NCLAT refuses interim relief to Google in appeal against CCI order imposing ₹936 crore penalty for Play Store policies

The National Company Law Appellate Tribunal (NCLAT) on Wednesday refused to grant interim relief to Google in its appeal against a Competition Commission of India (CCI) order imposing a penalty of ₹936.44 crore on it for abusing its dominant position through its Play Store policies..At the outset of today's hearing, a two-member Bench of Justice Rakesh Kumar, member (judicial) and Dr Alok Srivastava, member (technical) made it clear that it would not grant Google interim relief. It ultimately ordered,"Appeal admitted subject to deposit of 10% penalty imposed. Penalty to be deposited with Registrar in four weeks. Matter listed for final hearing on April 17. No interim order.".Appearing for Google, Senior Advocate Harish Salve argued,"I am seeking one interim relief today... What we are saying is if you are using our platform, use our payment method. Second, in the in app purchase, we said use our payment method. But later, we said others can be used as well, but we will be there too."The Bench responded,"Even when payment is made through other apps, it is all recorded. It is all there."In response, Salve said,"It is not the case that I am charging more."However, the Bench said,"It is not about that. It is about abusing dominant position."Salve then said,"Today, we are in a binary situation. If I am in dominant position, is it abusive if I ask some people to use my app/platform? Merely because I am dominant and I am asking for a contractual term does not make it abusive.""There are other payment apps...The CCI is only saying payments can be made through others as well...You are hurting others. There are other payment aggregators as well," was the Bench's reply.Salve then asked for an interim order allowing the status quo to remain till the appeal is heard finally.The Bench, however, was not inclined to do so."We are not passing any order today. We will hear it finally.".Based on its assessment, the Commission had found Google to be abusing its dominant position in the relevant markets of licensable operating systems (OS) for smart mobile devices and app stores for Android smart mobile OS in India.In addition to a monetary fine, the CCI had also directed Google to cease and desist from participating in anti-competitive practices and to modify its conduct within a defined timeline. It had thus passed the following directions to Google:1) Google shall allow, and not restrict app developers from using any third-party billing payment processing services, either for in-app purchases or for purchasing apps;2) Google shall not impose any anti-steering provisions on app developers and shall not restrict them from communicating with their users to promote their apps and offerings, in any manner;3) Google shall not restrict end users, in any manner, to access and use within apps, the features and services offered by app developers;4) Google shall set out a clear and transparent policy on data that is collected on its platform, use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities, including related entities;5) The competitively relevant transaction/consumer data of apps generated and acquired through GPBS, shall not be leveraged by Google to further its competitive advantage;6) Google shall not impose any condition (including price related condition) on app developers, which is unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers;7) Google shall ensure complete transparency in communicating to app developers, services provided, and corresponding fee charged and shall also publish in an unambiguous manner the payment policy and criteria for applicability of the fee(s);8) Google shall not discriminate against other apps facilitating payment through UPI in India vis-à-vis its own UPI app, in any manner..Before the NCLAT, Google will look to establish that the Commission’s directions put in peril technology, security and the choice that Play Store provides. According the company, the CCI failed to consider the benefits of Google Play and Android to Indian end-users, including benefits such as enabling mobile access as well as protecting end-users from malware and abusive billing practices..For the grant of interim relief, Google has challenged the CCI's directions on three counts.Firstly, the Commission had taken issue with how the UPI payment system operates on the Play Store. According to Google, this is no longer a live issue and stands resolved. The question of whether there was any lapse in the past and whether any penalty deserves to be imposed can be considered when the appeal is finally heard, it has argued.Secondly, the use of requiring app developers to use Google’s cash register - the Google Play Billing System (GPBS) when they sell their apps on its Play Store. This, the company claims, has been done for various good reasons - technical, security and commercial, and that requiring Google to provide other cash registers (alternate billing systems) in case of sale of apps is technically infeasible. Thirdly, the use of Google’s cash register for sale of digital content within the app.Google has pointed out that it is exploring how to provide users an additional billing option when they purchase digital content within an app. It has launched a pilot programme called the User Choice Billing Pilot (UCB Pilot), which enables an app developer to provide an alternative cash register. This pilot will help Google to increase its understanding of whether and how user choice billing works for users in different countries.In general, the company claims that the directions are not ‘cease and desist’, for no such practice that would offend the principles of the Competition Act, 2002 has been found.The CCI's directions, Google claims, are not founded on a contravention, and by their very nature are open-ended, lacking in specificity and incapable of any real compliance. It is also claimed that the directions are a hand-out to those who may want to pressure the Commission to initiate proceedings against Google for non-compliance and bypass the well-defined statutory scheme of investigation under the Competition Act..It thus sought interim relief in the form of a stay on the direction to allow developers to use alternative billing options for sale of their apps on the Play Store and take on record the fact that Google has already launched the UCB Pilot in India. Also sought is a stay on the penalty imposed subject to the deposit of 10% of the penalty amount..This is the second appeal filed by Google against the CCI order.The tech giant had earlier challenged an order of the CCI imposing a fine of ₹1,337 crore in relation to the Android systems case. However, the NCLAT refused to grant interim relief to Google, noting that the CCI’s order was passed in October 2022, while the appeal by Google was filed only in December 2022.The Appellate Tribunal opined that since no urgency was shown in filing the appeal, Google could not be allowed to insist on interim relief. This matter is now listed for final hearing in April. Besides Salve, Senior Advocate Sajan Poovayya also appeared for Google. The senior counsel were instructed by Partners Karan Chandhiok and Deeksha Manchanda from Chandhiok & Mahajan and Avaantika Kakkar and Kaustav Kundu from CAM..Read a detailed story on CCI's order imposing penalty on Alphabet for its Play Store policies here.