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TMI Blog2023 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... ation bias? - HELD THAT:- The Commission proceeded to consider the materials on the record and submissions of the parties with respect to each of the market and recorded findings and conclusions after considering the evidence on record. Hence, we are unable to accept the submission of the learned Senior Counsel for the Appellant that the order of the Commission is replete with confirmation bias. Whether pre-installation of entire GMS Suite amounts to imposing of unfair condition on OEMs which is an abuse of dominant position by the Appellant resulting in breach of Section 4(2)(a)(i) and 4(2)(d)? - Whether the Commission, while returning its finding on breach of Section 4(2)(a)(i) and 4(2)(d), has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - HELD THAT:- Pre-installation of entire GMS Suite amounts to imposing of unfair condition on OEMs which is an abuse of dominant position by the Appellants resulting in breach of Section 4(2)(a)(i) and 4(2)(d) - The Commission while returning its finding on breach of Section 4(2)(a)(i) and 4(2)(d) has considered the evidence on record and has returned findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tying of YouTube with Play Store has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - HELD THAT:- Appellant has leveraged its dominant position in Play Store to protect its dominant position in Online General Search in breach of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive - Appellant has abused its dominant position by tying up of Google Chrome App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive - Appellant has abused its dominant position by tying up of YouTube App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and information submitted by Google - in a conservation approach, the CCI has taken the lower of these two figures as turnover for the FY 2020-221 and imposed a penalty @ 10% of its average of relevant turnover for the last three FYs 2018-19, 2019-20 and 2020-2021. We uphold the amount of penalty imposed by CCI on Google. Regarding the issue of imposition of provisional penalty consider the argument of the Learned Senior Counsel of the Appellant that there is no provision in the Competition Act for imposing a provisional penalty, with the possibility of revising it on receipt of further information data. We are of the view that the section 27(b) of the Competition Act, 2002 provides for imposition of penalty, which shall not be more than 10% of the average turnover for the last three preceding years upon enterprises, which are parties to such agreements or abuse. Once the CCI has derived the best estimate of the relevant turnover for the last three preceding financial years, and imposed a penalty of 10% of the average of such turnover, we are of the opinion that further revision of this penalty on the basis of financial information or data that may come to light in fut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mr. Prateek Yadav, Mr. Prateek Gupta, Mr. Shivek Endlaw, Ms. Shally Bhasin, Mr. Darpan, Mr. Rohan Bhargava, Mr. Harshil Wason, Mr. Yashraj Samant, Ms. Chandini Anand, Advocates in I.A. No. 232 of 2023 JUDGMENT ASHOK BHUSHAN, J. This Appeal by two Appellants - Google LLC and Google India Pvt. Ltd. (hereinafter referred to as Google ) has been filed challenging the order dated 20.10.2022 passed by the Competition Commission of India in Case No.39 of 2018, Mr. Umar Javeed and Others vs. Google LLC Anr. The Competition Commission of India by the impugned order found Google to have abused its dominant position in contravention of the provisions of Section 4(2)(a)(i), Section 4(2)(b)(ii), Section 4(2)(c), Section 4(2)(d) and Section 4(2)(e) of the Competition Act, 2002 (hereinafter referred to as Act, 2002 ). In terms of the provision of Section 27 of the Act, 2002, Commission has directed Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act and directed certain measures to be taken by Google and further in exercise of power under Section 27 Sub-clause (b), Competiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Licensable Smart Mobile OS; (ii) App Stores for Android Mobile OS; (iii) Online Video Hosting Platform ( OVHP ); and (iv) Online General Web Search Service. India was stated to be relevant geographical market in the application. Informants alleged that Google is engaged in different kinds of anti-competitive practices. Allegations alleging violation of Section 4 r/w Section 32 of the Act, 2002 were made to in the information. iv. The Competition Commission of India taking into consideration the information submitted by Respondent Nos. 2 to 4 registered Case No.39 of 2018. The Commission held preliminary conference on 08.01.2019, in terms of the provisions contained in Regulation 17 of the Competition Commission of India (General) Regulations, 2009. The Commission after perusing the materials on record passed an order dated 16.04.2019 under Section 26(1) of the Act, 2002 directing the Director General (DG) to conduct investigation under provisions of Section 26(1). In the order dated 16.04.2019, the Commission has noted the allegations of the Informants in Para 9 of the order, which is to the following effect: 9. Adverting to the abusive conduct, the Informants have allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who install Android OS and Google apps services in their handsets for Indian