Android dominance: SC refuses to entertain Google's plea against NCLAT order

In a setback to Google, the Supreme Court on Thursday endorsed the order of the National Company Law Appellate Tribunal (NCLAT) declining to grant an interim stay on the imposition of a penalty of Rs 1,337 crore on the US tech giant by the competition regulator for allegedly abusing its dominant position in the Android mobile device ecosystem. The top court said at the interlocutory stage, it would suffice to say that the findings of the Competition Commission of India (CCI) against Google were neither without jurisdiction nor suffering from any manifest error warranting its interference. A bench headed by Chief Justice DY Chandrachud granted a week's time to the US firm to deposit 10 per cent of Rs 1,337 crore penalty imposed on it by the CCI.

The bench, which also comprised Justices PS Narasimha and J B Pardiwala, asked the NCLAT to decide Google's appeal against the competition regulator's order by March 31 this year after charting out the time schedule for the hearing.

"It is suffice to note that the findings which have been arrived at by CCI cannot be held, at the interlocutory stage, to be either without jurisdiction or suffering from a manifest error which would have necessitated interference at the interlocutory stage," it ordered.

The bench, which gave reasons for its order, said, "...while we are not inclined to interfere with the impugned order of the NCLAT, we would request the appellate tribunal (NCLAT) to dispose of the appeal (of Google) by March 31." It directed the parties to move the NCLAT with the certified copy of its order within three working days.

"We request the presiding officer, the President of the NCLAT, to pass appropriate administrative directions indicating a time schedule for early disposal of the appeal on above terms," it said.

Senior advocate AM Singhvi, appearing for Google, requested for time till January 31 for depositing a part of the penalty as directed by the CCI. "Since the appellant is pursuing their interlocutory remedy before the NCLAT and later before this court, time for compliance with the order passed by the CCI is extended by a further period of one week from today. It is clarified that all action taken in the meantime shall abide by the final result of the appeal," it said.

Google had moved the top court against the January 4 order of the NCLAT refusing an interim stay on the competition regulator imposing a Rs 1,337 crore penalty on it.

The NCLAT, however, had admitted the search giant's challenge to the CCI imposing the fine for abusing the dominant position of its Android smart-phone operating system in the country and ordered listing of its plea in April.

At the outset of the hearing, Singhvi said the CCI had not arrived at the finding that Google has abused its dominant position in India.

The top court, in its order, noted that while admitting the appeal, the NCLAT, has directed Google to deposit ten per cent of the penalty quantified by CCI within three weeks and refused to stay the order. Singhvi said while on one hand, the NCLAT noted the urgency on the other it listed the matter for final disposal in April 2023 and hence there was no opinion on the merits of the order.

The senior lawyer said the apex court should decide the application on grant of stay urgently.

The US headquartered firm, during the hearing, said without prejudice, it was ready to partly comply with the order of the CCI. "These may be followed to the following extent- A. Google would ensure unbundling of only search and chrome from Play, chrome from search; In terms of the decision of the EC (European Commission) dated 18 July 2018, Google would ensure that the search app pre installation exclusivity only on portfolio wise RSAs would not be pursued," the top court said while noting the submission of Singhvi. The bench noted that the NCLAT has listed the appeal for final hearing in April and hence, did not hear the case on merits. "This court had the option of either remitting the proceedings to NCLAT or considering whether a case of grant of interim relief is made out. We have adopted the second course of action for two reasons. First, remitting the matter back to NCLAT for a detailed hearing on merits of the application for interim relief would necessitate lengthy arguments, resulting in delay in the final disposal of the appeal in accordance with the time schedule set out in the order of the NCLAT," it said.

Second, since the proceedings are pending before the NCLAT in appeals, this court while assessing the merits of the order of the CCI should, on the basis of prima facie evaluation, determine whether interference at this stage is warranted, it said.

Referring to the findings of the CCI, it said, "These findings cannot be regarded as contrary to the weight of the records at the interlocutory stage." "At the present stage since the appeal is pending before the NCLAT we are desisting from evaluating the merits of the rival submissions which have been urged on behalf of the contesting parties," it said. Any expression of opinion by this court on merits would affect the proceedings which are pending before the NCLAT, it said. Additional Solicitor General N Venkatraman, appearing for the CCI, said Google has been following the similar directions passed by the European Commission in 2018 and here they are having problems. "See their conduct here. It is different. After making necessary changes in Europe, they are doing the opposite in India," the law officer said.

"They are talking about security. So when you do this in Europe, you have no security threat. But in India you have threats. This is indicative of continued market slavery. It is feudalistic," he said.

Senior advocate Mukul Rohatgi, appearing for another firm, said Google has used Android as a vehicle to cement its dominance.

"In 2018, they complied with the same things in the EU which they have not complied with in five years here. This is a developing country so they are taking their time with the law...There is no reason to treat this country and the laws of this country as a third world," he said.

Earlier, the CCI had said the issue pertaining to alleged abuse of dominant position by Google in multiple markets in the Android mobile device ecosystem is of ''national importance'' and the world is looking at how India is dealing with the matter.

The CCI had on October 20 last year asked Google to allow smartphone users on the Android platform to uninstall apps and let them select a search engine of their choice.

That order was to become effective from January 19.

On October 20 last year, the CCI besides slapping the steep penalty on Google had also ordered the internet major to cease and desist from various unfair business practices.

The regulator, which passed the order after having directed a detailed probe more than three years ago, has also asked Google to modify its conduct within a defined timeline.

The CCI, which had started probing the case in April 2019, has directed that Original Equipment Manufacturers should not be restrained from choosing from amongst Google's proprietary applications to be pre-installed and also not be forced to pre-install a bouquet of applications on their smart devices.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)