Google Mulls Approaching Supreme Court After NCLAT Refuses, To Stay CCI's Rs 1,338-Cr Penalty Order

After facing a setback at NCLAT, which refused to stay a CCI order on abuse of dominant position in multiple markets in the Android mobile device ecosystem case, Google is mulling approaching the Supreme Court, according to sources. When contacted, Google declined to comment on the matter. While Google remained tightlipped about its next move, sources said that tech giant is considering moving the apex court by filing a Special Leave Petition.

On Wednesday, NCLAT had declined to stay the order passed by the Competition Commission of India (CCI), after observing that the order was passed on October 20, 2022 but the appeal against it was filed on December 20, 2022. The NCLAT had also directed Google to deposit 10 per cent of the penalty amount within three weeks.

"Be that as it may, once order was passed in the month of October, had there been any such urgency it was expected that the appellant would have approached this tribunal forthwith. However, in this case no such urgency was shown in filing of the appeal and as such the appellant may not be permitted to insist for interim order, that too once we are giving short date for final hearing of the appeal," it said.

On October 20 last year, CCI slapped a penalty of Rs 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. In the October ruling, CCI had also ordered the internet major to cease and desist from various unfair business practices. This was challenged by Google before NCLAT, which is an appellate authority over the CCI against any direction issued by the regulator. However, the National Company Law Appellate Tribunal (NCLAT) denied any immediate relief and said:

"We are of the opinion that at the moment, considering the voluminous nature of the appeal and the fact that date of final hearing is fixed on April 3, 2023 there is no need to pass any interim order." In its petition before NCLAT, Google has termed as "tainted" the investigations done against it by CCI, contending that the two informants on whose complaint the fair trade regulator has initiated the enquiry were working at the same office that was investigating the tech major. This was "against the principles of natural justice", Google said in the petition, adding the Competition Commission of India (CCI) should have refrained from initiating an investigation based on a complaint filed by their own employees.

"At the very least, the Commission could have debarred the Informants from working in the DG office while the investigation was ongoing, to ensure that the investigating officer was able to impartially assess the case without any influence, such that no concerns could arise on the independence of the investigation," said Google. According to Google's plea, CCI has failed to conduct an "impartial, balanced, and legally sound investigation" while ignoring evidence from Indian users, app developers, and OEMs.

Challenging the CCI order, Google said the findings are "patently erroneous and ignore" the reality of competition in India, Google's pro-competitive business model, and the benefits created for all stakeholders. "The Impugned Order is fraught with substantive, analytical, and procedural errors including inter alia ignoring exculpatory evidence, statements from Indian OEMs and developers, the Director General's (DG's) copy-pasting of conclusions from decisions of foreign authorities without any application of mind.

These errors led the Commission to make perverse and incorrect findings," it said. Google claimed the DG copy-pasted extensively from a European Commission decision, deploying evidence from Europe that was not examined in India or even on the Commission's file. "There are more than 50 instances of copypasting enclosed," Google pointed out.

The company also questioned the calculation of the penalty amount of Rs 1,337.76 crore, saying that it was on Google's total revenue from its entire business in India and CCI has "committed several legal errors" in doing so. "The Commission imposed a disproportionate and excessive penalty, contrary to established principles of competition law," Google said. It has also raised the issue of the absence of a judicial member at CCI and said, a final decision should only have been passed in this case by a quorum which includes a judicial member.

(PTI)