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2023 (4) TMI 173
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....l Vijay Kumar, Mr. Ram Narayan, Mr. Madhav Gupta, Advocates for CCI/R-1 Ms. Shama Nargis, DD/CCI, Mr. Davander Prasad, DD/CCI, Ms. Shweta Gupta, YP/CCI Mr. Abir Roy, Mr. Vivek Pandey, Mr. Aman Shankar, Ms. Sukanya Viswanathan, Mr. T. Sundar Ramanathan, Advocates for Impleader in I.A Nos. 327 & 336 of 2023. Mr. Amit Sibal, Sr. Advocate with Mr. Naval Chopra, Mr. Yaman Verma, Mr. Aman Singh Sethi, Ms. Shally Bhasin, Ms. Raveena Lalit, Ms. Prerna Parashar, Ms. Parinita Kare, Mr. Shivek Endlaw, Mr. Rohan Bhargava, Mr. Prateek Yadav, Mr. Rishabh Sharma, Mr. Saksham Dhingra, Mr. Darpan Sachdeva, Advocates in I.A. No. 630 of 2023 Mr. Rajshekhar Rao, Sr. Advocate, Mr. Naval Chopra, Mr. Yaman Verma, Mr. Aman Singh Sethi, Mr. Ajit Warrier, Ms. Raveena Lalit, Ms. Prerna Parashar, Ms. Parinita Kare, Mr. Prateek Yadav, Mr. Prateek Gupta, Mr. Shivek Endlaw, Ms. Shally Bhasin, Mr. Darpan, Mr. Rohan Bhargava, Mr. Harshil Wason, Mr. Yashraj Samant, Ms. Chandini Anand, Advocates in I.A. No. 232 of 2023 JUDGMENT ASHOK BHUSHAN, J. This Appeal by two Appellants - Google LLC and Google India Pvt. Ltd. (hereinafter referred to as 'Google') has been filed challenging the order dated 20.10.2022 pass....
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....2 of the Treaty of the Functioning of the European Union. The EC took a decision on 18.07.2018 which found Google having abused its dominant position in the relevant market in the European Union. European Commission imposed penalty and fine on Google. iii. On 28.08.2018, Respondent Nos. 2 to 4 to this Appeal viz. Umar Javeed, Sukarma Thapar and Aaqib Javeed filed information under Section 19(1)(a) of the Act, 2002 before the Competition Commission of India. Informants claimed to be users of android based smartphones. The Informants stated that the majority of the smartphones and tablet manufacturers in India use Google Android System. Informants stated in their information that Google is dominant in India. The Informants delineated four distinct relevant markets i.e., (i) Licensable Smart Mobile OS; (ii) App Stores for Android Mobile OS; (iii) Online Video Hosting Platform ( OVHP ); and (iv) Online General Web Search Service. India was stated to be relevant geographical market in the application. Informants alleged that Google is engaged in different kinds of anti-competitive practices. Allegations alleging violation of Section 4 r/w Section 32 of the Act, 2002 were made to in the....
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....s prima facie opinion in the order that mandatory pre-installation of entire GMS suite under MADA amounts to imposition of unfair condition on the device manufacturers and is thereby contravention of Section 4(2)(a)(i) of the Act. vi. After order dated 16.04.2019 passed by the Commission under Section 26(1) of the Act, the Director General commenced inquiry under Section 19 of the Act. vii. Director General issued several notices to Google requesting for information. Google responded to various notices and submitted its comprehensive response. viii. Notices were also issued to the Informants by the Director General. The Director General also sought information from third parties including mobile handset manufacturers (both Indian & foreign brands) who install Android OS and Google apps & services in their handsets for Indian market. Third parties who are active in the Indian market relating to app stores for Android OS, online general web search service and web browser were also approached by the Director General for seeking information and data clarification. Information was also gathered by the Director General from key app developers in India and key players in the online vid....
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....uffered by third parties app developers due to the arbitrary conduct on part of OPs etc., it appears that Google's aforesaid behaviour, including the terms and conditions discussed above, amounts to the imposition of an unfair or discriminatory condition, limiting and restricting the technical and scientific development of apps to the prejudice of users, and in the denial of market access by Google in violation of Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act." xi. In Chapter 10, conclusion of the Director General was separately recorded and Director General in Para 10.18 stated: "10.18 To sum up, Google is found to be contravening the provisions of Section 4(2)(a)(i); Section 4(2)(b); Section 4(2)(c); Section 4(2)(d) and Section 4(2)(e) of the Act." xii. The Report of the Director General dated 29.06.2021 was considered by the Commission on 06.10.2021. On 06.10.2021, the Commission directed for forwarding an electronic copy of the non-confidential version of the investigation report to the parties i.e. the Informant and Google, for filing their respective objections/ suggestions. An electronic copy of the confidential version of the investigation report was also for....
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....allation of entire GMS suite under MADA (with no option to un-install the same) and their prominent placement amounts to imposition of unfair condition on the device manufacturers and thereby in contravention of the provisions of Section 4(2)(a)(i) of the Act. These obligations are also found to be in the nature of supplementary obligations imposed by Google on OEMs and thus, in contravention of Section 4(2)(d) of the Act. 614.2. Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Section 4(2)(c) of the Act. 614.3. Google has leveraged its dominant position in the app store market for Android OS to protect its position in online general search in contravention of Section 4(2)(e) of the Act. 614.4. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in non-OS specific web browser market through Google Chrome App and thereby contravened the provisions of Section 4(2)(e) of the Act. 614.5. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its pos....
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.... or any other application of Google. 617.3. Google shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors. This would ensure interoperability of apps between Android OS which complies with compatibility requirements of Google and Android Forks. By virtue of this remedy, the app developers would be able to port their apps easily onto Android forks. 617.4. Google shall not offer any monetary/ other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services. 617.5. Google shall not impose anti-fragmentation obligations on OEMs, as presently being done under AFA/ ACC. For devices that do not have Google s proprietary applications pre-installed, OEMs should be permitted to manufacture/ develop Android forks based smart devices for themselves. 617.6. Google shall not incentivise or otherwise obligate OEMs for not selling smart devices based on Android forks. 617.7. Google shall not restrict un-installing of its pre-installed apps by the users. 617.8. Google shall allow the users, during the initial device setup, to choose their default search engine for all se....
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.... per the Scheme of Section 4, dominant position itself is not prohibited. What is prohibited is abuse of dominant position and for establishing abuse, the Commission must prove the same. The Commission has not undertaken any analyses as required by Section 4 in the impugned order. It is submitted that what is prohibited under Section 4, sub-section (2) (a) is imposition of unfair or discriminatory conditions in purchase or sale of goods or services. A conduct shall be unfair or discriminatory only when it is anti-competitive. The Commission has come to the conclusion that MADA contains unfair conditions, which is incorrect conclusion. MADA is not imposed on OEM. The concept of imposition contains a compulsion, there is no compulsion on OEM to enter into any MADA Agreement with Google. The MADA is an optional and per device Agreement. The MADA is voluntary and once signed, OEMs can choose whether to preinstall the GMS suite on any given device. The terms of the MADA are not imposed on device manufacturers. The Commission's finding that pre-installation of the entire GMS suite, prominent placement of Apps and inability to uninstall are unfair conditions under the MADA are incorrect. ....
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....DA. MADA's terms are fair on OEMs because they do not restrict non-Google Apps from being preinstalled on OEM's devices. In evidence, the Commission, itself noted that Stores like Galaxy, Xiaomi, Huawei, Oppo are preinstalled by OEM along with play store of Google. Competing browsers are also preinstalled by OEM. Various competing browsers preinstalled in devices of different manufacturers. The users are free to disable a preinstalled App in their device. Inability to uninstall Apps does not constitute an unfair term on OEMs nor does it impact competition. To answer the question that was asked to OEMs that if they face possible dilemma in terms of allowing installation of competing Apps with apprehension of causing duplication of Apps and filling up precious ROM space (in addition of Google's), several OEMs have given a response that they do not have any dilemma. The Commission also erred in holding that GMS Apps are "must have" Apps. The expression "must have" has been coined by the Commission without there being any basis or material. The Commission has found that Play store is a "must have" app because it is significant from the point of view of a common mobile user, who conside....
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....M. In the impugned order, the Commission has observed that AFA/ ACC obligations result in reduced incentives for OEMs to distribute "Forked Android" version. The Commission's observation regarding AFA/ACC is unfounded. Google being aware of the risk of the fragmentation inherent in open business model, it adopted the AFA before the launch of the Android device to address this threat. The Commission also failed to appreciate the evidence, which proves failure of Symbian OS, an open-source platform, which did not implement any minimum compatibility standards. The objective of minimum compatibility is that any app writer can write an app, once and it would run on every device within the ecosystem. An "Android Fork" is a device, which uses the Android OS, but does not meet the compatibility requirements as laid down in CDD (Compatibility Definition Document). The compatibility requirement under the CDD is minimal and narrow. The AFA/ACC signatories are free to differentiate and innovate on top of these minimal baseline requirements and have in fact done so. The innovation has been done by Samsung and Oppo releasing devices which has foldable screen and pop-up cameras. There is no embar....
