Clipped from: https://www.thehindubusinessline.com/opinion/editorial/nclat-has-rapped-google-but-not-hard-enough/article66684025.ece
NCLAT has set aside CCI’s four critical directions which would have given the Indian start-up ecosystem a level playing field
On the face of it, the ruling by the National Company Law Appellate Tribunal (NCLAT) on the Android ecosystem seems to have struck a balance between the concerns of anti-competitive conduct by Google on one hand and the possible collapse of the tech giant’s business model on the other. But in reality, the balance of power is still tilted in favour of the American giant.
Even though the appellate tribunal has upheld the findings of the Competition Commission of India (CCI) that Google abused its market dominance to keep out smaller rival players, it set aside the Commission’s four critical directions which would have given the Indian start-up ecosystem a level playing field. For example, NCLAT has set aside CCI’s order to allow uninstalling of Google’s pre-installed apps on Android devices. When dominant applications such as Gmail, Youtube and Google Maps come preinstalled on Android phones, it already becomes an entry barrier for new players. Now, without the ability to uninstall Google apps, users may not even download a new application because smartphones come with limited storage capacity.
Citizens of a potential digital powerhouse such as India need an environment of geunine choice. But the very nature of Google’s online products and services allows it to wield tremendous influence over anyone with Internet access. From influencing consumer shopping behaviour to determining the political destiny of countries, Google (and some other tech giants) looms large over how we live in the modern world. This dominance enables Google to act in a manner that is not just anti-competitive but also anti-consumer. For instance, Google said it will enforce rules that require app developers on its Play Store to use its in-app payment system instead of independent payment systems. This implies developers would perforce have to use Google’s billing system, which takes a 30 per cent fee for every transaction. Although the decision has been modified after protests from developers, it suggests overtly monopolistic tendencies. Meanwhile, CCI has separately fined Google ₹936.44 crore for abusing its dominant position with regard to its Play Store billing and payment policy. Google has challenged this in court. NCLAT’s l verdict on this crucial issue can have a serious impact on India’s burgeoning start-up ecosystem. There has been a rapid growth in deep-tech start-ups focussed on products and services based on high-end engineering. However, they need to have a free and fair market environment to scale up their businesses.
India’s courts could take a leaf out of the European Commission’s 2017 order where Google was asked to pay $2.4 billion in fine for exploiting its virtual monopoly over search. The judgment is an example of one of the few serious attempts to bring the tech giant to book. The NCLAT’s order confirms Google’s poor record in upholding competition rules. But more needs to be done to manage these monopolies.