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Google search is the money generator, CCI tells NCLAT

The Competition Commission of India argued on Monday before the National Company Law Appellate Tribunal that the various agreements Google signs with smartphone manufacturers are inextricably linked to each other. The regulator underscored this point to justify the conclusions in its October 2022 order.

Google was found guilty by the CCI of abusing its market dominance in the Android mobile device ecosystem and the online search market. The regulator fined the global tech giant Rs 1,377 crore and ordered it to cease and desist from indulging in anti-competitive behaviour.

After the Supreme Court denied the tech major any relief against the competition regulator’s directions, Google LLC is defending its business practices in India’s Android market before the NCLAT.

On Monday, Additional Solicitor General N Venkatraman defended the combined reading of three agreements by the CCI, namely the Mobile Application Distribution Agreement (MADA), the Anti-Fragmentation Agreement (AFA), and the Revenue Share Agreement (‘RSA’). When read together, these arguments have several exclusionary effects, as the CCI concluded.

Venkatraman pointed out that a manufacturer cannot sign MADA without signing the AFA. This means that a manufacturer has to first relinquish its right to produce Android forks before agreeing to embed the pre-installed Google apps under MADA.

Forking is the process of using an open-source software application’s source code to create a completely new programme.

After signing MADA, the manufacturer has to fulfill other conditions, such as the pre-installation of Google apps and their placement, he added.

The ASG questioned that, from a business perspective, when the manufacturers have relinquished their right to produce forks and have pre-installed the applications as per the agreement, why would a manufacturer choose not to sign an RSA and forgo the revenue coming from it?

This is a commercial and business impossibility.
CCI’s Counsel

He further argued that Google Search is at the top of the pyramid in the hierarchy of the pre-installed apps and that all the other apps either manage traffic or data. Google Search is the money generator and can be accessed through various modes on the device, such as written searches and voice commands. “Google Search is made default under all these modes.”

Venkatraman made this argument to show that Google protected its dominant position in the search market by imposing these conditions and thereby safeguarded the majority of the revenue it earns from online advertising, which is directly dependent on the search services offered by it.

Previously, Google had concluded its arguments by saying that:

  • AFA exists so that a baseline standard is maintained across the board on all devices. Under this agreement, Google wanted a system with certain set standards so that an app developer only had to write one version of an app.
  • Certain findings of the CCI’s order are word-for-word copies of the European Commission’s order.
  • The remedies directed by the CCI lack adequate analysis and do not correspond with the findings.

N Venkatraman will continue arguing for the CCI on Tuesday. Bloomberg

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