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....air terms on OEM by MADA and RSA. The MADA and RSA has to be separately looked into, both being different Agreements. Only there are six RSAs, wherein OEMs entered into Agreement with Google. OEMs have other Agreement with other service providers. Xiaomi entered into RSA with Bing in 2018. The MADA is complete agreement with the matters it deals with. The RSA is optional. Two contracts can be read together only when they are part of the same transaction. 8. Coming to Android Fork, Shri Kathpalia submits that Commission has found violation of Section 4(2)(b) (ii) of the Act by observing that Google, by preinstallation of proprietary Apps and conditional upon signing of AFA/ACC for all Android devices, has reduced the incentive of device manufacturers to develop and sell devices operating on alternative versions of Android, i.e., Android Forks. Google has legitimate interest in licensing its Apps only for those devices which meet the minimum requirement set by it, which is also an observation made by the Commission. The Commission has in its order observed that the technical and scientific development has been limited by Google. The Commission has relied on the evidence of the Amazo....
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.... browser was downloaded on 79% Android devices in 2018. On Desktop, Chrome is not preinstalled, but 86% of users downloads Chrome. Ninety percent users prefer using Chrome because of its better quality. The commission ignored that from 2018 to 2020 more than 90% of top 25 selling devices in India preinstall rival browsers. Default setting does not deny market access to competitors and users are free to switch away from the default settings, if they so choose. 11. Shri Kathpalia submits that Commission has erred in concluding that Google had leveraged Play Store in the App Store market for Android to strengthen Google Search position in the online search market. He submits that MADA does not restrict OEMs from preinstalling competing search services on their devices. The Commission's conclusion that competing search services are foreclosed due to MADA and preinstallation of Google search is incorrect. Both OEMs and users had submitted that they prefer Google search over other search engines due to its superior quality. The Commission's observation that Google had significant market share, which it secured through preinstallation of Google Search, giving it an unassailable position ....
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....ontained in paragraph 617.10, it is submitted that there is no finding of abuse of dominance. It is submitted that Google does not prohibit sideloading. It only issues warnings. Warnings are issued by Google to save the user from malware and harm. Coming to the direction issued under paragraph 617.3, Shri Kathpalia submits that Google cannot be asked to share APIs which are intellectual property of Google. Directing sharing of the API by Google shall stop all innovation and discourage technical advancement. The direction was to share the API with Android Forks. Coming to direction in paragraph 617.5, it is submitted that the obligation imposed on OEM, AFA/ACC is to make the device compatible. There is no restriction on the OEM to develop Android Forks for themselves. There is no basis for issuing direction under 617.7 regarding restriction on un-installing of its pre-installed Apps as the same can be disabled by the user and on doing so, it will disappear from the screen. Directions issued in paragraph 617.8 was also unnecessary. Several other remedies allowed by the Commission in paragraph 617 are not covered by any finding. With regard to direction under paragraph 617.1, it is su....
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....before the Court. It is submitted that framing of these questions clearly demonstrate that investigation was conducted not in an objective manner and DG wanted to elicit the answer, which was indicated by the question itself. The Commission also in its order has ignored the aforesaid aspects. The DG's conduct is in violation of the principles of natural justice. The Commission by condoning such leading questions to elicit adverse statements against Google for reaching the pre-decided conclusion has also erred. The DG as well as the Commission were independently duty bound to base their findings after due consideration of all the evidence on record, including various statements made by OEMs in support of Google's business model. The DG failed to consider such evidence, which was supportive of Google business. The Commission in the impugned order, has also not independently and objectively considered the evidence on record. The DG in the present case has mechanically relied upon the proceedings before the European Commission, which is demonstrated from the fact that even the submissions/ contentions of various parties before the European Commission have been replicated by the DG, ver....
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....ct to which allegation of violations were made could have been taken, if at all. It is submitted that revenue of the Appellant regarding Desktop and PC cannot be taken into consideration, since the said revenue is beyond the market which were under consideration before the DG and the Commission. Shri Maninder Singh submits that penalty and fine imposed are disproportionate and deserve to be interfered with. It is submitted that whole exercise indicates that both the DG and the Commission had considered the issues with pre-determined mind and entire proceeding is replete with confirmation bias. 17. Shri Maninder Singh, learned Senior Counsel submitted that impugned order has been passed in absence of a Judicial Member, which is a mandatory requirement under the law, where adjudicatory functions are being carried out. It is submitted that Hon'ble Supreme Court has emphasised the requirement of a Judicial Member in the Commission, which discharges judicial/ quasi-judicial functions. 18. Shri N. Vankataraman, learned Additional Solicitor General of India, assisted by Shri Samar Bansal has advanced arguments on behalf of Competition Commission of India. Replying to the submission of l....
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....o have signed the ACC will get Google bundle of Apps. The MADA provides for tying of bundling arrangement. Anyone who has taken Apache open license cannot produce a device with Android Fork, since it will be a handicap in denying access to Google 11 Apps either bundled or as independent Apps. By signing AFC/ACC by OEM, AOSP becomes closed license. Eleven core Applications are re-bundled together and pre-installed by Google on OEM devices. All eleven Google core Applications are placed at the default home screen. The MADA provides that MADA devices are those, which can run only Android OS and are approved by Google. The learned ASG has referred to various clauses of the MADA to support his submission. The clauses in MADA provides that OEM Companies need no obligation to install Google Application on any of its Android device is an empty concession that has no bearing on the abusive conduct of Google. The MADA clauses make Google's 11 bundled core Applications as must have Apps by every OEM using Google Android OS. The above clauses operate as behavioural bias in the form of status quo bias. The clauses in MADA provide no "exclusivity" is a misnomer. 19. Coming to the Revenue Sharin....
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....ensure that Google Search is both the default and exclusive search service on Android devices. The submission of the learned Senior Counsel that RSA is an optional Agreement is contrary to the factual scenario. Google sets out the monetary incentives offered to OEMs to promote Google Search as a default and exclusive search service. The impugned order has correctly pointed that vast amount of monetary incentives offered by Google to OEMs to enter into RSAs ensures that Google Search is set as the default and exclusive search service on all MADA Android devices. 20. Shri Venkataraman submits that Clause 2.4.3 of RSA read with Exhibit D grants certain exemptions to certain jurisdictions like the European Economic Area, Russia, Turkey and Korea from the rigours of exclusivity, which is otherwise imposed on the rest of countries where the Agreement extends. 21. Shri Venkataraman elaborating on ACC submits that by Clauses in the ACC, Google prohibits OEMs, who sign ACC to produce Android Forks on any and all of its devices based on Android. The ACC also requires that any Android-based software developed OEM's hardware should be compatible. The Clauses of ACC makes the Apache open lice....
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....vasive, Google has created significant disincentives and entry barriers for any enterprise, considering distributing a Fork. AFA is a supplementary obligation imposed to further Google's tying objective under the MADA. Google has maintained and strengthened its dominant position through the AFA/ACC, which restricts competition within the larger Android ecosystem. Google is a virtual monopolist in the licensable smart device OS. The Commission has, after detailed analyses, found that Google has reduced ability and incentive of OEMs to develop and sell devices operating on Forks and thereby limited technical or scientific development to the prejudice of the consumers, in contravention of Section 4(2)(b)(ii). 23. Shri Venkataraman further submits that a special responsibility is cast by the statute on a dominant player. The competition law is a law enacted in public interest to protect the consumers and other stakeholders. The dominant player has onerous duties and anything anti-competitive is bad. The learned ASG submits that Google is not only dominant, but super dominant and a dominant player is supposed to do self-policing and failure to discharge special responsibilities leads t....
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.... learned ASG further submits that Google must permit side-loading. Google imposes excessive restriction, which have severely impacted Google's competitors, who side-load competitive Apps on Android OS. Direction to Google to allow listing of third party Apps in its Play Store is also in consonance with the findings returned by the Commission. 26. Replying to submission of learned Counsel for the Appellant on imposition of penalty by the Commission on the ground that Commission has not taken into consideration the relevant turnover, the learned ASG submits that all relevant facts have been taken into consideration by the Commission while imposing fine. It is submitted that relevant turnover as laid down by the Hon'ble Supreme Court has been noticed by the Commission. Thereafter, the Commission proceeded to analyse relevant turnover in the light of the principles laid down. The Commission rightly rejected Google's argument that only the revenue generated from the usage of Googles Search or YouTube through access points should be considered for relevant turnover for calculation penalty. The Commission has directed Google to submit financial data duly certified by Chartered Accountant....
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.... directed by the Commission flows from the conclusion of the Commission. Shri Amit Sibal has also referred to Section 27, sub-clause (g), which empowers the Commission to pass such orders as it may deem fit. It is submitted that Section 27 (g) gives ample powers to the Commission to pass any order as measure of penalty. Google's policy of exclusion of third parties Apps is without any basis. There is Google Play Store on 98.4% mobile devices. Referring to the obstacles of sideloading, Shri Sibal submits that sideloading is confronted with 13 steps. In PC, there are no restrictions in downloading the Apps. The only reason to do this is to cement the dominance of Google. 29. Shri Abir Roy, learned Counsel appearing for the Applicant in I.A. No.327 and 336 of 2023 on behalf of C.E. Info Systems Ltd. and Alliance of Digital India Foundation respectively, submits that the Applicant has appeared before the DG. It is submitted that Applicant had developed it App Store in 12 Indian languages. The Applicant is an Indian App developer. 30. Shri Rajshekhar Rao, learned Senior Advocate has appeared for OSlabs Technology (India) Pvt. Ltd., IA No.232 of 2023. It is submitted that the applicant....
