CCI Fine of Rs. 936 Crore Remains Unchanged After Google Withdraws Supreme Court Appeal

CCI Fine of Rs. 936 Crore Remains Unchanged After Google Withdraws Supreme Court Appeal

The multinational tech company Google LLC on 17th April, withdrew its Supreme Court appeal against the National Company Law Appellate Tribunal's (NCLAT) order refusing a stay on the Competition Commission of India’s (CCI) Rs. 936 crore penalty for its alleged abuse of dominant position with respect to its Play Store policies, stating that the appeal had become infructuous.

In the legal jargon, the expression infructuous means ineffective, unproductive and unfruitful.

The three judges bench led by Chief Justice of India (CJI) Dr. DY Chandrachud, Justice P.S. Narasimha and Justice J.B. Pardiwala “dismissed as withdrawn” Google's appeal as the matter was likely to be heard by the NCLAT later this week. Senior counsel Harish Salve appeared for the Alphabet subsidiary.

Google has done so as it was pursuing its appeal against CCI’s order in NCLAT.

While refusing to stay the NCLAT order of January 4, the Supreme Court had on 19 January asked the appellate tribunal to decide Google’s appeal by 31 March. The Apex Court had also refused to grant a stay on the 10 non-monetary directions issued by the CCI in its 20th October, 2023 ruling.

The case dates back to October, 2022 when CCI had fined the tech giant for limiting app developers from using any third-party billing or payment processing services to purchase apps for in-app billing on Google Play Store. Google Play Store is a digital distribution service operated and developed by Google, from where mobile apps are downloaded.

The CCI reckoned that making access to Play Store, for app developers, dependent on mandatory usage of Google Play Billing System (GPBS) for paid apps and in-app purchases constitutes an imposition of an unfair condition on app developers. The CCI was of the considered view that Google was following discriminatory practices by not using GPBS for its own application – YouTube.

The competition watchdog further viewed, that mandatory imposition of GPBS disturbs innovation incentives and the ability of both the payment processors as well as app developers. It was held that imposing GPBS also results in the denial of market access for payment aggregators as well as app developers.

Subsequently, the CCI had directed Google to allow third-party billing or payment processing services, either for in-app purchases or for purchasing apps. Google was directed not to discriminate against apps using third-party billing or payment processing services in any manner. The CCI imposed a penalty of Rs 936.44 crore on Google and asked it to cease and desist from its anti-competitive practices with respect to Play Store

Therefore, the CCI had concluded that the practices followed by Google caused leveraging its dominance in the market for licensable mobile OS and app stores for Android OS, to protect its position.