NCLAT upholds penalty on Google

National Company Law Appellate Tribunal (NCLAT) has upheld a penalty imposed by Competition commission of India (CCI) on Google.

• In a significant ruling, the NCLAT has upheld a penalty of Rs.1, 337.76 crore imposed by India’s competition regulation body on Google, for its anti-competitive conduct in the Android ecosystem.
• The tribunal held that a number of Google’s practices pointed to an abuse of dominance, which in some cases, had also stalled scientific development.
• It held that mandating pre-installation of its entire Google Mobile Suite (GMS) – a family of key Google apps and services– amounted to “imposing unfair conditions on Original equipment manufacturer (OEMs) which is an abuse of dominant position” by the company.
• By bundling products like its search engine or the Chrome browser, Google had perpetuated its dominant position.
• NCLAT stated that the CCI in its order against Google did not violate the principles of “natural justice” and based it on relevant material submitted to it.

CCI’s allegations on Google:

• Competition commission of India earlier found Google guilty for undertaking anti-competitive practices.
• The Competition Commission of India (CCI) says that Google’s business was found to be driven by the "ultimate intent of increasing users on its platforms”.
• Issues cited by CCI:
  • Google was found abusing its dominant position in multiple markets with its Android mobile operating system (OS).
  • It has used its dominant position in the online search market, resulting in the denial of market access to competing apps.
  • It has done the same in the Android app store market to protect its position in online general search, which violates competition law.

About National Company Law Appellate Tribunal (NCLAT):

• National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect from 1st June, 2016.
• Functions:
  • NCLAT is also the Appellate Tribunal for hearing appeals against the orders passed by NCLT(s) under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC), with effect from 1st December, 2016.
  • NCLAT is also the Appellate Tribunal for hearing appeals against the orders passed by Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
  • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI) – as per the amendment brought to Section 410 of the Companies Act, 2013 by Section 172 of the Finance Act, 2017, with effect from 26th May, 2017.

Composition:

• The President of the Tribunal and the chairperson and Judicial Members of the Appellate Tribunal shall be appointed after consultation with the Chief Justice of India.
• The Members of the Tribunal and the Technical Members of the Appellate Tribunal shall be appointed on the recommendation of a Selection Committee consisting of:
  • Chief Justice of India or his nominee—Chairperson.
  • A senior Judge of the Supreme Court or a Chief Justice of High Court— Member.
  • Secretary in the Ministry of Corporate Affairs—Member.
  • Secretary in the Ministry of Law and Justice—Member.
  • Secretary in the Department of Financial Services in the Ministry of Finance— Member.