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.... Appellants conduct being anti-competitive? 4. Whether the Appellants by making pre-installation of GMS Suite conditioned upon signing of AFA/ACC for all Android Device Manufacturers (OEMs) has reduced the ability and incentive of the OEMs to develop and sell devices operating on alternative versions of Android i.e., Android Fork and thereby limited technical and scientific development which is breach of the provisions of Section 4(2)(b)(ii) of the Act? 4a. Whether the Commission while returning its finding on breach of Section 4(2)(b)(ii) has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? 5. Whether the Appellant has perpetuated its dominant position in the Online Search Market resulting in denial of market access for competing Search Apps in breach of Section 4(2)(c) of the Act? 5a. Whether the Commission while returning its finding on breach of Section 4(2)(c) has not considered the evidence on record and has not returned any finding regarding the Appellant's conduct being anti-competitive? 6. Whether Appellant has leveraged its dominant position in Play Store to protect its dominant posit....
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....t in which business can thrive and innovate keeping pace with new age development in digital market. The Indian economy has transformed into one of the largest and fastest growing economies in the world. Competition is now mainstream in Indian political economic philosophy. The Commission performs diverse functions, involving investigation, inquiry and adjudication, which requires a complex and sensitive approach, compatible with principles of natural justice. The scheme of the Competition Act, 2002 indicates that Commission has positive duty to eliminate all practices which have an adverse effect on competition. The Commission should promote and sustain competition and also protect the interest of the consumers. Issue No.1 36. We may first notice statutory scheme under the Competition Act, 2022. The Competition Bill 2001 was introduced in the Lok Sabha. The Competition Bill sought to ensure fair competition in India by prohibiting trade practices, which cause Appreciable Adverse Effect on Competition ("AAEC") in India. The Statement of Objects and Reasons reads: "Statement of Objects and Reasons.-In the pursuit of globalisation, India has responded by opening up its economy, r....
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....in India. (2) Any agreement entered into in contravention of the provisions contained in subsection (1) shall be void. (3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which- (a) directly or indirectly determines purchase or sale prices; (b) limits or controls production, supply, markets, technical development, investment or provision of services; (c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; (d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production....
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....ht Act, 1957 (14 of 1957); (b) the Patents Act, 1970 (39 of 1970); (c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999); (d) the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999); (e) the Designs Act, 2000 (16 of 2000); (f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000); (ii) the right of any person to export goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export. 4. Abuse of dominant position.-(1) No enterprise or group shall abuse its dominant position. (2) There shall be an abuse of dominant position 4 [under sub-section (1), if an enterprise or a group] - (a) directly or indirectly, imposes unfair or discriminatory- (i) condition in purchase or sale of goods or service; or (ii) price in purchase or sale (including predatory price) of goods or service. Explanation.- For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discri....
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....o any alleged contravention of the provisions contained in sub-section (1) of Section 3 or sub-section (1) of Section 4. Section 19, sub-section (1), (3) and (4) are as follows: "19. Inquiry into certain agreements and dominant position of enterprise.--(1) The Commission may inquire into any alleged contravention of the provisions contained in subsection (1) of section 3 or sub-section (1) of section 4 either on its own motion or on - (a) receipt of any information, in such manner and accompanied by such fee as may be determined by regulations, from any person, consumer or their association or trade association; or (b) a reference made to it by the Central Government or a State Government or a statutory authority. (3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section 3, have due regard to all or any of the following factors, namely: - (a) creation of barriers to new entrants in the market; (b) driving existing competitors out of the market; (c) foreclosure of competition by hindering entry into the market; (d) accrual of benefits to consumers; (e) improvements in production or distribution of ....
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....bmitted that conducting effect analysis is thus requirement of law. The learned ASG, refuting the submission of the Appellant, submitted that the scheme of Section 3, 4 and 6 are different. In Section 3 and 6, analysis of "an appreciable adverse effect on competition within the relevant market in India" is a statutory requirement. There is no such provision made in Section 4 of the Act. It is submitted that Section 4, sub-section (1) is echoed in an injunctive term, providing that no enterprise or group shall abuse its dominant position and sub-section (2) of Section 4 provides that there shall be an abuse of dominant position under sub-section (1), if an enterprise or a group's conduct is found to contravene as enumerated in sub-clauses (a), (b), (c), (d) and (e). It is submitted that requirement of law is the conduct, which is covered by sub-section (2) of Section 4, per se, lead to violation of Section 4, sub-section (2) and no effect analysis is required to be undertaken. The learned ASG submits that even if in some cases Commission has conducted effect analysis that was not the requirement of law and this Tribunal may hold that no effect analysis is required under Section 4 of....
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.... as follows: "135. Having given due regard to the aforesaid rival contentions of the parties, the Commission observes that Section 4(2)(a)(i) primarily covers exploitative conduct within its ambit. While dealing with a case involving exploitative conduct inflicted upon a consumer, the mere existence of such conduct may fulfil the criterion embedded under Section 4(2)(a)(i) of the Act. Thus, the existence of an unfair condition may amount to a contravention of the provisions of Section 4(2)(a)(i) of the Act. However, examination of exploitative conduct which involves imposition of an unfair condition by a dominant enterprise in a B2B transaction is essentially to undertake a fairness or reasonability test, which requires examining both how the condition affects the trading partners of the dominant enterprise as well as whether there is any legitimate and objective necessity for the enterprise to impose such condition. Appreciation of the context and rationale becomes all the more important in the cases of buyer power, lest it increase the risk of large industrial buyers being penalised for what may be an attempt to negotiate competitive terms with suppliers or simply a prudent bus....
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.... - 2014 SCC OnLine Comp AT 3, where the Competition Appellate Tribunal set aside the decision of the Commission imposing the penalty by holding that there was no effect on the downstream market and ultimate consumer did not suffer on the account of the prices of Schott Kaisha. In paragraph 55, following has been observed: "55. These facts should have been enough to hold that there was no effect on the downstream market and ultimate consumer did not suffer on the account of the prices of Schott Kaisha and others being similar or the same. Though different or more discount was made to Schott Kaisha by the Appellant, it did not ultimately effect the downstream market at all and in this behalf the principles involved in Article 82 of EU Treaty as also the provisions of the US Robinson Patman Act should have been adhered to." 48. The Competition Commission of India's judgment in Harshita Chawla and Ors. vs. WhatsApp - 2020 SCC OnLine CCI 32 has also been relied upon where the Competition Commission of India while examining provisions of Section 4(2)(a)(i) and 4(2)(a)(d) has held that one of the conditions is that tying is capable of restricting/ foreclosing competition in the market.....
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....d tied products are two separate products; (ii) the entity concerned is dominant in the market for the tying product; (iii) the customers or consumer does not have a choice to only obtain the tying product without the tied product; and (iv) the tying is capable of restricting/foreclosing competition in the market. 49. Another judgment relied upon is of Competition Commission of India in Case No.33 of 2014 in XYZ vs. REC Power Distribution Company Ltd. wherein dealing with Section 4, sub-section (2)(c), the following has been held in paragraphs 6.37 and 6.40:- "6.37 As per Section 4(2)(c) of the Act, there shall be an abuse of dominant position under sub-section (1), if an enterprise or a group indulges in practice or practices resulting in denial of market access in any manner. Any conduct under Section 4(2) (c) of the Act requires an establishment of two components--firstly, there should an indulgence in a practice (s) i.e. there should be a conduct; and secondly, that the conduct should have resulted in a denial of market access i.e. anti-competitive effect/distortion in the market in which denial has taken place. 6.40 The second element in the enquiry of a case under denial....
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....in the relevant market. Thereafter, it is required to establish that it has engaged in a conduct as specified in clauses (a) to (e) of the section. Once both are established, there is no statutory requirement to examine any other additional impact on competitors or consumers or the market. The Commission, in its order has amply established the aforementioned two questions. Section 4 of the Act, unlike section 3 does not require evaluation of appreciable adverse effect on competition (AAEC) or evaluation of the factors mentioned in section 19(3), which include "accrual of benefits to consumers". 51. It is submitted that the said judgment has also been affirmed by COMPAT vide its judgment in National Stock Exchange of India vs. Competition Commission of India - 2014 SCC OnLine Comp AT 37. It is true that above judgment of the Commission was affirmed by the COMPAT, but what was said in paragraph 25.1 has not been either specifically affirmed or departed. 52. The learned ASG relied on a judgment of Court (Fifth Chamber) in Servizio Elettrico Nazionale relied on paragraphs 53, 54 and 123, which are to the following effect: "53. That being said, it must be borne in mind that the char....
