NCLAT rejects Google's plea against CCI order, asks tech giant to deposit ₹1,337 cr fine

In a major setback to Alphabet-owned Google, the National Company Law Appellate Tribunal (NCLAT), on Wednesday, rejected the company’s plea against the Competition Commission of India’s (CCI) penalty of ₹1,337 crore. The NCLAT has asked the tech giant to pay the amount of ₹1,337 crore within 30 days.

India's antitrust watchdog had imposed a fine on Google for unfair business practices in the Android ecosystem and Play Store in October last year. The CCI had slapped two penalties worth ₹1,337.76 crore and ₹936.44 crore, respectively, following an investigation, against the US-based tech giant for anti-competitive practices in its Play Store policies as well as the Android mobile ecosystem.

Following this, on December 23 last year, Google approached the NCLAT challenging the regulator's order. However, on January 6 this year, NCLAT refused to grant interim relief to the tech giant. On January 19, the matter was listed in the Supreme Court where the apex court asked the NCLAT to decide the matter by March 31.

An NCLAT bench led by Justice Ashok Bhushan and Dr Alok Srivastava said that the CCI’s investigation against Google does not violate the principles of natural justice. Google has repeatedly denied claims made in CCI’s investigations stating that its presence in the Indian market doesn’t mean abuse of dominance.

The competition regulator accused Google of perpetuating and leveraging its dominant position in the online search and app store market, resulting in a denial of market access for competing search apps and protecting its position in online general search. The CCI said it examined various Google practices regarding licensing of its Android mobile operating system and proprietary mobile apps like Play Store, Google Search, Google Chrome, and YouTube, among others.

The CCI had stated that it found "glaring inconsistencies and wide disclaimers" in revenue data points presented by Google. "In the interest of justice and with an intent of ensuring necessary market correction at the earliest, the CCI quantified the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the CCI imposed a penalty at 7% of its average relevant turnover amounting to ₹936.44 crore upon Google on a provisional basis, for violating Section 4 of the Act."

Google had then said the CCI's order against it was a "setback" for Indian users and businesses, and that it will seek a stay on the order.

Earlier in January, Google announced major changes to its Android operating system and app store Play after CCI’s October 20 ruling. The tech giant had then said that Indian users will now have the option to choose their default search engine via a choice screen that will soon start to appear when a user sets up a new Android smartphone or tablet in India. It also said that original equipment manufacturers will now be able to license individual Google apps for pre-installation on their devices.