Back
2023 Supreme(Online)(SC) 13359
Dr Dhananjaya Y Chandrachud, CJ, Pamidighantam Sri Narasimha, J, J B Pardiwala, J
Google LLC – Appellant
Versus
Competition Commission of India – Respondent
Civil Appeal No 229 of 2023
For the Appellants/Petitioners: Dr Abhishek Manu Singhvi, Sr. Adv., Mr. Maninder Singh, Sr. Adv., Mr. Arun Kathpalia, Sr. Adv., Mr. Vijendra Pratap Singh, Adv., Mr. Ramsekhar Nair, Adv., Mr. Parhasarthi Jhal, Adv., Ms. Hemangini Dadwal, Adv., Mr. Toshit Shandilya, Adv., Ms. Arunima Chatterjee, Adv., Mr. Mohith Gauri, Adv., Ms. Saijobani Basu, Adv., Mr. Uday Khanna, Adv., Mr. Prabhas Bajaj, Adv., Ms. Deepanshu Poddar, Adv., Mr. Atish Ghoshal, Adv., Mr. Param Tandon, Adv., Ms. Ketki Agrawal, Adv., Ms. Bhaavi Agrawal, Adv., Mr. Abhisar Vidyarthi, Adv., Mr. Aman Sharma, Adv., Mr. Aditya Dhupar, Adv., Mr. Snehasish Mukherjee, AOR
For the Respondents: Mr. N. Venkatraman, Sr. Adv., Mr. Samar Bansal, Adv., Mr. Manu Chaturvedi, Adv., Mr. Tahir Ashraf Siddiqui, AOR, Mr. Chandrashekhar Bharati, Adv., Mr. Madhav Gupta, Adv., Mr. Vedant Kapur, Adv., Ms. Shireen F. Khan, Adv., Ms. Ria Dhawan, Adv., Mr. Mukul Rohatgi, Sr. Adv., Mr. Rajshekhar Rao, Sr. Adv., Mr. Naval Chopra, Adv., Mr. Ajit Warrier, Adv., Ms. Shally Bhasin, Adv., Mr. Yaman Verma, Adv., Mr. Amit Singh Sethi, Adv., Mr. Ritwik Bhattacharya, Adv., Mr. Prateek Gupta, Adv., Ms. Chandni Anand, Adv., Mr. Prateek Yadav, Adv., Ms. Parinita Kare, Adv., Mr. S. S. Shroff, AOR, Mr. Jayant Mehta, Sr. Adv., Mr. Lzafeer Ahmad B. F., AOR, Mr. Abir Roy, Adv., Mr. Vivek Pandey, Adv., Mr. Aman Shankar, Adv., Ms. Sukanya Viswanathan, Adv., Mr. Srikar Pagadala, Adv., Mr. Abir Roy, Adv., Mr. T. Sundar Ramanathan, AOR, Mr. Vivek Pandey, Adv., Mr. Aman Shankar, Adv., Ms. Sukanya Viswanathan, Adv.
The court upheld that the findings of CCI regarding Google's anti-competitive practices cannot be disregarded at the interlocutory stage, emphasizing the need for expedited proceedings.
Headnote:(A) Competition Act, 2002 - Sections 3, 4, and 53T - Appeal against order of NCLAT concerning penalty imposed on Google by CCI for anti-competitive practices - The principal grievance was the denial of an interim stay due to lack of prima facie opinion from NCLAT on merits. (Paras 1-2, 4)
(B) Abuse of Dominance - The court noted that CCI's assessment did not disclose an abuse of dominance by Google, emphasizing the complexities regarding OEM agreements under MADA. CCI found anti-competitive practices through mandatory application pre-installation to distort competition. (Paras 8-12)
Facts of the case:
The appeal arises from a CCI order which directed Google to cease anti-competitive practices related to app pre-installation on smartphones and quantified a penalty based on revenue.
Findings of Court:
The findings by CCI support that Google’s practices could restrict market competition, underlining the manipulative nature of its contract terms.
Issues: The key issues included whether CCI had properly established anti-competitive behavior and if interim relief should be granted.
Ratio Decidendi: The court affirmed that while CCI may have limitations, its findings cannot be dismissed at this interlocutory stage; NCLAT should expedite its decision-making process.
Result: The appeal is disposed of affirmatively without granting interim relief.
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 “NCLAT” 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 “CCI” 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 fro