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....did not have the power to define the conduct of its subsidiaries and that those subsidiaries were acting independently." 53. It was held in the above case that when a dominant position is abused by one or more subsidiaries belonging to an economic unit, the existence of abuse by one unit is sufficient to arrive at the finding that the parent company is also liable for that abuse. In the above judgment itself in order passed in paragraph 124 clearly mentioned that the evidence adduced by the undertaking in question shows that the conduct has not produced actual restrictive effects. Paragraph 124 - 1, 2 and 3 are as follows: 124. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Fifth Chamber) hereby rules: 1. Article 102 TFEU must be interpreted as meaning that, in order to establish whether a practice constitutes abuse of a dominant position, it is sufficient for a competition authority to prove that that pr....
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....e, in the relevant market, which, in this case is the National Capital Region (NCR), which: (1) enables it to operate independently of the competitive forces prevailing; or (2) is something that would affect its competitors or the relevant market in its favour." 56. It has been held in the above judgment that abuse of dominant position by an enterprise is something that would affect its competitors or the relevant market in its favour. 57. We may, in this connection, also refer to the Report of Competition Law Review Committee (July 2019), a Committee set up to review the Competition Act. The Committee has in its Report dealt separately under heading in paragraph 4 "Rule of Reason in Finding of Abuse". The Committee in paragraph 4 has noted the decisional practice of the Commission, where Commission in some cases followed per se approach, while in several other cases, entered into effects-based analysis. The Report also notices the decisional practice of EU Courts and noticed the effects-based analysis adopted in different Forums. In paragraphs 4.1 to 4.10, the Committee captured the issue in following words: "4. RULE OF REASON IN FINDING OF ABUSE 4.1. A list of actions which....
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.... a competitive disadvantage against each other leading to competitive injury in the downstream market." The COMPAT found the CCI had wrongly ignored the second limb and that the evidence showed there was no effect on the downstream market and the ultimate consumer did not suffer as a result of the alleged conduct. In this case, not only was an effects based analysis undertaken but the objective justifications raised by the parties to justify their conduct were also considered. 4.5 It was also brought to the Committee's attention that, based on a plain reading of the statute, appellate authorities have interpreted the clauses in Section 4(2) broadly in certain cases. For instance, in a recent judgment, the Supreme Court held that Section 4(2)(c) is worded broadly enough to account for restraining entry of enterprises from the market even when they're not competitors.311 However, the Committee noted that though the scope of abuse in Section 4(2)(c) was interpreted to be wide in this case, the Supreme Court also held that a penalty need not be imposed as the accused party had provided legitimate justifications. 4.6. After analysing the decisional practice on abuse of dominance in ....
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....taken even for exploitative abuses if it is raised by the dominant firm. 4.9. Singapore has also adopted a similar approach to analyse abuse by dominant enterprises. In its guideline, the Singapore competition authority, i.e., CCCS has noted as below: "In conducting an assessment of an alleged abuse of dominance, CCCS will undertake an economic effects-based assessment in order to determine whether the conduct has, or is likely to have, an adverse effect on the process of competition. The process of competition may be adversely impacted, for instance, by conduct which would be likely to foreclose, or has foreclosed, competitors in the market. CCCS considers that factors which would generally be relevant to its assessment include: the position of the allegedly dominant party and its competitors; the structure of, and actual competitive conditions on, the relevant market; and the position of customers and/or input suppliers." (emphasis supplied) 4.10. Even in the US, having a monopoly is not per se unlawful and is always judged under the rule of reason. For establishing an allegation of monopolizing or attempting to monopolize, competition authorities are usually required to ....
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....directly imposing unfair purchase or selling prices or unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which , by their nature or according to commercial usage, have no connection with the subject of such contracts." 60. In earlier cases, the EU Court applied per se rule, but there has been shift in the opinion of the EU Courts, which has been captured by Richard Whish & David Bailey in Tenth Edition of "Competition Law" under Section 5 dealing with Article 102. While dealing with general principles of abuse, following has been stated under the heading '(ii) Legal formalism: are there any per se rules under Article 102?' in following words: "(ii) Legal formalism: are there any per se rules under Article 102? One of the most common complaints about Article 102 has been that the Commission and the EU Courts has been that the Commission and the EU Courts appl....
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....ddress that argument. It is hard to imagine that a dominant firm that is convinced that its behaviour is not anti-competitive would not submit such evidence. It follows that the Court's qualification would seem, de facto, to mean that exclusionary conduct can be abusive only where it can be shown to be capable of having anti-competitive effects on as-efficient competitors. To put the point another way, there is no per se illegality under Article 102. The Court of Justice has recently re-affirmed the position: in Paroxetine it stressed that, having regard to all relevant facts, conduct may be characterised as abusive only if it is capable of restricting competition and, in particular, producing exclusionary effects." 61. Under heading (iv) What type of effects analysis should be undertaken to find an exclusionary abuse?, following has been stated: "iv) What type of effects analysis should be undertaken to find an exclusionary abuse? Where it is not possible to say that the object of a dominant firm's conduct is to harm competition, the jurisprudence of the Court of Justice is clear that conduct should be condemned as abusively exclusionary under Article 102 only where it is....
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.... obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or (e) uses its dominant position in one relevant market to enter into, or protect, other relevant market. Explanation - For the purposes of this section, the expression - (a) "dominant position" means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to - (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour. (b) "predatory price" means the sale of goods or provision of services, at a. price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. (c) "group" shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5." 64. The explanation clearly provides that unfair or discriminatory condition in purchase of sale of goods or service shall not include such discriminatory condition or price which may be adopted to meet the competition....
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....of the prima facie opinion.......". The proceeding was initiated after forming the aforesaid prima facie opinion directing the Director General to cause an investigation under the provisions of Section 26(1). 68. The Director General issued notice to OEMs and other third parties and after collecting evidence submitted the report on basis of which order has been passed. The order of the Commission is a detailed order which notices submissions made by the Appellant, the report of the Director General, and the other materials on record and it cannot be said to be an order relying on the decision of the European Commission dated 18.07.2018. There are findings and conclusions recorded by the Commission after considering the data and evidence collected in the inquiry. The geographical market in the investigation was India and we find no ground to accept the submission of the Appellant that order of the Commission is replete with confirmation bias. Relevant markets were determined by the DG and determination of markets has been noted in the Para 57 of the order of the Commission, which is to the following effect: "57. Based on its assessment in the backdrop of the abovementioned statut....
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....ons of this Agreement (including compliance with Section 2.3) and the GMS Requirements, and subject to Company being in compliance with a valid and effective Android Compatibility Commitment, Google grants to Company a non-transferable, nonexclusive, no cost license during the Term (under Google's Intellectual Property Rights) to (a) distribute the Google Applications on Devices in the Territories, and (b) reproduce the Google Applications to the extent necessary to exercise the license granted in this Section 2.1. I Company may only distribute a Device with Google Applications if it makes all Core Applications authorized for distribution in the applicable Territory available on such Device, unless otherwise approved by Google in writing. For the avoidance of doubt, Google may license such Google Applications under Intellectual Property Rights that Google owns or has the right to license without payment to or consent from a third party." 73. Clause 2.3(b) provides that company may not, and may not allow or encourage any Affiliate or third party to create derivative works from or based on Google Applications. 74. Sub-clause 2.3(i) restricts the third parties to offer, download....
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....CC) (Earlier in Form of AFA- Android Fragmentation Agreement). Copy of sample ACC with Micromax Informatics Ltd. has been brought on record by the Appellant in the Convenience Compilation. Clause 1.2 - 'Android Compatible Device(s)' means, for each applicable version of Android, devices that comply with the Android Compatibility Definition Document (CDD). Clause 2.2 provides for 'Permitted Exceptions'. Clause 2.1 - 'Android Compatibility' provides: "2.1 Android Compatibility. A. Android Compatible Hardware. All devices based on Android that Company manufactures, distributes, or markets will be Android Compatible Devices. B. Android Compatible Software. All Android-based software that Company develops, distributes, or markets will be designed to run on Android Compatible Devices. C. Android-based SDKs. Company may not distribute or market an SDK based on Android to third parties or participate in the development of such an SDK. Company remains free to develop an SDK based on Android for its own internal use." 78. The Commission in its order has after noticing the evidence which was collected by the Director General from different OEMs has come to the conclusion that OEMs ar....
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....pps (the distribution of which is conditioned on other contracts such as MADA and AFA). For some Google apps, the device manufacturer may substitute an alternative, perhaps Mapmylndia Maps instead of Google Maps. But for other Google apps which are considered must have such as Play Store, the alternative is less clear. Without Google Play, from bare Android devices, users cannot easily obtain the apps both of Google and of independent app developers which they typically expect to obtain." 79. After analyzing the materials on record and arguments advanced by the Appellant, the Commission held that Google does not negotiate the key terms of the MADA which is anti-competitive conduct by foreclosing the market for rivals and MADA has also reduced potential choice for the users. In Para 373 of the judgment commission has held: "373. Based on the foregoing analysis, the Commission is of the view that various covenants of MADA are in the nature of imposition of unfair conditions on OEMs who have no choice but to accept the same. As already stated, Google does not negotiate on key terms of the MADA which are found to be resulting in anti-competitive conduct viz. pre-installation of enti....