market. Third parties who are active in the Indian market relating to app stores for Android OS, online general web search service and web browser were also approached by the Director General for seeking information and data clarification. Information was also gathered by the Director General from key app developers in India and key players in the online video hosting platform. ix. Director General after collecting the information and responses from Google submitted its report dated 29.06.2021 to the Commission. The Director General in its report framed following issues for the purpose of investigation as captured in Para 3.2 of the Report: Issue 1: Whether mandatory pre-installation of entire GMS suite under MADA amounts to imposition of unfair condition on the device manufacturers and thereby infract provisions of Section 4(2)(a)(i) and Section 4(2)(d) of the Act? Issue 2: Whether, Google by making pre-installation of Google's proprietary apps (particularly Google Play Store) conditional upon signing of AFA/ ACC for all android devices manufactured/ distributed/ marketed by device man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 4(2)(d) and Section 4(2)(e) of the Act. xii. The Report of the Director General dated 29.06.2021 was considered by the Commission on 06.10.2021. On 06.10.2021, the Commission directed for forwarding an electronic copy of the non-confidential version of the investigation report to the parties i.e. the Informant and Google, for filing their respective objections/ suggestions. An electronic copy of the confidential version of the investigation report was also forwarded to Google through its authorised representative. Parties were asked to file their objections/suggestions by 05.11.2021. Commission further directed the Opposite Parties to furnish their audited balance sheets and profit loss accounts/turnover for financial years 2018-19, 2019-20 and 2020-21 by 05.11.2021. Parties were directed to appear for final hearing on 24.11.2021. xiii. Certain issues were raised by Google regarding confidentiality. Confidentiality claim was raised by Google with regard to orders issued by the Director General. Google also initiated certain proceeding with that regard which needs no detailed. xiv. On 17.11.2021, the Commission directed Google to file its financial information by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... droid OS to protect its position in online general search in contravention of Section 4(2)(e) of the Act. 614.4. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in non-OS specific web browser market through Google Chrome App and thereby contravened the provisions of Section 4(2)(e) of the Act. 614.5. Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in OVHPs market through YouTube and thereby contravened provisions of Section 4(2)(e) of the Act. 614.6. Google, by making pre-installation of Google s proprietary apps(particularly Google Play Store) conditional upon signing of AFA/ ACC for all android devices manufactured/ distributed/ marketed by device manufacturers, has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android i.e., Android forks and thereby limited technical or scientific development to the prejudice of the consumers, in violation of the provisions of Section 4(2)(b)(ii) of the Act. xix. The Commission has also delineated five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as presently being done under AFA/ ACC. For devices that do not have Google s proprietary applications pre-installed, OEMs should be permitted to manufacture/ develop Android forks based smart devices for themselves. 617.6. Google shall not incentivise or otherwise obligate OEMs for not selling smart devices based on Android forks. 617.7. Google shall not restrict un-installing of its pre-installed apps by the users. 617.8. Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points. Users should have the flexibility to easily set as well as easily change the default settings in their devices, in minimum steps possible. 617.9. Google shall allow the developers of app stores to distribute their app stores through Play Store. 617.10. Google shall not restrict the ability of app developers, in any manner, to distribute their apps through side-loading. xxii. The Commission also imposed penalty on Google. A penalty of Rs.1337.76 Crore was imposed for violation of Section 4 of the Act. Google was directed to deposit the penalty within 60 days of the receipt of the order. In para 639, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion. MADA is not imposed on OEM. The concept of imposition contains a compulsion, there is no compulsion on OEM to enter into any MADA Agreement with Google. The MADA is an optional and per device Agreement. The MADA is voluntary and once signed, OEMs can choose whether to preinstall the GMS suite on any given device. The terms of the MADA are not imposed on device manufacturers. The Commission s finding that pre-installation of the entire GMS suite, prominent placement of Apps and inability to uninstall are unfair conditions under the MADA are incorrect. The MADA clearly states that manufacturers can preinstall these Apps on their compatible Android Phones for free. Google license these Apps non-exclusively. Google does not prohibit manufacturers from preinstalling other non-Google Apps, including Apps that compete with Google s Apps. In reality, several OEMs have installed competing Apps in their devices. OEMs themselves want to sign the MADA, because