The Centre told the Supreme Court on Wednesday that the world is watching India on how it deals with U.S tech giant Google’s plea to seek a stay on a whopping ₹1,337 crore penalty imposed on the company for abusing its dominant position in the Android ecosystem as the top court agreed to take up the company’s application seeking stay of the order issued by the Competition Commission of India (CCI) in October.
The Centre, represented through additional solicitor general N Venkatraman, said, “This is a matter of primary importance. The world is looking at us.”
The bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud said, “We will list the matter tomorrow and confine ourselves to the arguments on merit for seeking stay.” Google had moved an application for staying the anti-trust regulator’s directive of October 20 on which it failed to obtain a stay from the National Company Law Appellate Tribunal (NCLAT) on January 4. The NCLAT had listed the matter in April, directing the company to pay 10% of the total penalty within three weeks.
Google LLC and its Indian arm Google India private limited had challenged the NCLAT order seeking stay on payment of the fine. The company led by senior advocate Abhishek Manu Singhvi will be opening arguments on Thursday.
As the matter came up for hearing, the court suggested to refer the matter back to NCLAT as it was yet to hear arguments on stay. “NCLAT has not looked into their (Google) application for stay. Instead of us doing it, we can ask the NCLAT to do the same. They can appear on Monday and we may pass an order of no coercive steps by extending the stay (on payment of penalty) for two weeks,” said the bench, also comprising justices Krishna Murari and PS Narasimha.
ASG Venkataraman said, “They cannot have two innings,” referring to Google taking a chance before the NCLAT first and then in the Supreme Court. “If it is going to end in NCLAT we can understand,” ASG added, requesting that the issue should be settled by the top court.
Singhvi told the court that even Google was in favour of the top court deciding on their stay application.
On Monday, when the matter came up for hearing, the court asked the US tech firm whether it was open to implementing similar standards in India as in Europe with regard to its Android mobile operating system. Last year, Google had paid a whopping 4.125 billion Euros to the European Union (EU) after losing its appeal in an antitrust case linked to its Android operating system. The European Court of Justice held that Google imposed “unlawful restrictions” on makers of Android smartphones while abusing the “dominant position of its search engine”.
The Centre had cited the EU court’s decision to suggest that Google cannot be discriminating against Indian users. Even on the stay application, Centre submitted, “Beginning October 20, they had time of 90 days to comply. The EU held them to be dominant and the sum of 4 billion Euros has been totally paid. We are a third-world country. How can they distinguish between Indian consumers and OS and European consumers and OS?”
The bench had then put to Singhvi, “What are the steps Google has put in place in the EU. Are you ready to put in place a similar compliance in India,” while posting the matter for Wednesday. The bench further observed that Google could have filed an appeal against CCI order in advance without waiting for the expiry of the two-month statutory period for filing in December.
“These are contrived emergencies which are created. We have also been at the bar. You create such an emergency that the tribunal is constrained to extend time,” the bench had observed on the earlier occasion.
Google claimed that the CCI order was to take effect on January 19 and it was well within time to challenge the decision. As its stay application would become fait accompli by the time the NCLAT hears the matter in April, the firm approached the top court for urgent orders.
Google’s plea before the top court said: “The Commission’s order undermines public interest, user safety and privacy for Indian Android users. It risks severe harm to Indian consumers and businesses, and opens new back doors to foreign actors looking to compromise the security of Indian Android device users.”
The tech firm was referring to the direction of the CCI to “allow developers of app stores to distribute their app stores through Play Store (Google’s Android app store).” The company said that third party app stores have a far greater risk of malware and “users and manufacturers will stop trusting Play Store as a secure distribution channel for apps in the future.”
The order of the commission came on a bunch of three petitions which accused Google LLC and Google India of abusing its dominant position under Section 4 of the Competition Act, 2002. They claimed Google’s preloaded apps in smartphones sold or manufactured in India hindered development of rival mobile applications in the market.