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....te and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets. The Regulator which is statutorily obliged to discharge its statutory function cannot confine its analysis and decision only on the basis of evidence of countervailing parties and competitors. Any conduct or arrangement concerning the interests of consumers and OEMs is clearly amenable to examination by the Commission to protect the interest of consumers and preserve competition in the market. 83. Learned ASG, in support of his submission relied on the judgment of Hon'ble Supreme Court in "L.I.C. of India & Anr. vs Consumer Education & Research Centre, (1995) 5 SCC 482". In Para 23 to 27 following was laid down : "23. Every action of the public authority or the person acting in public interest or any act that gives rise to public element, should be guided by public interest. It is the exercise of the public power or action hedged with public element (sic that) becomes open to challenge. If it is shown that the exercise of the power is arbitrary, unjust and unfair, it should be no answer for the State, its instrumentality, public....
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....e law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances." 24. In Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293 : (1989) 2 SCR 751] it was held that the Corporation must act in accordance with certain constitutional conscience and whether they have so acted must be discernible from the conduct of such Corporations. Every activity of public authority must be informed by reasons and guided by the public interest. All exercises of discretion or power by public authority must be judged by that standard. In that case when the building owned by the port trust was exempted from the Rent Act, on terminating the tenancy for development when possession was sought to be taken, it was challenged under Article 226 that the action of the port trust was arbitrary and no public interest would be served by terminating the tenancy. In t....
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.... Each case will be examined on its facts and circumstances to find out the nature of the activity, scope and nature of the controversy. The distinction between public law and private law remedy has now become too thin and practicably obliterated. 27. In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Duty to act fairly is part of fair procedure envisaged under Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest." 84. Learned ASG has also made elaborate submission that OEMs have entered in Revenue Sharing Agreement (RSA) with Google under which they receive substantial revenue ....
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.... ' ...Firefox was initially very successful, achieving close to 30% global market share in 2010 as the second most popular browser after Internet Explorer (See: http://gs.statcounte r.com/browser- market-share/ desktop/ worldwide/Umonthly-200901 -20 LO 12- bar). After that, Mozilla's market share took a downturn, impacted by companies connecting their browsers to their operating systems: on desktop this was Microsoft connecting Windows to Internet Explorer (and later Edge) and on mobile this was Google connecting Chrome to Android mobile devices. This made default placement on devices a challenge. Without business opportunities for default placement of Firefox, the overwhelming majority of Firefox use was through dedicated fans who took several steps to find Firefox on the web or in an app store, install it on their device, change it to be default, and in many cases, re-change system settings that attempted to override their default choice. Mozilla also struggled on mobile without any major distribution opportunities for Firefox on Android in global markets. This included India, where Mozilla was engaged in discussions with OEMs but was unable to get placement as the def....
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....whereas iOS was 1.46% and others were only 0.07%, this indicate the effect of abusive conduct. Learned ASG has referred to data collected by the Director General and has been taken note by the Commission in Paras 96, 97, 100 and 101. 89. The facts brought on the record indicate that effect of abuse of dominant position by the Appellant was taken note of which was reflected on extensive data which was on the record. The Commission has also noticed that OEM's lack of bargaining power and lack of negotiating space with Google clearly proves harm to competition and weak countervailing buyer power restricting to bundled apps, pre-installation and premium placement are also anti-competitive. Various conditions in the MADA which include the condition under which Google retains sole discretion to change list/bundle of GMS Apps; condition that OEMs must seek approval of Google for launching devices, all this clearly prove anti-competitive practices. We may only notice para 373 of the order of the Commission, where the Commission has expressly held that the practices of Google harm competition. Para 373 is extracted for ready reference: "373. Based on the foregoing analysis, the Commissio....
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.... Water Transport Corpn. (supra) is not only to assess whether the parties have unequal bargaining power relative to one another but also to ascertain whether a contractual term or a contract is unfair, unreasonable or unconscionable. A contract (or a term in a contract) can be said to be unfair or unreasonable if it is one- sided or devoid of any commercial logic. In the present case, although theatre owners may unilaterally determine the conditions of entry into cinema hall, the condition imposed in this instance is not unfair, unreasonable or unconscionable. 92. In the facts of the said case, the Hon'ble Supreme Court held that conditions imposed by multiplexes were not unfair, unreasonable or unconscionable. Judgment of Hon'ble Supreme Court was in the facts and circumstances of that case and cannot be pressed in the present matter. 93. The next case relied by learned counsel for the Appellant is "Saurabh Tripathy vs. Competition Commission of India, 2019 SCC OnLine Del 10498", where in para 46, the Delhi High Court laid down following: "46. It is important to note that neither the DG nor CCI were required to substitute the commercial wisdom of the contracting parties and ev....
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.... OEM shall implement the "Home button animation" as per Google's guidelines if Google Assistant is enable on the Android device and also implement Google Hotword, if it is supported by the device. Thus, 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. 97. The Commission has noted in para 373 of the impugned order, the unfair conditions imposed by Google on OEMs, holding that the OEMs have no choice but to accept them. Para 373 is as follows: "373. Based on the foregoing analysis, the Commission is of the view that various covenants of MADA are in the nature of imposition of unfair conditions on OEMs who have no choice but to accept the same. As already stated, Google does not negotiate on key terms of the MADA which are found to be resulting in anti ¬ competitive conduct viz. pre-installation of entire suit of GMS as well as prominent placement thereof. By foreclosing the market for rivals, these covenants have also reduced the potential choice for users. Further, the pre¬ installation requirement f....
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....y standard failed. The learned Senior Counsel submits that AFA/ACC does not restrict innovation. The AFA/ACC signatories are free to differentiate and innovate on top of these minimal baseline requirements and some OEMs have actually done so. The learned Senior Counsel has referred to Samsung and Oppo, which had released devices, some of which have foldable screens and pop-up cameras. The intention of the Appellant is that securing minimal compatibility was to avoid the fate of fragmentation. We have noticed certain relevant clauses of ACC in preceding paragraphs of this judgment. Clause 2.1(B) of ACC provides that any Android based software company developed/ distributed or marketed will be designed to run on android compatible devices. Clause 2.3 enumerates certain permitted exceptions. The Commission after analysing the material on record including the evidence given by the OEMs, recorded following findings in paragraph 583: "583. In view of the foregoing analysis, the Commission concurs with the finding of the DG that Google, by making pre-installation of Google's proprietary apps (particularly Google Play Store) conditional upon signing of AFA/ ACC for all android devices ma....
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....id Forks. Further in paragraph 558, the Commission has observed: "558. The Commission finds that the restrictions imposed vide various clauses of AFA/ ACC are unreasonable and disproportionate in scope and has resulted in foreclosure of its competitors in OS market. Google, in its submissions also claims that a branding solution would be ineffective and lead to consumer confusion as firms would be allowed to market incompatible devices as based on Android or using Android". Though the Commission does not find this assertion convincing, but in that case too, Google could have suitably amended its branding guidelines to make this distinction more prominent." 103. With regard to complaint of the Appellant that Commission while returning its finding, holding AFA/ACC limiting scientific development, has not considered the evidence on record. We have perused the part of the order passed by the Commission in the above regard. In paragraphs 504 to 583, the Commission has dealt with this issue. In paragraph 564.1, the Commission has noted the evidence given by Xiaomi, where Xiaomi has stated about the restrictions in the development of alternative operating system. In paragraph 564.1, th....
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....522 and 523, the Commission has noticed the evidence led by Amazon. After noticing the evidence of Amazon, following has been stated in paragraph 524 by the Commission: "524. Amazon has also pointed out other hindrances in the path of developing a forked version of Android OS owing to terms and condition of AFA/ ACC. Achieving a viable scale would have allowed Amazon and other similarly interested developers to invest in developing an alternative Android OS which would have offered more features and services. Thus, the obligations imposed pursuant to AFA/ ACC, have huge impact on innovation and research and development by competitors." 107. The Commission has in its order, elaborately dealt with evidence led by the OEMs, and, therefore, the complaint of the Appellant that evidence has not been considered in the right perspective, cannot be accepted. We have noticed that not only Amazon but eight other OEMs have made their submissions on various non-negotiable constraints contained in AFA/ACC, which ensure that Fork developers cannot succeed. 108. The learned Senior Counsel for the Appellant has emphasised that the Commission has selectively relied on the responses provided by X....
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....on of Android developed by Amazon) demonstrate that anti - fragmentation obligations severely limit the number of OEMs as well as their ability to market forked Android OS based devices. Amazon, having developed fork version of Android as Fire OS, had to face considerable difficulty in commercial production and distribution of handsets installed with Fire OS. Amazon intended to license its Fire OS to OEMs who would manufacture smart phone devices operating on the Fire OS. However, this could not materialize due to the unwillingness of OEMs who were under AFA obligations. This is evident from the reply of Amazon according to which several leading OEMs cited the risk of losing their access to GMS if they were to work with Amazon, as the Fire OS would be viewed by Google as a 'fragmentation' of Android. The relevant extract from the reply of Amazon, is as follows: However, Amazon's ability to distribute the Fire OS through the OEMs who are subject to Google's Mandatory Terms was and is significantly limited. Amazon discussed Project Otus with several smartphone OEMs (including Huawei, LG, HP, Sony, ZTE, Lenovo and HTC). It is submitted that these OEMs (in their negotiations with Ama....
