Indian appellate tribunal confirms abuse of dominance by Google

A.    

Key Findings

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Google abused its dominance in the various relevant markets by effectively mandating OEMs to pre-install the GMS Suite on their devices by bundling the GMS Suite with the OEM’s access to Android OS;

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Google, through a host of agreements with the OEMs, curtailed the developments of Android OS alternatives (i.e., Android Forks) which resulted in the restriction of scientific and technical development, and foreclosure in the OS market; and

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Google, through the pre-installation of (i) its own online general search application and (ii) video streaming application (i.e., YouTube) within the GMS Suite denied market access to competing applications. Accordingly, Google leveraged its dominance in the market for licensable OS to protect its position in the online general search market and YouTube.

B.     

Modifications in remedial directives

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Compulsory access to Google’s Play Store for distribution of third-party app stores: The CCI had directed Google to allow developers of third-party app stores to distribute such stores to users through Google’s Play Store. Noting that the CCI did not find abuse in the Play Store market, the NCLAT quashed the CCI’s direction to Google to list third party app stores which do not conform to Google’s terms and conditions.

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Sideloading of applications: The CCI had directed Google to allow installation of applications not downloaded through its Play Store (i.e., Sideloading). This direction too was overturned by the NCLAT which observed that such direction was not required as Sideloading, by users, is already possible on Android OS through a change in the device settings. The NCLAT noted that prior to sideloading an application, users simply get a warning display which informs users about the risks of sideloading. Google’s contention resonated with the NCLAT which found that “warning displays” prior to sideloading (through changes in settings) are in accordance with certain statutory requirements and therefore, cannot be considered problematic.

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Access to Play Service APIs: The CCI had directed Google to share its Play Service APIs with third party app developers to enable such developers to port their apps to Android Forks. Agreeing with Google’s arguments, the NCLAT set aside this direction noting that unhindered access to such APIs cannot be allowed as the APIs are proprietary software and Google should be permitted to monetise them to retain the incentive to innovate further.

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Uninstallation of GMS Suite: The CCI had directed Google to not restrict the uninstallation of GMS Suite applications by end users. While quashing this direction, the NCLAT reasoned that the GMS Suite can be disabled by end users such that the applications cease to be displayed on the device and cease to have any function. 

C.     

Miscellaneous issues

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In order to establish a violation of abuse of dominance, the CCI must demonstrate that the allegedly abusive conduct had the actual effect of causing appreciable adverse effect on competition in India.

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The NCLAT also addressed the controversial and sensational issue of the CCI extensively relying on the findings of the European Commission in its order. The NCLAT noted that the DG’s extensive collation of data, the appreciation of such data by the CCI and the detailed assessment of relevant data and submissions made before it clearly demonstrated that the CCI did not fall victim to any confirmation bias and concluded that its order is based on independent application of mind.

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The NCLAT also addressed whether the DG investigation could be said to be tainted as “pre-decided” owing to its extensive use of leading questions in the investigative process. The NCLAT clearly established that DG’s function is merely inquisitive in nature to elicit information. Given that the DG was relying on leading questions to merely elicit relevant information and the DG report otherwise is neither lacking objectivity nor ex facie erroneous, the DG vitiated or said to be violative of the principles of natural justice.