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Google established digital data dominance, CCI colleges ahead of NCLAT


Fair trade regulator CCI on Thursday alleged that Google has established a dominance in digital data and called for a market space with “free, fair and open competition.”

Concluding the arguments of the Competition Commission of India (CCI) before the NCLAT Court of Appeal in the Google matter, the Additional Advocate General said that. Venkataraman said a more free market for all players would be fully in sync with the principles of free competition rather than the ‘walled garden’ of Internet specialization.

On October 20 last year, CCI imposed a penalty of Rs. 1,337.76 crore on Google for anti-competitive practices in relation to Android mobile devices. It also ordered the internet regulator to cease and desist from various unfair business practices.

This ruling has been challenged by the National Corporate Law Appeals Tribunal (NCLAT).

On Thursday, Venkataraman said Google used the money-making search engine as the “fortress” and the rest of the apps to play the defensive role of the “moat”. This ‘castle and moat’ strategy is data dominance, which means that a large player in the market tends to get bigger and bigger while a small entrant struggles to reach a critical mass of users and user data.

According to him, data capture and dissemination are exploited and converted into advertising revenue. Where choice is the guiding principle of competition law, Google’s dominance reduces choice and competition.

Venkataraman stressed that implementing the remedies offered by CCI would go a long way towards having a freer market for all players, which would be fully in sync with principles of free competition rather than Google’s “walled garden” approach.

Proven abuse of dominance by Google in each of the criteria set forth in Section 4 of the Competition Act in terms of mandatory pre-installation, excellent placement, and basic application bundling. He said such practices lead to the imposition of unfair conditions and complementary obligations.

He also noted that restricting apps enabled Google to use its dominant position in one relevant market to enter and protect other related markets.

In his submissions, Venkataraman mentioned that big data portals like GST and UPI, which contain data of crores of persons and entities, are being run for the public good by public institutions.

However, when it comes to private entities, engaging in digital business where there is a steady and unstoppable flow of data and traffic, the same is calibrated with resources solely for the benefit of these entities. He pointed out that competition law is one of the important pillars in democratizing data and achieving the goal of the greatest benefit to the largest number.

NCLAT began hearing the Android case on February 15, following a directive from the Supreme Court. The Supreme Court had directed NCLAT to decide on the appeal by March 31.

On January 4, a separate body of NCLAT issued notice of Google’s appeal, directing it to pay 10 per cent of Rs. 1,337 crore penalty imposed by CCI. It has declined to put CCI’s order on hold and has brought the matter to a final hearing on April 3, 2023.

This was challenged by Google to the Supreme Court, which also refused to suspend the CCI order but directed NCLAT to decide on Google’s appeal by March 31.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.