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....ndefined, Google has kept the sole discretion to interpret the same as per its interest at all times. By simply stating that the OEM will not take any actions that may cause or result in the fragmentation of Android, Google left the OEMs guessing as to whether a particular action is within the ambit of the AFA. Google at its whims and fancies could consider any customization of the Android code as fragmentation as it retains the power to unilaterally change the compatibility requirements. Since, Google requires GMS licensees to submit all Android devices to Google for approval, regardless of whether the devices preload GMS or are based on the Android Open-Source Project, the OEMs are left to the dole discretion of Google w.r.t. their devices. This also restricted the ability of the OEMs to test the markets with newer features and devices." 113. We are in agreement with the conclusions recorded by the Commission in paragraph 548. The above clearly indicates that Commission has recorded its findings on anti-competitive effects on Android Fork developers and has considered the relevant evidence on record and Google's submission and the complaint of Google, that evidence has not been ....
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....4a: The Commission while returning its finding has considered the evidence on record in respect of Section 4(2)(b)(ii) and has also returned finding on anti-competitive conduct of the Appellant. Issue No. 5 and 5a 116. The Commission has held that Google has perpetuated its dominant position in the online search market in a way so as to result in the denial of market access for competing search apps violating Section 4(2)(c) of the Act. The conclusion of the Commission is recorded in Para 419, which are to the following effect: "419. Based on the interplay between MADA, RSAs, and AFA/ACC, the Commission is of the view that Google used its position as the only supplier of Play Store to protect its market for general search services and it also made it difficult for the competing general search services to access the said market." 117. The Commission has further proceeded to hold that requirement of pre-installing Google Play Store under MADA results in the pre-installation of Google Search Services, which provides a significant advantage to Google Search as compared to other competing search engines. It is further held that pre-installation is a significant distribution channel....
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....ion of the applicable Client ID in accordance with Section 2.3; 2.1.2.3. compliance with Section 2.2; 2.1.2.4. compliance with the promotion restrictions set out in Section 3 and the Google Mobile Branding Guidelines; and 2.1.2.5. Company or its Affiliate being a MADA licensee in good standing." 119. Clause 2.4 contains certain prohibition on the Company. Clause 2.4.1 is as follows: "2.4.1. During the Term, Company will not and will not allow any third party to: 2.4.1.1. Implement, pre-load or otherwise install on a Qualified Device (including without limitation via the out-of-box experience or non-user initiated download) any application, bookmark, product, service, icon, launcher, third-party Hotword or feature that is an Alternative Service or that has the primary purpose of providing access to an Alternative Service, except as specified in subsection 2.4.3 below. Notwithstanding the foregoing, Company may preload on a Qualified Device (a) a Company-owned Alternative Assistive Service, provided such Company-owned Alternative Assistive Service does not use a third party Alternative Assistive Service to obtain results or perform actions. For the sake of clarity, the Nua....
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....nts not only for that particular device but also for all the other devices. It is submitted that Appellant has highlighted the distinction at multiple stages including at the time of hearing. The Appellant has referred to Para 403 of the order of the Commission. It is submitted that the Commission had adopted the Director General's assessment by portfolio-wide RSAs and not on device-based RSA. It is submitted that the Director General replicated the European Commission's findings on RSA whereas before the European Commission the RSAs under consideration were pre-2014 RSAs i.e. only portfolio-wide RSAs, and related findings have no relevance in view of the changed nature of the RSA after 2014. The Commission has also not examined the coverage of Google's portfolio-wide RSAs. Commission's observation that OEMs are unable to preload rival General Search Service due to fear of losing RSA payment by Google, it is submitted that Xiaomi's submission which was signatory to RSA state that Xiaomi was not precluded from entering into agreement with competing search engines. 122. The learned ASG appearing for the Commission has refuted the above submission and contended that the Commission ha....
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....hey have the same effect for all purposes such as are relevant to the case as if they were one deed. Similarly, KIM LEWISON, O.C. IN THE INTERPRETATION OF CONTRACTS (supra) has observed that a document executed contemporaneously with, or shortly after the primary document to be construed may be relied upon as an aid to construction, if it forms part of the same transaction as the primary document. 27. Many transactions take place by the entry into a series of contracts, for example a sale of land involving an exchange of identical contracts, a sale and lease-back of property; an agreement of sale and a bill of sale and so on. In such cases, where the transaction is in truth one transaction all the contracts may be read together for the purpose of determining their legal effect. In Smith v. Chadwick, Jessel M.R. said: "...when documents are actually contemporaneous, that is two deeds executed at the same moment,... or within so short an interval that having regard to the nature of the transaction the Court comes to the conclusion that the series of deeds represents a single transaction between the same parties, it is then that they are treated as one deed; and of course one deed....
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.... is to enhance consumer well-being. These policies are directed at ensuring that markets function effectively. Competition policy towards the supply side of the market aims to ensure that consumers have adequate and affordable choices. Another purpose in curbing anti-competitive agreements is to ensure "level playing field" for all market players that helps markets to be competitive. It sets "rules of the game" that protect the competition process itself, rather than competitors in the market. In this way, the pursuit of fair and effective competition can contribute to improvements in economic efficiency, economic growth and development of consumer welfare. How these benefits accrue is explained in the ASEAN Regional Guidelines on Competition Policy, in the following manner: "2.2. Main Objectives and Benefits of Competition Policy *** 2.2.1.1. Economic efficiency: Economic efficiency refers to the effective use and allocation of the economy's resources. Competition tends to bring about enhanced efficiency, in both a static and a dynamic sense, by disciplining firms to produce at the lowest possible cost and pass these cost savings on to consumers, and motivating firms t....
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....country they seem to change and evolve over the time. However, it will be useful to refer to some of the common objectives of competition law. The main objective of competition law is to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer preferences. The advantages of perfect competition are threefold: allocative efficiency, which ensures the effective allocation of resources, productive efficiency, which ensures that costs of production are kept at a minimum and dynamic efficiency, which promotes innovative practices. These factors by and large have been accepted all over the world as the guiding principles for effective implementation of competition law. *** 8. The Bill sought to ensure fair competition in India by prohibiting trade practices which cause appreciable adverse effect on the competition in market within India and for this purpose establishment of a quasi-judicial body was considered essential. The other object was to curb the negative aspects of competition through such a body, namely, "the Competition Commission of India" (for short "the Commission") which has the power to perform differ....
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....e but also protection of consumer interest. The delay in disposal of cases, as well as undue continuation of interim restraint orders, can adversely and prejudicially affect the free economy of the country. Efforts to liberalise the Indian economy to bring it on a par with the best of the economies in this era of globalisation would be jeopardised if time-bound schedule and, in any case, expeditious disposal by the Commission is not adhered to. The scheme of various provisions of the Act which we have already referred to including Sections 26, 29, 30, 31, 53-B(5) and 53-T and Regulations 12, 15, 16, 22, 32, 48 and 31 clearly show the legislative intent to ensure time-bound disposal of such matters."" 127. The judgment of Hon'ble Supreme Court in "S. Chattanatha Kurayalar v. Central Bank of India (supra) and judgment of Hon'ble Delhi High Court in "Mercury Travels (India) Ltd and Ors. vs. Mahabir Prasad and Ors." (supra), noticed above fully support the submission of learned ASG that agreements forming part of the same transaction have to be read together. The subject of all the three agreements relate to android open source and are interrelated. We, thus, are of the view that all....
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....e will switch back to Google. This cycle stemming from a lack of scale will continue until a large number of users can be attracted to the platform in a relatively short period of time, most likely by becoming the default search provider on a major mobile platform. In the absence of this kind of significant change in usage, Bing or other competing search providers are unlikely to be able to meaningfully compete with Google." (Emphasis supplied) 393. Based on the foregoing, the Commission is of the view that the competing general search service providers are not in a position to nullify the competitive edge that Google secured for itself through pre-installation as well as premium placement under MADA." 130. The consideration of the entire issue by the Commission from Paras 410 to 419 as well as other paras as noted above, clearly indicates that the Commission has considered the evidence on record for coming to finding that Section 4(2)(c) has been breached. The consequence of high payment by Appellant to OEMs who have signed RSA is also another factor which even acts as entry barrier for pre-installing any competing general search apps by OEMs. In Para 412, the Commission has....
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....for determining abuse can be summed in following manner: (i) A dominant company leverages its dominance in one market to benefit from any secondary market. This leveraging results in foreclosure of competition in the secondary market. (ii) The behaviour of the dominant firm is not objectively justified. 134. Article 102 of the Treaty on the Functioning of the European Union (TFEU) also contains the similar principles of Competition Law. Article 102 of TFEU also makes tie-in agreements as infringement of Article 102. Tying is the practice of a supplier of one product, the tying product, requiring a buyer also to buy a second product, the tied product. The tying may have various forms. 135. Richard Whish and David Bailey in the "Competition Law", Tenth Edition, while dealing with leverage theory and tying states "Tie-in agreements may amount to infringement" and referring to decision in Google Android's case dated 18.07.2018 states: "In Google Android the Commission imposed a fine of EUR4.34 billion on Google for, among other practices, tying its Google Search app and Chrome browser with the Play Store, which enables users to download, install and manage the apps on Android, ....
