Google calls CCI fine for distributing mobile apps ‘unfair taxation’

Tech giant Google told the NCLAT on Friday that there was an “unfair imposition” by competition watchdog CCI on its mobile app distribution deal with device makers because it does not prevent the installation of other applications, including those of competitors.

A two-member NCLAT bench headed by the presiding judge, Judge Ashok Bhushan, said on Friday it would begin daily hearings in the case from February 23, the next court date.

Google, while arguing its case before the National Company Law Appellate Tribunal (NCLAT), said placing its apps on devices via pre-installation under the Mobile Application Distribution Agreement (MADA) is not “unfair because there are no restrictions on installing other apps. and enough space is available for them.

The appeals court was hearing a plea filed by Google against a Rs. 1,337 crore fine imposed by fair trade regulator CCI for abusing its dominant position in Android mobile devices.

Under MADA, OEMs (original equipment manufacturers) must have Google Mobile Suite (GMS) when installing Google’s Android operating system. It cannot be uninstalled.

Lead attorney Arun Kathpalia, representing the global IT major, said its apps, which are simply pre-installed “do not translate into dominance”.

There is no pre-installation embargo on other apps and Android users can download apps like WhatsApp, Instagram, Twitter from its Play Store as per their choice. In 2021, 26 billion app downloads were recorded.

Moreover, contrary to this, OEMs are also happy with GMS as they said these apps make their products more salable, Kathpalia added.

“Where is the harm for the OEM and the users in this?” he said, adding that CCI’s order reflected an “injustice”.

It charges no royalties and ensures a healthy ecosystem, Kathpalia said. He added that Google does not have a closed system like Apple.

“There is huge competition within the Android ecosystem,” he added.

On October 20 last year, CCI imposed a penalty of Rs. 1,337.76 crores on Google for anti-competitive practices regarding Android mobile devices. In the October ruling, CCI also ordered the internet major to cease and desist from various unfair business practices.

The NCLAT, an appellate authority on ICC orders, had begun its hearing in the Android case on February 15, following a direction from the Supreme Court. The Supreme Court had ordered the NCLAT to rule on the appeal by March 31.

Earlier, a separate NCLAT bench issued an opinion on Google’s plea on January 4, ordering it to pay 10% of the rupees. Fine of 1,337 crores imposed by the ICC. He had refused to stay the ICC order and submit the case to a final hearing on April 3, 2023.

This was challenged by Google in the Supreme Court, which also declined to stay the TCC order but ordered the NCLAT to rule on Google’s appeal by March 31.