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Appeal Against CCI Order To Become Fait Accompli Due To Delayed Hearing In NCLAT, Google Tells SC

NCLAT had, on January 4, declined to stay the order passed by the CCI, after observing that the order was passed on October 20, 2022, but the appeal against it was filed on December 20, 2022

Appeal Against CCI Order To Become Fait Accompli Due To Delayed Hearing In NCLAT, Google Tells SC
POSTED ON January 16, 2023 8:47 AM

Google has approached the Supreme Court, saying its appeal before NCLAT against the CCI order, on abuse of dominant position in the Android mobile device ecosystem, would become a "fait accompli" as the appellate tribunal has refused to put a stay and listed hearing of its plea almost 10 weeks after the tech giant is required to comply with the remedial directions.

The National Company Law Appellate Tribunal (NCLAT) has "failed to appreciate the consequences of denying interim relief" as Google will have to implement changes to the status quo of 14-15 years and its entire business model by January 19, 2023.

This (the CCI order) "requires Google to modify its existing contracts, introduce new licence agreements, and alter its business model and commercial arrangements with thousands of device manufacturers and app developers," submitted Google in its petition before the apex court.

Google's petition further said, the NCLAT "erroneously rejected" its request for interim relief seeking a stay despite a "compelling prima facie case, irreversible and irreparable harm to Google" and demonstrates "non-application of mind, predisposition, and failure" to meet its obligations to preserve an existing and flourishing status quo.

"As a result, absent the Supreme Court's intervention, Google will be required to make far-reaching changes to the Android mobile platform which has been in place for the last 14-15 years, based on the Commission's deeply flawed order - this will lead to lasting and irreparable harm to Google, device manufacturers, Indian consumers, app developers, and the wider Indian mobile economy," said Google.

Google's plea is scheduled to be heard on Monday by the Apex Court, where it has challenged refusing an interim stay by NCLAT over the order of the Competition Commission of India (CCI) imposing a Rs 1,337-crore penalty on the global technology firm.

NCLAT had, on January 4, declined to stay the order passed by the CCI, after observing that the order was passed on October 20, 2022, but the appeal against it was filed on December 20, 2022.

Rejecting it, Google said: "While the remedial directions will come into effect only on January 19, 2023, Google filed an appeal a month earlier on December 20, 2022, within the statutory period of limitation," the petition said.

Google worked "tirelessly to prepare a comprehensive appeal (2,500 pages) taking into account voluminous records (16,000 pages) in response to the impugned order (~300 pages).

"Google cannot be punished for effectively exercising its right of appeal," it said.

The tech major also alleged that NCLAT acted "unlawfully" in conditioning the admission of Google's appeal upon it depositing 10 per cent of the penalty amount.

If the "Commission's order stays, there will be no harm caused to anyone- Google's agreements with phone manufacturers have been in place for the past 14-15 years and none of these manufacturers has complained to the Commission," it added.

The tech giant has also questioned NCLAT's directive for a pre-deposit of 10 per cent of the penalty for hearing over the interim stay and said: "Section 53B of the Competition Act does not prescribe pre-deposit of penalty as a precondition for admitting an appeal."

In October last year, CCI slapped a penalty of around Rs 2,200 crore on Google for anti-competitive practices. It had slapped a Rs 1,337.76-crore fine on Google for exploiting its dominant position with respect to Android, which powers 97 per cent of smartphones in India. It imposed another Rs 936-crore penalty on the US tech giant in a case related to its Play Store policies.

While in the first case, CCI asked Google to allow smartphone users on the Android platform to uninstall apps and let them select a search engine of their choice, the regulator had asked the company to take corrective steps on policies that forced developers to use Google Play's billing system to list their apps on its Play Store.

Currently, one cannot delete apps such as Google Maps or YouTube from their Android phones when they come pre-installed.

Google has not been able to secure relief from the appellate tribunal NCLAT, which asked the company to deposit 10 per cent of the fine within four weeks.

Google has since moved the Supreme Court in the matter of abuse of its dominant position in the Android mobile device ecosystem.
 

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