2023 (2) TMI 382 - SC - Law of Competition

Supreme Court Orders Fast-Track Resolution of Appeal, Enforces CCI Compliance Deadline.

The Supreme Court upheld the National Company Law Appellate Tribunal's (NCLAT) decision denying interim relief to the appellants and instructed the NCLAT ... Application for interim stay - principal grievance which was urged, when the appeal was taken up, was that while on the one hand, NCLAT noted that “urgency has been shown in passing interim order”, the appeal has been directed to be listed on 3 April 2023 but there has been no expression of opinion, prima facie, on the merits of the order in appeal with a view to evaluating whether a case for interim stay was made out - HELD THAT:- At the present stage, since the appeal is pending before NCLAT, we are desisting from entering a finding on the merits of the rival submissions which have been urged on behalf of the contesting parties. Any expression of opinion of this Court on the merits would affect the proceedings which are pending before the NCLAT. It would suffice to note that the findings which have been arrived at by the CCI cannot be held at the interlocutory stage to be either without jurisdiction or suffering from a manifest error which would have necessitated interference in appeal. While we are not inclined to interfere with the impugned order of the NCLAT, we would request the NCLAT to dispose of the appeal by 31 March 2023 - we affirm the order of the NCLAT declining to grant interim relief. Appeal disposed off. Issues Involved:1. Appellate jurisdiction under Section 53T of the Competition Act 2002.2. Interim stay on the order of the Competition Commission of India (CCI).3. Directions issued by CCI regarding anti-competitive practices by Google.4. Penalty imposed by CCI on Google.5. Evaluation of CCI's findings on Google's abuse of dominance.Detailed Analysis:1. Appellate Jurisdiction under Section 53T of the Competition Act 2002:The appellants invoked the appellate jurisdiction of the Supreme Court under Section 53T of the Competition Act 2002, challenging the order of the National Company Law Appellate Tribunal (NCLAT) dated 4 January 2023. The NCLAT had admitted the appeal against the CCI's order dated 20 October 2022 but directed the appellants to deposit 10% of the penalty without granting a stay on the rest of the CCI's directions.2. Interim Stay on the Order of the Competition Commission of India (CCI):The principal grievance was that the NCLAT, while noting the urgency, did not express an opinion on the merits of the interim stay application. The NCLAT listed the appeal for final hearing on 3 April 2023 without granting an interim stay. The Supreme Court had the option to remit the matter back to NCLAT or to consider the interim relief itself. It chose the latter to avoid delays.3. Directions Issued by CCI Regarding Anti-competitive Practices by Google:The CCI, in its order dated 20 October 2022, issued several directions under Section 27 of the Act, including:- OEMs should not be forced to pre-install a bouquet of Google applications.- Licensing of Play Store should not be linked with the pre-installation of Google services.- Google should not deny access to its play service apps to disadvantage OEMs and app developers.- Google should not offer incentives for exclusivity of its search services.- Users should be allowed to uninstall pre-installed Google apps and choose their default search engine during device setup.- Google should allow developers to distribute their app stores through Play Store and not restrict sideloading.4. Penalty Imposed by CCI on Google:The CCI quantified the penalty as a percentage of the average turnover for the years 2018-2019, 2019-2020, and 2020-2021. The appellants contested the penalty, arguing that there was no finding of abuse of dominance by Google in India.5. Evaluation of CCI's Findings on Google's Abuse of Dominance:The Supreme Court noted the findings of the CCI regarding Google's dominance and anti-competitive practices, including:- Pre-installation of Google apps creates a behavioral bias and is a significant promotional opportunity for Google.- Google's requirement for OEMs to pre-install its suite of apps under MADA and AFA agreements is anti-competitive.- The tying arrangement of Google using Android to cement its dominance in search services.- The lack of real choice for OEMs, as not signing MADA and AFA would lead to commercial failure.The Supreme Court concluded that these findings cannot be regarded as contrary to the weight of the record at the interlocutory stage. It refrained from expressing an opinion on the merits to avoid affecting the pending proceedings before the NCLAT.Conclusion:The Supreme Court affirmed the NCLAT's order declining interim relief and requested the NCLAT to dispose of the appeal by 31 March 2023. The appellants were given an additional week to comply with the CCI's order. The appeal was disposed of with directions to the NCLAT for early disposal of the appeal.Pending Applications:All pending applications were disposed of.