The condition of pre-installation of the entire GMS (Google Mobile Services) suite by the tech major for mobile phone makers using its Andriod operating system amounts to imposition of unfair condition, appellate tribunal NCLAT said on Wednesday.
This is "an abuse of dominant position by the appellants (Google) resulting in breach" of provisions of the competition law, said the National Company Law Appellate Tribunal (NCLAT) in the finding of its 189-page order in the Android mobile devices case.
"The CCI while returning its finding on breach of Section 4(2)(a)(i) and 4(2)(d) has considered the evidence on record and has returned finding that the conduct of the appellant harms the competition," it said.
MADA (Mobile Application Distribution Agreement), which is primarily about licensing GMS, obligates the OEMs to distribute "Core Applications" upon the OEM (Original Equipment Manufacturer) being granted a licence to distribute Google applications.
NCLAT said it concurs with the findings of CCI as "the conditions which are applied on OEMs through MADA which is essentially to provide Google applications, are in the form of 'supplementary obligations' attracting Section 4(2)(d) of the Act whose contravention is evident."
OEMs also have to sign Anti Fragmentation Agreement (AFA) which requires OEMs to observe baseline compatibility standards. Google also signed Revenue Sharing Agreement (RSA) with OEMs.
"The appellant by making pre-installation of GMS suite conditional to the signing of AFA/ACC for all Android devices manufacturers has reduced the ability and incentive of devices manufacturers to develop and sell self-device operating or alternative version of Android and Android Forks and thereby limited technical and scientific development, which is a breach of provisions," it said.
The NCLAT held that Google "perpetuated its dominant position in the online search market" resulting in the denial of market access for competing search apps in breach of provisions of the Competition Act.
It also observed Google "has leveraged its dominant position in Play Store to protect its dominant position in online general search" and that it has "abused its dominant position by tying up of Google Chrome App with Play Store".
On both these counts, NCLAT held Google had "violated provisions" of the Competition Act.
"Appellant has abused its dominant position by tying up of YouTube App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act," it said.
In all, NCLAT has framed 14 issues based on contentions raised by Google in its petition. The appellate tribunal has given a detailed explanation on each of these issues and outlined its conclusion.
NCLAT also rejected Google's plea that the principle of natural justice was violated by CCI's probe arm DG. Google in its petition had argued the investigation carried against it by the CCI was "tainted", contending that the two informants on whose complaint the fair trade regulator initiated the inquiry were working at the same office that was investigating the tech major.
Rejecting it NCLAT said: "Investigation conducted by the Director General did not violate the principle of natural justice."
It also noted that the CCI order is not vitiated because the Commission did not consist of a judicial member. Google had said that the CCI order should be set aside as it did not consist of a judicial member at the time of passing the order.
NCLAT findings came while deciding on an appeal filed by Google against an order passed by CCI in the android ecosystem matter.
On October 20 last year, the Competition Commission of India (CCI) slapped a penalty of Rs 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. The regulator had also ordered the internet major to cease and desist from unfair business practices.
On Wednesday, NCLAT upheld the orders of the fair trade regulator CCI imposing a penalty of Rs 1,337.76 crore on tech major Google in the Android mobile devices case, with some modifications.