they wanted to access useful Apps. OEMs, who did not want Google s Apps, choose not to sign the MADA. Under MADA, OEMs can have several non-Google Apps on the devices. Google s preinstallation and placement requirements do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible dilemma in terms of allowing installation of competing Apps with apprehension of causing duplication of Apps and filling up precious ROM space (in addition of Google s), several OEMs have given a response that they do not have any dilemma. The Commission also erred in holding that GMS Apps are must have Apps. The expression must have has been coined by the Commission without there being any basis or material. The Commission has found that Play store is a must have app because it is significant from the point of view of a common mobile user, who considers this as a must have app. Google does not use expression must have in MADA Agreement. Commission has not given any logical definition of must have . No user survey was conducted by the Commission. There is no evidence on record that OEM wanted to install only few Apps, whereas, evidence is that OEMs wanted to install all 11 Apps due to their quality and usefulness. The bundling of Apps by Commission has been held to be unfair. Giving of suite of 11 Apps is with the object that user has fruitful device and ecosystem of Google becomes a success. OEM in their evidence stated that they want all the Apps of Google which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n write an app, once and it would run on every device within the ecosystem. An Android Fork is a device, which uses the Android OS, but does not meet the compatibility requirements as laid down in CDD (Compatibility Definition Document). The compatibility requirement under the CDD is minimal and narrow. The AFA/ACC signatories are free to differentiate and innovate on top of these minimal baseline requirements and have in fact done so. The innovation has been done by Samsung and Oppo releasing devices which has foldable screen and pop-up cameras. There is no embargo whatsoever on innovation and customisation by OEMs. There are certain permitted exceptions within the AFA that allow OEMs to manufacture devices that are not Android Compatible Devices. The evidences which were brought before the Director General have not been correctly appreciated by Commission with regard to Fork. The Commission in its judgment has observed The expansive coverage of the anti-fragmentation obligations includes not only smart mobile devices but a wide gamut of other smart devices. By virtue of these obligations, Google inhibited the development of alternative Android based OSs for smart TVs, smart wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of proprietary Apps and conditional upon signing of AFA/ACC for all Android devices, has reduced the incentive of device manufacturers to develop and sell devices operating on alternative versions of Android, i.e., Android Forks. Google has legitimate interest in licensing its Apps only for those devices which meet the minimum requirement set by it, which is also an observation made by the Commission. The Commission has in its order observed that the technical and scientific development has been limited by Google. The Commission has relied on the evidence of the Amazon whereas Amazon has said that it does not want any Google Apps. There is no evidence that OEMs are precluded from manufacturing Forks. One of the OEMs said before the DG that they are blocked and precluded from evolving Android Forks. The DG did not conduct inquiry in the above regard. Under AOSP Google is giving free license, which can be utilized by any OEM for development of Android Fork. The Commission s findings that Google has violated Section 4(2)(b) are unsustainable. Shri Katphpalia reiterates his submission, which we have noted with regard to effect of AFA/ ACC. 9. The evidence which has come before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Google Search position in the online search market. He submits that MADA does not restrict OEMs from preinstalling competing search services on their devices. The Commission s conclusion that competing search services are foreclosed due to MADA and preinstallation of Google search is incorrect. Both OEMs and users had submitted that they prefer Google search over other search engines due to its superior quality. The Commission s observation that Google had significant market share, which it secured through preinstallation of Google Search, giving it an unassailable position in the general web search market, cannot be accepted. Google Search had a market share of 97.82% across devices in 2011 and 97.69% across devices in 2019. Google Search market share has been consistently high regardless of the device on which search query is generated and irrespective of whether it has been preinstalled or set as default. The success of search cannot be attributed to its preinstallation under the MADA. The Commission is also not correct in observing that due to Google s dominance in Play Store and Google Search, Google has continued its dominance in Google Search, resulting in anti-competitive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that the obligation imposed on OEM, AFA/ACC is to make the device compatible. There is no restriction on the OEM to develop Android Forks for themselves. There is no basis for issuing direction under 617.7 regarding restriction on un-installing of its pre-installed