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....-installation as a distribution channel (paras 424-432); inability of the rival web browsers to neutralize the competitive edge secured by Google in the browser market (paras 433-434); Google setting the de-facto web standards due to its dominant position in the browser market (paras 435-441); impossible to uninstall Google Chrome on GMS devices (paras 442-445); and negative impact on competition in the relevant market(s) (para 446-448). 141. The Commission has after analysing the evidence led by parties found tying of Play Store with Google Search violative of Section 4(2)(e). The Commission has also retuned its finding and conclusion regarding typing up of Play Store with YouTube. In para 465, the Commission returned following finding: "465. Based on the foregoing analysis, the Commission is of the view that the abovementioned conduct of Google of tying Play Store with Google YouTube, significantly restricts competition in the relevant market by foreclosing distribution channels for rivals OVHPs and thereby, deterring their incentive to innovate and offer choice to users. Such leveraging by Google allows it not only to protect but also reinforces its dominant position in the m....
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....ng questions were framed to obtain the desired answers from the OEMs. Some of leading questions highlighted by learned Counsel are as follows: "a. "It is gathered that Mobile Application Distribution Agreement ('MADA') obligation requires the device manufacturers to pre-install a bundle of Google Mobile Services ('GMS') before distribution. In light of the same, please furnish details about the possible dilemma faced by you. If any, in terms of avoidance to allow installation of competing app with apprehension of causing of duplication Apps and filling up precious ROM space (in addition of Google's) as it might adversely affect the user experience on their devices" b. "Apart from pre-installation of GMS what are methods are employed/ used by Google that result in reduced discoverability and popularity of other competing apps?" c. "It is stated that default setting or pre-installation exists in both desktop/ laptop and smartphone market. In light of the aforesaid, please furnish complete details about the fact that user bias to pre-installation may be more pronounced in mobile segment than PC/Laptops." d. "There, admittedly was an impact of the non-availability of the prime ....
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....ssion in its impugned order that after passing of the order by the Commission under Section 26 for carrying out the investigation, the Director General issued notice to several OEMs and other stakeholders eliciting their response. Further, information were called from time to time. The Director General was to collect information and data for the purposes of preparing a Report. There is no occasion for violation of principles of natural justice by the Director General, when he was only to inquire and collection information. 147. The learned Senior Counsel for the Appellant elaborating on his submission stated that the Director General was acting with pre-determined mindset and hence, he having already decided to submit a Report on the lines of the European Commission's case, the investigation suffers from bias. The learned Counsel for the Appellant has relied on the judgment of the Hon'ble Supreme Court in Oryx Fishries Pvt. Ltd. vs. Union of India and Ors. - (2010) 13 SCC 427. 148. The Hon'ble Supreme Court in the above case had occasion to consider whether action taken by Marine Products Export Development Authority was justified. It was contended before the Hon'ble Supreme Cour....
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.... the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 32. Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice. 33. The principle that justice must not only be done but it must eminently appear to be done as well is equally applicable to quasi-judicial proceeding if such a proceeding has to inspire confidence in the mind of those who are subject to it." 149. The above observation can have no application in the facts of the present case. In the present case, the Director General was not taking any decision on any of the rights of the parties. The notices issued by the Director General were notices enlist....
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....ould say on the material part of the prosecution case to prove against the appellant which is illegal and obviously unfair to the appellant offending his right to fair trial enshrined under Article 21 of the Constitution. It is not a curable irregularity." 151. In the above case, the Hon'ble Supreme Court was considering the provisions of Evidence Act and the question, which a prosecutor is entitled to put to witness in a criminal trial. The above analogy cannot be applied with regard to investigation which is to be carried out by the Director General under the statutory scheme of the Competition Act, 2002. The Director General as investigator is entitled to collect elicit information, which will be relevant for the purposes of Competition Act. 152. We are, thus, of the view that looking at the questions, which are termed as leading questions by the Appellant, it cannot be said that Director General has pre-decided the issue. The notices issued by the Director General were with the object of eliciting information, his function was only inquisitive in nature. 153. The learned Senior Counsel for the Appellant has also placed reliance on judgment of Competition Appellate Tribunal i....
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....ition laid down by the COMPAT in the above case. The learned Senior Counsel has also submitted that the judgment of the COMPAT has received approval by the Hon'ble Supreme Court, since the Civil Appeal No.3525-3526/2017 filed by Competition Commission of India was dismissed by the Hon'ble Supreme Court by judgment dated 10.08.2017. The Hon'ble Supreme Court noticed that paragraph 42 of the judgment of the COMPAT and held that the aforesaid findings were based on detailed discussion on the basis of the material that was placed on record. The judgment of the COMPAT and Hon'ble Supreme Court cannot be pressed in the facts of the present case, since the finding in the Report of the Director General were based on the evidence collected and it cannot be said to be ex-facie erroneous. 155. The learned Senior Counsel for the Appellant has also relied on the judgment of the Hon'ble Supreme Court in Ranjit Thakur vs. Union of India - (1987) 4 SCC 611. The Hon'ble Supreme Court in the above case had occasion to consider principles of natural justice, bias and real likelihood of bias. The Hon'ble Supreme Court held that biased judgment is a nullity. The proposition laid down by the Hon'ble Su....
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....dy, then also the court did not accede to the proposition that all particulars ought to be drawn from the judicial branch or should be so qualified. Given the multiple tasks that the Act requires CCI to discharge (advisory, advocacy, investigation and adjudication), it cannot be held that the CCI must necessarily comprise of lawyers or those possessing judicial experience or those entitled to hold office as judges, to conform with the provisions of the Constitution. CCI's task as the primary regulator of marketplace and watchdog in regard to anti-competitive practices was conceived by the Parliament to be as a composite regulator and expert body which is also undoubtedly required to adjudicate at a stage. That stage, however, cannot be given such primacy as to hold that the CCI is per se or purely a judicial tribunal. As an adjudicatory body, there can be, no doubt, of course, that its orders are quasi-judicial and must be preceded by adherence to a fair procedure. As to what is a fair procedure has been elaborately dealt with by Section 26 and various regulations that mandate the kind of opportunity that various interested parties are to be given. Equally, in the course of suc....
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....r other submissions. (iv) Since the petitioners had not availed the remedy of appeal (and had approached this Court) it is open to such of them who wish to do so, to approach the Appellate Tribunal, within 6 weeks; in such eventuality, the Appellate Tribunal shall entertain their appeals and decide them on their merits in accordance with law, unhindered by the question of limitation." 158. The learned ASG submitted that against the above judgment of the Delhi High Court, an Appeal filed by the Competition Commission of India before the Hon'ble Supreme Court is pending consideration. 159. The learned ASG referred to Section 15 of the Competition Act, 2002, which provides: "15. Vacancy, etc. not to invalidate proceedings of Commission.- No act or proceeding of the Commission shall be invalid merely by reason of - (a) any vacancy in, or any defect in the constitution of, the Commission; or (b) any defect in the appointment of a person acting as a Chairperson or as a Member; or (c) any irregularity in the procedure of the Commission not affecting the merits of the case." 160. Section 15, sub-clause (a) protects act or proceeding of the Commission, which suffers from any de....
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....res. The Commission has only considered this issue in the dominance section in the context of alleged entry barriers to establish in the market for app stores for Android. It is submitted that under the Act, the Commission can only remedy an abuse of dominance and not dominance itself. Even in the DG Report, the above issues is only considered in the factors to establish dominance and not as a finding of abuse of dominant position. It is submitted that direction heightens the risk of introduction of malware in the device. 168. The learned ASG submits that statutory scheme under Section 27(a), empowers the CCI to impose the remedy of directing the enterprise to discontinue such abuse of dominant position. It is submitted that there is ample power under Section 27(g) also to pass such other order or issue such directions as it may deem fit. 169. During the course of submission, the learned Senior Counsel for the Appellant submitted that any developer of Apps/App store can distribute their Apps and Apps Store through Play Store of Google for which Google provides an Agreement to be entered where App developer has to share a portion of revenue received from App. There is no finding i....
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....ilable on record including the findings of the DG, third party submissions as well as response filed by Google. The Commission is of the considered view that Google has been able to justify its conduct and no case is made out against Google under Section 4 of the Act, on this count." 173. Thus, when the Commission itself found Google has not abused its dominant position in Play Store market by imposing unfair and discriminatory terms and conditions on App developers, there was no occasion to direct the Appellant to distribute the App Store of third party App developers, without accepting the terms and conditions of the Appellant. 174. We, thus, are of the view that direction issued in paragraph 617.9 is unsustainable and deserves to be set-aside. 175. The direction issued by Commission in paragraph 617.10 is that "Google shall not restrict the ability of app developers, in any manner, to distribute their apps through sideloading". This direction has also been challenged by the Appellant. The learned Senior Counsel for the Appellant submits that this direction is unnecessary, since side-loading, unlike the Apple ecosystem, is permitted on the Android Platform. A user is allowed t....
