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Informist, Friday, Mar. 28, 2025

 

--NCLAT reduces CCI's penalty against Google to INR 2.17 bln 

--CONTEXT: NCLAT on Google's plea against CCI's INR 9.36 bln penalty 

--CONTEXT: CCI had levied penalty on Google for abuse of dominant position 

 

NEW DELHI – The National Company Law Appellate Tribunal on Friday reduced the penalty imposed by the Competition Commission of India against Google Inc. and its related companies to INR 2.17 billion from INR 9.36 billion. The appellate tribunal reduced the penalty as violations under Section 4(2)(a)(ii), 4(2)(b), and 4(2)(c) Competition Act, 2002, were not proved against Google. 

 

The competition watchdog, in 2022, had imposed the penalty against Google and its companies, for abusing its dominant position in multiple markets in the Android mobile device ecosystem. The petitioners having deposited 10% of the penalty in its appeal should deposit the rest of the amount within 30 days, said the appellate tribunal. 

 

The appellate tribunal upheld the competition watchdog's order that Google making access to the play store, for application developers, dependent on mandatory usage of google play billing system for paid apps and in-app purchases constitutes an imposition of unfair conditions on app developers. Application developers had been using different payment mechanisms with respect to their paid apps and in-app purchases and requirement of all developers to accept google play billing system is discriminatory condition which discriminate the developers to use any other payment system, said the appellate tribunal.

The appellate tribunal agreed with competition watchdog's view that Google was found to be leveraging its dominance in market for licensable mobile operating system and app stores for Android operating system, to protect its position in the market for Android in-app payment processing in violation of the provisions of Section 4(2)(e) of the Competition Act, 2002.

 

However, the appellate tribunal ruled that requirement of payment of commission or fee by the app developers to the extent of 15-30%, which fee was not being paid by YouTube for which payment processor was engaged by Google on payment of 2.3% was not discriminatory. The appellate tribunal held that the practices followed by Google did not amount to limiting technical development in the market for in-app payment processing services and was therefore not in violation of the provisions of Section 4(2)(b)(ii) of the Act.

 

The appellate tribunal said that it cannot be said that Google has abused its dominant position in the app store market to cause denial of payment processing. "We, thus, find that no violation of Section 4(2)(c) was proved and the Commission's finding that Appellant being dominant in app store market has caused denial of market access to the payment processors and aggregators is unsustainable," said the appellate tribunal.

 

Further, the appellate tribunal upheld the Competition Commission's directions which asked Google to allow, and not restrict app developers from using any third party billing or payment processing services, either for in-app purchases or for purchasing apps. The appellate tribunal noted that Google shall also not discriminate or otherwise take any adverse measures against such apps using third party billing or payment processing services, in any manner. 

 

Google shall not impose any anti-steering provisions on app developers and shall not restrict them from communicating with their users to promote their apps and offerings, in any manner, said the appellate tribunal. Google shall not restrict end users, in any manner, to access and use within apps, the features and services offered by app developers, the appellate tribunal said. It also upheld the order by the competition watchdog asking Google to not discriminate against other apps facilitating payment through UPI in India vis-a-vis its own UPI app, in any manner.

 

However, the appellate tribunal rejected the Competition Commission's order which asked Google to set out a clear and transparent policy on data that is collected on its platform, use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities, including related entities. The appellate tribunal set aside the watchdog's order that competitively relevant transaction or consumer data of apps generated and acquired through Google Play Billing System, shall not be leveraged by Google to further its competitive advantage. 

 

Giving relief to Google, the appellate tribunal rejected the order asking it to provide access to the app developer of the data that has been generated through the concerned app, subject to adequate safeguards. In addition, the appellate tribunal set aside the order which asked Google to not impose any condition (including price related condition) on app developers, which was unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers. It dismissed the Competition Commission’s order that said Google should ensure complete transparency in communicating to app developers, services provided, and corresponding fee charged.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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