CCI’s order suffers from ‘confirmation bias’, Google at NCLAT hearing

Google, charged by the Competition Commission of India (CCI) of abusing the dominance of its Android ecosystem, on February 15 told the National Company Law Appellate Tribunal (NCLAT) that the anti-trust regulator’s order suffers from “confirmation bias” and is based on a similar order issued by the European Commission in 2018.

While suggesting that the CCI relied on the EU’s stance, Google said that the regulator’s order has ignored the conditions of the Indian market.

The company alleged that the order was passed on a complaint given by interns from the office of CCI’s Director General (DG), which is the agency’s investigative arm.

According to Google, the CCI’s order failed to demonstrate how the Android ecosystem causes harm to equipment manufacturers in the Indian ecosystem. The order is entirely based on a speculation that that the company will abuse its dominant position, it added.

The CCI order against Google was issued in October 2022, when the regulator held the company responsible for abusing its dominant position in multiple markets in the Android mobile device ecosystem. It levied a penalty of Rs 1,337.76 crore.

Pro-competition policies
Google argued that its pro competition policies led to the development of not just the Android ecosystem but also promoted the usage of smartphones.

The company pointed out that the Android ecosystem has been an exceptional success, which led to a thriving market where there are more than 1,000 original equipment manufacturers (OEMs) globally, over 15,000 models of devices and millions of mobile applications being developed, which in itself is a stream of revenue.

It contended that the ecosystem is now thriving because Google made Android an open source, available for free, and permitted OEMs to use them and build on them.

“Android is a constant work in progress. This contributed to lower the prices of mobile device. Today, average price of mobile at entry level is Rs 1,500 as opposed to Rs 15,000 in 2007, when Google acquired Android,” the company’s lawyer said.

MADA row
Google argued that asking device manufacturers to preinstall the entire Google Mobile Services (GMS) suite under its Mobile Application Distribution Agreement (MADA) does not stop them from pre-installing competing apps. The company further said that MADA is a voluntary agreement and not a compulsory agreement.

The tech giant noted that if an OEM signs MADA, they must preinstall the following: GMS suite which includes apps such as Maps, Chrome and Gmail, among others; Play Store; and Google Search Option.

Arguing about its Anti Fragmentation Agreement (AFA), Google said it was introduced to ensure that devices offering Android as their operating system should have a minimum standard for hardware features such as sound and display.

The tech giant cited the example of Nokia’s Symbian, which was an open source OS like Android but failed because it did not prescribe minimum standard for the hardware of devices that will offer it as operating system. Google said AFA is prescribed because Android operates on ‘write once and run everywhere’ model, whereby once a program is written for Android OS, it can run on all of its devices and models because of basic features available on all devices.

Background of the case
In 2018, Android users alleged before CCI that Google was abusing its dominant position in the mobile operating system-related market in contravention of the provisions of the Competition Act, 2022.

It was alleged that Google asking device manufacturers to preinstall the entire GMS suite under its MADA is an unfair condition. CCI, subsequently ordered an investigation by DG on this issue.

On October 20, 2022, the CCI, based on the DG’s report and other documents filed by both sides, concluded that Google was abusing its dominant position in multiple markets in the Android mobile device ecosystem.

The CCI held that Google can neither force OEMs of smart devices to preinstall its apps nor restrict users from uninstalling such apps. Furthermore, it asked the US-based company not to offer any incentives to OEMs to comply with its conditions.

Google moved the NCLAT in January, but failed to get immediate relief. The company then approached the Supreme Court against the tribunal’s decision. While the apex judicial body refused to intervene in the case, it asked the NCLAT to decide on the matter by March 31, 2023.

The tribunal began its hearing in the case on February 15, and will continue to hear arguments on February 16 and 17. The bench, earlier in the day, indicated that it will consider applications for intervention by companies who are affected by the alleged abusive policies of Google. Moneycontrol