Google has been accused of ‘Abuse of Dominant Position’ as per Section 4(2)(a)(i) of Competition Act, 2002 (Act) in the case of Umar Javeed Vs Google LLC (Competition Commission of India).
Section 4(2)(a)(i) of the Act reads as follows-
Abuse of dominant position-
(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise,—
(a) directly or indirectly, imposes unfair or discriminatory –
(i) condition in purchase or sale of goods or services;
Now, what is abuse of dominant position and how it is relevant in the case of Google ?
Abuse of dominant position refers to a situation where a market-giant misuses its strong position and limits the competition by whatever means.
What Google actually did to limit the competition: It being the owner of Android, made some android applications mandatory for the Android phones. Applications like Google Play Store, YouTube, Google Search, etc. Google enters into multiple agreements like Mobile Application Distribution Agreement (MADA) which makes it compulsory that prominent applications like Google Chrome, YouTube, Play Store, etc. be pre-installed in the Android devices.
This condition together with status quo, made it impossible for other competitors to have same opportunity as Google and thereby, creating entry barriers for competitors.
Google in response, said that it faces competitive constraints from Apple. The Bench observed the difference between the business models of Apple and Google.
Apple offers exclusive devices with exclusive services whereas Google emphasises on increasing users on its platform who avail revenue generating services.
The Bench held that the condition of pre-installation of applications under MADA and no option to un-install the same leads to imposition of unfair condition on device manufacturers and thereby restricting the market for other players. Thus, Google violated the Section 4(2)(a)(i) of the Act by creating entry barriers and restricting the competition in the sector.
Section 27 of the Act empowers the CCI to impose penalty on the defaulters. Exercising the powers, the Bench imposed a penalty of Rs. 1337.76 crores on Google, it further issued a seize and desist order against Google from indulging in anti-competitive practices that have been found to be in contravention of Section 4 of the Competition Act. Google was also directed to modify its practices within the stipulated time limit.
The matter is now pending with Hon’ble SC. The Act doesn’t define ‘dominant position’, it’s based on facts of the matter(s). One way out for Google is to prove that it doesn’t have a dominant position, like Jio did once.
Note: This is just an expression of opinion and not a legal advice.
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