Google’s Antitrust Penalty Slashed by 75% as NCLAT Partially Overturns CCI Order

The National Company Law Appellate Tribunal (NCLAT) has granted partial relief to American tech giant Alphabet, the parent company of Google, in a 2022 antitrust case. The tribunal reduced the Competition Commission of India's (CCI) penalty from Rs 936.44 crore to Rs 216.69 crore. While NCLAT upheld CCI’s findings that Google abused its dominant position, it ruled that the company did not deny market access to other players.

In October 2022, CCI found Google’s Play Store policies to be anti-competitive. It ruled that Google forced app developers to use its Google Play Billing System (GPBS) for in-app purchases and imposed unfair service fees. The complaint was filed by the Alliance of Digital India Foundation, which accused Google of preventing app developers from listing their apps unless they adopted GPBS.

CCI also flagged Google’s preferential treatment of its own services, such as YouTube and Google Pay, which were not required to use GPBS.

This was Google’s second major penalty that year, following a Rs 1,337.76 crore fine for allegedly abusing its dominance in the Android ecosystem.

In January 2023, Google challenged CCI’s order at NCLAT, arguing that the penalty was excessive and that its billing system was not anti-competitive. The company claimed its Play Store service fees were justified and aligned with global industry norms. Google also contended that CCI failed to establish actual harm to competition.

NCLAT’s Verdict

In its March 28 order, an NCLAT bench led by Justice Ashok Bhushan upheld some of CCI’s findings, confirming that Google leveraged its dominance to promote its own services and imposed unfair conditions on app developers.

However, the tribunal overturned CCI’s claim that Google denied market access to payment processors, noting that only a small percentage of Play Store transactions were processed via GPBS.

NCLAT also dismissed allegations that Google’s pricing structure for different developers was discriminatory, citing a lack of conclusive evidence.

NCLAT reduced the penalty by 75% to Rs 216.69 crore, citing insufficient grounds for the original fine. Google now has 30 days to pay the revised penalty, of which it has already paid 10%. Some analysts argue that monetary penalties are ineffective in curbing anti-competitive behaviour among dominant tech firms.

The ruling provides relief to Google, which controls nearly 95% of India's smartphone market through its Android operating system. However, calls for stricter regulations against Big Tech continue to grow.