Google refused to get interim fine from CCI by NCLAT

In a setback for Google, an appeals court on Wednesday refused to stay the competition regulator, imposing a Rs. 936 crore penalty on the US tech giant for abusing its market dominance.

The National Company Law Appellate Tribunal ordered Google to deposit 10 percent of the fine imposed by the Competition Commission of India in a case related to Play Store rules.

A week ago, Google failed to get relief from NCLAT for separate Rs. 1,337.76 crore fine imposed by the CCI for alleged abuse of the dominant position the US tech giant has in the Android smartphone operating system in the country. He was asked to deposit 10 percent of the fine within four weeks.

Google challenged that order in the Supreme Court, which agreed to hear it on Monday.

While in the first case, the CCI in October last year asked Google to allow Android smartphone users to uninstall apps and allow them to choose a search engine of their choice, the regulator said the company should take corrective steps on the policies it forced developers to use the Google Play billing system to list their apps on the Play Store.

A two-judge bench of NCLAT comprising Justice Rakesh Kumar and Alok Srivastava on Wednesday issued notices to the CCI and posted the matter for hearing on April 17, 2023.

An email sent to Google for comment did not elicit a response.

Senior lawyer Harish Salve said the US firm appealed the Play Store and Android decisions because the Commission failed to account for the adverse impacts on users, developers and manufacturers.

During the NCLAT hearings, Google will try to establish that the CCU guidelines jeopardize the technology, security and choice that Play and Android provide.

It will also seek to establish that the Commission failed to take into account the benefits of Play and Android to Indian end users, including benefits such as enabling mobile access (and thus furthering the objective of increased TV density, which underpins of the Digital India drive) as well as protecting end users from malware and abusive billing practices.

Google’s business model for its Play Store is tied to the business model of app developers. When app developers distribute their apps for free, there is no charge. When app developers sell their apps or sell in-app digital content to end users, Google receives a service fee.

Google says this is done for technical, security and commercial reasons.

On October 25, the CCI imposed a fine of Rs 936.44 crore on Google for abusing its dominant position in terms of Play Store rules. The regulator also ordered the company to cease and desist from unfair business practices and take various measures to address anti-competitive issues within a certain time frame.

Google subsequently said it was “pausing” the requirement that developers use Play’s billing system to purchase digital goods and services for transactions by users in India while it reviews legal options, following the recent CCI ruling.

“Following the recent CCI decision, we are pausing the requirement that developers use the Google Play billing system to purchase digital goods and services for transactions by users in India while we review our legal options and ensure that we can continue to we’re investing in Android and Play,” Google said in a November 1 help center page update.

The search engine giant has faced global criticism for requiring software developers using its app store to use only its own in-app payment system, which charges a commission of up to 30 percent for in-app purchases.

Google is also facing a separate investigation into its business conduct in India’s news content and Smart TV market.

After the CCI’s landmark judgments, Google filed appeals before the NCLAT against the two orders.