NCLAT Upholds Penalty of Rs.1337 Crore Imposed on Google

In an order dated March 29, 2023, the National Company Law Appellate Tribunal (NCLAT) upheld the decision of the Competition Commission of India (CCI) dated October 20, 2022, imposing a penalty of Rs.1337.76 Crore on Google for abusing its dominant position. The tribunal has granted 30 days’ time to Google for complying with the order and depositing the penalty amount.

An investigation was conducted into the anti-competitive practices adopted by the appellants, Google LLC and Google India Pvt. Ltd. after certain informants approached the CCI and alleged that the appellants have been abusing their dominant position in violation of provisions of the Competition Act, 2002. Thereafter, the commission held that the appellants had contravened provisions of the Act and imposed the said penalty vide order dated October 20, 2022.

Then, the appellants approached the NCLAT challenging the commission’s order. After hearing the parties and referring to several case laws, the tribunal decided that the appellants abused their dominant position by mandating the pre-installation of the entire Google Mobile Services (GMS) suite which was an “unfair condition” to impose on the Original Equipment Manufacturers (OEMs). Further, it was held that the tying up of the Google Chrome App and YouTube App with the Play Store was in violation of the Act’s provisions.

With respect to the amount of penalty imposed, the tribunal observed that the total revenue from all the apps and services in the device, such as Google Maps, Google Cloud, Gmail etc. (and not just Google Search and YouTube as contended by the appellants) amounts to “relevant turnover”. Accordingly, the tribunal upheld the imposition of a 10% penalty on Google’s average of relevant turnover for the last three financial years (i.e., 2018-19, 2019-20 and 2020-2021).