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....reover, sideloading of apps does not allow automatic update functionality for the apps, which deters the users as well as app developers, in general to rely on side-loading a viable option. In other words, the ability for consumers to sideload apps (installing apps without using an app store) does not exert any constraint on Google in the Android app store market." 178. What was observed by the Commission in the above paragraph is that the ability for consumers to sideload apps does not place any constraint on Google in the Android app store market. The order of the Commission does not contain any finding that Appellant has abused its dominant position in Play Store qua sideloading. The learned Counsel for the Appellant has relied on a judgment of the Hon'ble Delhi High Court delivered on 14.02.2023 in Winzo Games Private Limited vs. Google LLC and Ors. - CS(COMM) 176/2022. In the above case, a suit was filed by Plaintiff to restrain Google LLC from displaying any warning against the use of the gaming platform/ application 'WinZo Games' of the Plaintiff on the Android Operating System. It was contended before the Court that Google resisted the suit and contended that warning is be....
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....cribed in the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011; xxx xxx xxx (k) the intermediary shall not knowingly deploy or install or modify technical configuration of computer resource or become party to any act that may change or has the potential to change the normal course of operation of the computer resource than what it is supposed to perform thereby circumventing any law for the time being in force:" 21. Rule 8 of the 2011 Security Rules is set out below: "8. Reasonable Security Practices and Procedures.- (1) A body corporate or a person on its behalf shall be considered to have complied with reasonable security practices and procedures, if they have implemented such security practices and standards and have a comprehensive documented information security programme and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business. In the event of an information security breach, the body corporate or a person on its behalf shall be required to demons....
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....with certain warning in the process of sideloading, the said warning cannot be read as putting any restriction in sideloading. We have also noticed the submission of learned ASG relying on the Digital Markets Act (Regulation 2022/1925; 'DMA') and Article 6(4) of the DMA, which directs that sideloading be permitted, while allowing the relevant OS developer to impose measures which are "strictly necessary and proportionate" to ensure that side-loaded apps do not endanger the integrity of the hardware or operating system. Thus, the provision which is relied by learned ASG in support of its submission, itself permits imposition of measures, which are strictly necessary and proportionate and do not endanger the integrity of the hardware or the operating system. We, thus, are of the view that direction under paragraph 617.10 was unnecessary. 180. The next direction, which has been attacked by the learned Senior Counsel for the Appellant is direction issued in paragraph 617.3, which is to the following effect: "617.3. Google shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors. This would ensure interoperability ....
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....g MADA, whereas AOSP licencee, who develop Android forks are either denied access to APIs or the same is given to them after considerable delay, by which time MADA signatories would have received new functionalities and updates. Most Android Apps made by App developers function on basis of Google's proprietary APIs, their unviability disincentives developers from porting Apps to forks due to higher cost and significantly decreases chances of fork's commercial success. 184. The APIs, particularly Google Play Services, is a core system software that enables key functionalities of every certified Android device. Certified Android devices are those devices, on which Google Play Protect is installed and Google certifies to ensure that these devices are secure and ready to run Apps from Google and the Play Store. It is argued by the learned Senior Counsel for Appellant that these APIs are proprietary Apps, which are made available to App developers and OEMs and are continually updated by Google. 185. The various core device features that Google Play Services provide services relating to security and reliability (through installation of Google Play Protect which provides protection from....
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.... provided to Google's competitors, App developers and OEMs without going through necessary technical and commercial engagement with Google. Further, APIs have not been found as part of any abusive conduct by the Appellant. 190. We are thus of the view that the direction issued in paragraph 617.3 is unsustainable and is, therefore, set aside. 191. Now, we come to the direction issued in paragraph 617.7, i.e. "Google shall not restrict un-installing of its pre-installed apps by the users". 192. The learned Senior Counsel for the Appellant submits that the Commission has imposed the said direction on the ground that users inability to remove Google's preinstalled Apps from the devices contributes to their tendency to use the preinstalled options and not use alternatives, which causes foreclosure. The Appellant's contention is that user are fully entitled to disable preinstalled Apps in three simple steps, which can be applied only in a three seconds and after the App is disabled, it stops being visible to the users and it vanishes from the screen. The disabled Apps do not collect data and do not perform any background functions or use any device resources and can be re-enabled only....
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....e with the ratio expounded by the Hon'ble Supreme Court in the case of Excel Crop Care Limited vs. Competition Commission of India (2017 8 SCC 47) wherein the Hon'ble Apex Court has analyzed the legislative intent of Section 27 and held that penalty should be computed under Section 27 (b) with respect to the "relevant turnover" of the corporate entity and not its "total turnover". He has further contended that the term "relevant turnover" has been interpreted to mean the corporate entity turnover pertaining to the products and services that have been found to be contravening the provision of Competition Act. 199. With regard to the calculation of "relevant turnover" in the present case, he has argued that the CCI found Google's model of providing Android Mobile OS, with signing of MADA, ACC/AFA and RSA as anti-competitive and violative of the provisions of the Competition Act, and besides this, the CCI has not rendered any finding in relation to contravention of the Competition Act and its provisions. He has further argued that the CCI has, inter alia, held that the revenue of Google pertaining to India in relation to its apps and services shall be taken into account for computing....
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.... upon and while the information and statements were supplied by Google on 17.12.2021, the Commission maintained an inexplicable silence till 19.9.2022, and did not indicate any concern regarding the inadequacy of information submitted by Google. He has further submitted after final arguments were concluded on 2.9.2022, CCI invited written submission on issue of the quantum of penalty on the basis of Google submission of financial information (that was made in 2021) without informing Google that it viewed Google data as inaccurate). 203. The Learned Senior Counsel for Appellant has argued that Google was asked to provide accurate and reliable information vide order dated 6.10.2021 whereby Google was asked to submit audited Balance-Sheet and Profit & Loss Account for three years as well as details of turnover and profit generated or arising/accruing from India by Google and its group entities from all revenue streams associated with Android Apps (including advertising and revenue generated from play store and Apps which are part of GMS) for the three financial years viz. 2018-19, 2019-20 and 2020-21 by affidavits supported by certificates of Chartered Accountants by 5.11.2021. He ha....
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....d mention about the inadequacy of submitted information has been made in detail in the Impugned Order from paragraphs 620 onwards. The Learned ASG has thus contended that despite being repeatedly asked and given additional time to submit requisite information, the Appellant did not submit clear and unambiguous financial information alongwith certificates of Chartered Accountant. Therefore, the CCI has made the 'best estimates' based on the information submitted which has been cogently dealt with and reflected in the Impugned Order. 206. The relevant provision in Section 27 regarding imposition of penalty in the Competition Act, 2002 is as follows:- "Orders by Commission after inquiry into agreements or abuse of dominant position 27. Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely: - Xx xx xx xx (b) impose such penalty, as it may deem fit which shall be not more than ten per cent. of the average of the turnover for the last three preceding financial years, upon each o....
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....in the impugned order as follows:- '624. In this connection, it would also be apposite to refer to the decision of the Hon'ble Supreme Court of India in Excel Crop Care Limited v. Competition Commission of India & Anr, Civil Appeal No. 2480 of 2014 wherein the Hon'ble Supreme Court considered the issue as to whether penalty under Section 27(b) of the Act should be imposed on the total/ entire turnover of the offending company or only on "relevant turnover". The Hon'ble Supreme Court opined that adopting the criteria of 'relevant turnover' for the purpose of imposition of penalty will be more in tune with the ethos of the Act and the legal principles which surround matters pertaining to imposition of penalties. While reaching this conclusion, the Hon'ble Supreme Court recorded the following reasons: "..When the agreement leading to contravention of Section 3 involves one product, there seems to be no justification for including other products of an enterprise for the purpose of imposing penalty. This is also clear from the opening words of Section 27 read with Section 3 which relate to one or more specified products. It also defies common sense that though pe....
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....grams including various of apps and services that are integral feature of the mobile devices. In addition, the markets are multi-sided in the digital space, which is evidenced in the business model adopted by Google in the present case. While Google purports to offer its mobile OS 'free', there are a number of apps and services on the same device which give rise to huge traffic and data which are effectively monetized through advertisements which bring revenue to Google. It would, therefore, be correct to say that what is coming out of the revenue streams coming from the mobile devices have at that very base the OS of the device. The multi-sided nature of these digital platforms is clear from the fact that on one side there are the OEMs and app developers, while on the second side are the users that generate data and traffic, and on the third side are the advertisers who use these digital platforms for advertising their goods and services. 211. The substratum of Android OS on which the mobile ecosystem is based, is therefore, the foundation of Google ecosystem, comprising of Google search driven apps and other apps that derive data from users and funnel the traffic and data from ....
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....d thus the CCI has decided to take the sum total of revenue of various segments/heads of Google business operating pertaining to India while calculating the 'relevant turnover'. 215. We are, therefore, of the opinion that while calculating the "relevant turnover", the CCI has correctly considered the sum total of revenue of various segments/heads in India arising out of the entire business of Google India's operations of Android OS based mobiles. 216. We also note that Google has not provided the financial information as sought by the CCI vide its order dated 6.10.2021, and reiterated in its later order dated 17.10.2021. The inadequacy of the data supplied by Google has been mentioned in detail in paragraphs 630, 631, 632, 633 and 634, whereafter the CCI points out to significant inconsistencies and wide disclaimers in presentation of the requisite data by Google. In such a situation, CCI has carried out the "best estimation" on the basis of a financial statements and information submitted by Google. Therefore, we agree with the CCI's decision to quantify the monetary penalties on the basis of data presented by Google. In during so, also note that the CCI has considered the lower....