement) is not "unfair" as there is no restriction from installing other apps and enough space is available for them.

The appellate tribunal was hearing a plea filed by Google against Rs 1,337 crore penalty imposed by the fair trade regulator CCI for abusing its dominant position in relation to Android mobile devices. Under MADA, OEMs (original equipment manufacturers) are required to have Google Mobile Suite (GMS) while installing the Android OS of Google. This cannot be uninstalled.

Senior Advocate Arun Kathpalia, representing the global IT major said its apps, which are merely pre-installed "does not translate into dominance." There is no embargo on pre-installation on other apps and android users can download apps like WhatsApp, Instagram, Twitter etc from its Play Store as per their choice. In 2021, 26 billion downloads of apps were recorded.Moreover, contrary to this, OEMs are also happy with GMS as they said these apps make their products more sellable, Kathpalia added.

"Where is the harm to the OEM and users in this?," he said adding CCI's order reflects "unfairness." It is not charging any royalty and is ensuring a healthy ecosystem, said Kathpalia. He further said Google does not has a closed system like Apple. "There is huge competition within the Android ecosystem," he added.

On October 20 last year, CCI slapped a penalty of Rs 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. In the October ruling, CCI had also ordered the internet major to cease and desist from various unfair business practices. NCLAT, an appellate authority over the orders passed by CCI, had started its hearing in the Android matter on February 15, following a direction of the Supreme Court. The apex court had directed NCLAT to decide the appeal by March 31.

Earlier, a separate bench of NCLAT had on January 4 issued notice over Google's plea, directing it to pay 10 per cent of the Rs 1,337 crore penalty imposed by the CCI. It had declined to stay the CCI order and put the matter for a final hearing on April 3, 2023. This was challenged by Google before the Supreme Court, which also declined to stay the CCI order but directed the NCLAT to decide on Google’s appeal by March 31.