The Supreme Court on Wednesday agreed to list on January 16 Google’s appeal against the NCLAT order that refused any stay of the ten remedial directions issued by the Competition Commission of India (CCI). This has come in the nick of time for Google as the three- month window allowed in the CCI’s landmark order of October 20 last year, for the tech giant to bring its conduct in line with guidelines, expires on January 19.
On Wednesday, Manu Singhvi, Senior Counsel representing Google, made an urgent mention before Chief Justice D Y Chandrachud, whereupon the CJI agreed to list the Google appeal on an urgent basis on Monday (January 16). The Supreme Court is the last forum for Google to block the anti-trust ruling issued by the CCI on October 20 in the Android platform.
The CCI had, on October 20 last year imposed a penalty of ₹1,337 crore (about $161 million), besides issuing ten non-monetary directions (remedial directions) against Google, which among other things required it to change entirely its business model. The penalty was imposed on Google for abuse of its dominance in various markets of the Android ecosystem. Android powers 97 per cent of smartphones in India, which is now the world’s second largest smartphone market, after China.
CCI’s remedial directions will require Google to make far-reaching changes to the Android mobile platform, which has been in place for the last 14-15 years, and force it to modify its existing contracts, introduce new licence agreements and alter its existing arrangements with more than 1,100 device manufacturers and thousands of app developers, noted the 739 page appeal filed by the tech giant before the apex court.
“Tremendous advancement in growth of an ecosystem of device manufacturers, app developers and users is at the verge of coming to a halt because of the remedial directions,” the memorandum of appeal highlighted.
GROUNDS OF APPEAL
In the appeal before the Supreme Court, Google has contended that the National Company Law Appellate Tribunal (NCLAT) had erred in summarily rejecting its request for a stay on the Remedial Directions on an inadequate and unjustifiable reason.
Google has also contended that the Tribunal had erred in making the admission of Google’s NCLAT Appeal against the Commission’s Order subject to a pre-deposit amount.
The statutory provision does not impose any condition of pre-deposit for entertaining the appeal. Therefore, right to file the appeal and have the said appeal decided on merits, if it is filed within the period of limitation, is conferred by the statute and that cannot be taken away by imposing the condition of deposit of an amount leading to dismissal of the main appeal itself, if the said condition is not satisfied, according to Google.
Google has also contended that NCLAT has failed to appreciate that the penalty directions issued by the Commission are illegal.
What NCLAT ruled
While declining interim relief to Google, the NCLAT Bench comprising Justice Rakesh Kumar, Member (Judicial) and Alok Srivastava, Member (Technical), observed on January 4 that they had come at the eleventh hour and that the records are voluminous in nature. The NCLAT bench highlighted that the CCI order was passed on October 29 last year and the appeal was filed on December 20, 2022 (60th day).
“..once order was passed in the month of October, had there been any such urgency it was expected that the appellant would have approached the tribunal forthwith, However, in this case no such urgency was shown in filing of the appeal and as such the appellant may not be permitted to insist for interim order, that too once we are giving short date to final hearing of the appeal “, said the NCLAT in its order of January 4.
NCLAT admitted Google’s appeal on January 4 and directed that 10 per cent of the penalty be deposited. No other interim order has been passed by NCLAT. A final hearing on the matter was fixed for April 3.
Further, the Court rejected Google’s argument of Android’s benefit and influence on consumers, stating that the question is about Google’s anti-competitive practices and abuse of dominance.