Google LLC Vs Competition Commission of India (Supreme Court of India)
Supreme Court held that as the appeal is pending before NCLAT, this court is desisting from entering a finding on the merits of the rival submissions which have been urged on behalf of the contesting parties.
Facts-
Invoking the appellate jurisdiction of this Court under Section 53T of the Competition Act 2002, the appellants have called into question an order of the National Company Law Appellate Tribunal dated 4 January 2023. NCLAT is in seisin of Competition Appeal (AT) No 1 of 2023 arising from an order of the Competition Commission of India dated 20 October 2022. While admitting the appeal, the NCLAT has directed the appellants to deposit 10% of the penalty quantified by the order of the CCI within three weeks. However, no stay has been granted in respect of the rest of the directions of the CCI which has resulted in the institution of the appeal before this Court.
Conclusion-
At the present stage, since the appeal is pending before NCLAT, we are desisting from entering a finding on the merits of the rival submissions which have been urged on behalf of the contesting parties. Any expression of opinion of this Court on the merits would affect the proceedings which are pending before the NCLAT. It would suffice to note that the findings which have been arrived at by the CCI cannot be held at the interlocutory stage to be either without jurisdiction or suffering from a manifest error which would have necessitated interference in appeal.
For the above reasons, while we are not inclined to interfere with the impugned order of the NCLAT.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Invoking the appellate jurisdiction of this Court under Section 53T of the Competition Act 2002, the appellants have called into question an order of the National Company Law Appellate Tribunal1 dated 4 January 2023. NCLAT is in seisin of Competition Appeal (AT) No 1 of 2023 arising from an order of the Competition Commission of India2 dated 20 October 2022. While admitting the appeal, the NCLAT has directed the appellants to deposit 10% of the penalty quantified by the order of the CCI within three weeks. However, no stay has been granted in respect of the rest of the directions of the CCI which has resulted in the institution of the appeal before this Court.
2. The principal grievance which was urged, when the appeal was taken up, was that while on the one hand, NCLAT noted that “urgency has been shown in passing interim order”, the appeal has been directed to be listed on 3 April 2023 but there has been no expression of opinion, prima facie, on the merits of the order in appeal with a view to evaluating whether a case for interim stay was made out.
3. The NCLAT noted that the order of the CCI was dated 20 October 2022 but the appeal was filed nearly two months thereafter on 20 December 2022 and when the appeal was taken up on 4 January 2023, the application for interim stay was pressed. NCLAT has not granted an interim stay.
4. Dr AM Singhvi, senior counsel appearing on behalf of the appellant has submitted that :
(i) This Court may decide the merits of the application for the grant of an interim stay though NCLAT has not done so;
(ii) NCLAT is seized of a statutory appeal which should not be rendered infructuous by the appellate forum having not decided on the merits of the interim application;
(iii) The order passed by CCI suffers from a manifest error in that there is no finding that there has been an abuse of dominance in India within the framework provided by Sections 3 and 4 of the Competition Act 2002;
(iv) As regards the anti-fragmentation obligation on Original Equipment Manufacturers, Google would ensure allowing smart phone and tablet makers who licence Play and Search to distribute incompatible smart phones and tablets.
5. Mr N Venkataraman, Additional Solicitor General appears on behalf of the first respondent. We have also heard Mr Mukul Rohatgi, Mr Rajshekhar Rao and Mr Jayant Mehta, senior counsel on behalf of the interveners.
6. NCLAT has listed the appeal for final hearing on 3 April 2023. It has not entered into an analysis of the correctness of the order which has been passed by the CCI.
7. This Court had the option of either remitting the proceedings back to NCLAT for a rehearing of the application for interim relief on merits or considering whether a case for the grant of interim relief in the appeal has been made out on the basis of the materials on the record. We have adopted the second course of action. Remitting the matter back to NCLAT for a detailed hearing on the merits of the application for interim relief would result in a delay in the final disposal of the appeal in accordance with the time schedule which has been set out in the order of NCLAT. Since the entire proceeding is pending before the NCLAT in appeal, this Court while assessing the merits of the order of the CCI should on the basis of a prima facie evaluation, determine whether interference at this stage is warranted.
8. At this stage, it would be necessary to advert to the directions which have been issued by the CCI in its order dated 20 October 2022. In paragraphs 617, 618 and 618, the following directions have been issued by the CCI :
“617. Accordingly, in terms of the provisions of Section 27 of the Act, the Commission hereby directs Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act, as detailed in this order. Some of the measures, in this regard, are indicated below:
617.1 OEMs shall not be restrained from (a) choosing from amongst 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.
617.2 Licensing of Play Store (including Google Play Services) to OEMs shall not be linked with the requirement of pre-installing Google search services, Chrome browser, You Tube, Google Maps, Gmail or any other application of Google.
617.3 Google shall not deny access to its play service apps to disadvantage OEMs, app developers and its existing or potential competitors. This would ensure interoperability of apps between Android OS which complies with compatibility requirements of Google and Android Forks. By virtue of this remedy, the app developers would be able to part their apps easily onto Android forks.
617.4 Google shall not offer any monetary/other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services.
617.5 Google shall not impose anti-fragmentation obligations on OEMs, as presently being done under AFA/ACC. For devices that do not have Google’s proprietary applications pre-installed, OEMs should be permitted to manufacture/develop Android forks based smart devices for themselves.
617.6 Google shall not incentivise or otherwise obligate OEMs for not selling smart devices based on Android forks.
617.7 Google shall not restrict uninstalling of its pre-installed apps by the users.
617.8 Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points. Users should have the flexibility to easily set as well as easily change the default setting in their devices, in minimum steps possible.
617.9 Google shall allow the developers of app stores to distribute their app stores through Play Store.
617.10 Google shall not restrict the ability of app developers, in any manner, to distribute their apps through side-loading.
