Tech giant Google has asserted that the eight non-monetary directions issued by the Competition Commission of India (CCI) in its October 25 ruling of last year in the Google Play Store policies case are ‘ex-ante’ in nature and antithetical to Competition Act 2002.
The remedial directions are therefore beyond the jurisdiction of the Competition watchdog, Google said in its appeal before Supreme Court filed just days before the apex court’s landmark ruling in the Android matter.
Also, in its latest appeal, Google has contended that six out of the eight remedial directions are not based on any finding of infringement against it under the Competition Act and claimed that the law requires a finding of infringement before the Commission can pass remedial directions.
The remedial directions purport to subject Google to the regulatory supervision of the CCI and direct ‘how business should be done’, even though no such power exists under the Competition Act. In doing so, the CCI has exceeded its jurisdiction and stepped into the role of a sectoral regulator or Parliament, which it is not, Google appeal noted.
The CCI’s “ultra vires” directions will have far-reaching implications on Google’s businesses and harm end users and developers of applications (commonly referred to as “apps”), Google contended.
Also, Google has alleged that the CCI order has denied the obligation to look into “effects”, claiming that ‘effects doctrine’ (i.e., harm to competition is a necessary element for a finding of abuse of dominance) is well established under Competition law.
The Play Store policies case is the second case, the first being the Android matter, which saw the competition watchdog imposing monetary penalty besides issuing non-monetary directions on the tech giant for its anti-competitor conduct.
In the Play Store policies case, the CCI had on October 25 last year — five days after its ruling in the Android matter—imposed a monetary penalty of ₹936.44 crore and issued a cease and desist order besides series of directions, which will prise open Google’s walled garden “Play Store”.
The penalty was imposed by CCI on Google for abusing its dominant position in Play Store.
The case pertains to Google’s Play Store policies that require App developers to exclusively and mandatorily use Google Play’s Billing System (GPBS) not only for receiving payments for Apps (and other digital products like audio, video, and games) distributed/sold through the Google Play Store but also for certain in-app purchases like purchases made by users of Apps after they have downloaded/ purchased the App from the Play Store.
Further, app developers cannot, within an app, provide users with a direct link to a webpage containing an alternative payment method or use language that encourages a user to purchase the digital item outside of the app (anti-steering provisions).
Google had, on December 23 last year, filed the NCLAT Appeal against the CCI Order in the Play Store policies case and sought an interim stay to prevent the coming into force of the Remedial Directions pending its appeal (Stay Application).
In its Stay Application before NCLAT, Google demonstrated the necessity of staying the Commission’s order, highlighting that the remedial directions were without jurisdiction, ultra vires, passed without establishing the foundational fact of infringement, abuse of dominance and are unsupported by any evidence on the Commission’s file, and issued in violation of due process.
However, NCLAT had on January 11 this year —without considering and deciding Google’s interim Stay Application —restricted itself to admitting the NCLAT Appeal subject to payment of 10 per cent of the penalty. Further, the matter was listed for hearing on April 17 (almost 12 weeks post the deadline for Google to comply with the eight Remedial Directions).
Google has in its latest appeal contended that the NCLAT direction to treat the 10 per cent payment as a condition for admission is ex-facie illegal. Google’s NCLAT Appeal subject to a pre-deposit of 10 per cent ought to be set aside, the tech giant has appealed to the Supreme Court.
Eight non-monetary directions
The eight directions include requiring Google to allow and not restrict app developers from using any third-party billing/payment processing services, either for in-app purchases or for purchasing apps; Google should not impose any anti-steering provisions on app developers and should not restrict them from communicating with their users to promote their apps and offerings, in any manner.
Also, Google should not restrict end users, in any manner, to access and use within apps, the features and services offered by App developers. Google should not impose any condition (including price-related conditions) on app developers, which is unfair, unreasonable, discriminatory, or disproportionate to the services provided to the app developers.
The CCI has also directed Google not to discriminate against other apps facilitating payment through UPI in India VIS-a-VIS its own UPI app in any manner.