Competition Commission of India (CCI) has decided to approach the Supreme Court in an appeal against the recent NCLAT ruling in the Android case where it held that “effects analysis” must be done by the competition authorities for proving any abuse of dominance under Competition Law.

The NCLAT direction is seen to be problematic for CCI as it would mean that it would have to show effects in all Big Tech cases, including those currently being investigated.

CCI is likely to file an appeal on the “effects analysis” test mandated by NCLAT, sources said, adding that CCI has till date consistently rejected the arguments that it should adopt  effects test for proving abuse of dominance. 

CCI appears to be concerned that the other cases should not be affected by the NCLAT direction on “effects doctrine” and may have therefore decided to move the Supreme Court in appeal against the NCLAT order, a Competition law expert noted.

CCI has sixty days window to file an appeal against the NCLAT order, which was issued on March 29.

CCI has been taking a stance that when it comes to abuse of dominance there is no question of proving effects since ability to cause adverse effects  is in-built once an entity is found to be dominant.

The NCLAT ruling regards effects analysis as significant as the CCI had refrained from undertaking any effects analysis in conduct cases and the past rulings rendered by CCI, which are pending in appeal, are likely to become vulnerable if the NCLAT ruling is not overturned.

Presently, the law does not require competition watchdog to establish ‘actual effects’ of the anti-competitive conduct of dominant undertakings. 

Even the Competition (Amendment) Bill 2023, which was recently passed by both Houses of Parliament, did not include or stipulate “effects analysis” for proving abuse of dominance despite Parliamentary Standing Comiittee batting for it.

Also read: Big Tech crackdown looms as EU, UK ready new rules

The introduction of effects-based doctrine was a key demand of the big tech industry and the representatives of the sector deposed before the Parliamentary panel seeking its incorporation into the law. 

Parliamentary Standing Committee on Finance headed by Jayant Sinha had recommended that ‘effects’-based approach be incorporated in the Competition Act for examining the cases of abuse of dominance. The Government, however, rejected this suggestion.

Crucially, Google has this past week in the Android case deposited the entire ₹1,337 crore penalty as mandated by NCLAT within the 30 days window. 

It is surprising to see that when Google has not chosen to prefer an appeal (for now) and seems to have reconciled with the reduced behavioural directions, the regulator (CCI) is going ahead to file the appeal against the NCLAT order, an economy watcher said. 

It maybe recalled that NCLAT order had also brought some partial victory for the tech giant with four of the ten non monetary conditions imposed by CCI getting set aside by the Appellate Tribunal.

The four directions set aside related to allowing users to uninstall the preloaded apps, allowing sideloaded apps, sharing of APIs and allowing of third party app stores in Play Store.

However, Google had to comply with six non monetary directions.

The six non-monetary directions that Google had to comply with in the 30 days window from March 29 are: OEMs shall not be restrained from (a) choosing from Google’s proprietary applications to be pre-installed and should not be forced to pre-install a bouquet of applications and (b) deciding the placement of pre-installed apps on their smart devices; licensing of Play Store to OEMs shall not be linked with the requirement of pre-installing Google applications.

Google shall not offer any monetary/other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services.

Google shall also not impose anti-fragmentation obligations on OEMs, OEMs should be permitted to manufacture/ develop Android forks based smart devices for themselves. Additionally, Google shall not incentivise or obligate OEMs for not selling smart devices based on Android forks; and it shall allow users, during the initial device set-up, to choose their default search engine for all search entry points.

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