Apps as the same can be disabled by the user and on doing so, it will disappear from the screen. Directions issued in paragraph 617.8 was also unnecessary. Several other remedies allowed by the Commission in paragraph 617 are not covered by any finding. With regard to direction under paragraph 617.1, it is submitted that Google has been following a free licensing module, which make the Android devices extremely affordable so that OEMs are able to access highly desirable and functional Apps free of cost. By requiring Google to modify the royalty-free mode, and instead to charge separately for these Apps and services will increase manufacturers cost and in turn likely to result in higher prices for Indian consumers. Shri Kathpalia submit that remedies allowed by the Commission are far in excess of the infringement findings and deserve to be set-aside. 15. Shri Maninder Singh, learned Senior Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due consideration of all the evidence on record, including various statements made by OEMs in support of Google s business model. The DG failed to consider such evidence, which was supportive of Google business. The Commission in the impugned order, has also not independently and objectively considered the evidence on record. The DG in the present case has mechanically relied upon the proceedings before the European Commission, which is demonstrated from the fact that even the submissions/ contentions of various parties before the European Commission have been replicated by the DG, verbatim as his findings. The learned Senior Counsel submits that there are over 50 instances when DG has merely replicated the contents of the proceedings before the European Commission. The Commission erroneously ignored the DG s failure to conduct an empirical analysis in its order under Section 26 of the Competition Act. The DG failed to conduct any empirical analysis and the Commission also disregarded the empirical studies and survey submitted by Google without any reason. 16. It is submitted by Shri Maninder Singh, learned Senior Counsel that the Commission has failed to compute relevant turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shri Maninder Singh, learned Senior Counsel submitted that impugned order has been passed in absence of a Judicial Member, which is a mandatory requirement under the law, where adjudicatory functions are being carried out. It is submitted that Hon ble Supreme Court has emphasised the requirement of a Judicial Member in the Commission, which discharges judicial/ quasi-judicial functions. 18. Shri N. Vankataraman, learned Additional Solicitor General of India, assisted by Shri Samar Bansal has advanced arguments on behalf of Competition Commission of India. Replying to the submission of learned Counsel for the Appellant that effect analysis is required to be done for proving breach of Section 4, the learned ASG submits that the test of Appreciable Adverse Effect on Competition (AAEC) is not attracted in Section 4. The AAEC test is prescribed specifically for Sections 3 and 6 and not for Section 4. When statute has clearly prescribed distinct tests for Sections 3 and 6, any re-reading of the provision to substitute or add a test is impermissible. As a principle of law, effect analysis is not contemplated in Section 4. The Appellant s arguments that Competition Commission should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved by Google. The learned ASG has referred to various clauses of the MADA to support his submission. The clauses in MADA provides that OEM Companies need no obligation to install Google Application on any of its Android device is an empty concession that has no bearing on the abusive conduct of Google. The MADA clauses make Google s 11 bundled core Applications as must have Apps by every OEM using Google Android OS. The above clauses operate as behavioural bias in the form of status quo bias. The clauses in MADA provide no exclusivity is a misnomer. 19. Coming to the Revenue Sharing Agreement (RSA) Shri Venkataraman submits that all Agreements, i.e., MADA, AFA/ACC and RSA have to be read together to find out cumulative effect of the Agreements on an OEM. Shri Venkataraman submits that argument of Appellant that all the above Agreements are different Agreements and have to be read differently cannot be accepted. It is submitted that they are part of the same transaction and have to be conjointly read. Every OEM, which is RSA signatory is required to first sign MADA, but for an OEM to sign MADA, it must also sign the AFA/ACC. The above clearly indicates interdependence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Clause 2.4.3 of RSA read with Exhibit D grants certain exemptions to certain jurisdictions like the European Economic Area, Russia, Turkey and Korea from the rigours of exclusivity, which is otherwise imposed on the rest of countries where the Agreement extends. 21. Shri Venkataraman elaborating on ACC submits that by Clauses in the ACC, Google prohibits OEMs, who sign ACC to produce Android Forks on any and all of its devices based on Android. The ACC also requires that any Android-based software developed OEM s hardware should be compatible. The Clauses of ACC makes the Apache open license effectively defunct and inoperable since there are virtually no OEMs to manufacture Android forks under their own brand name. The ACC is not an option but an Agreement, which the OEMs are forced to sign by Google. There is no scope for the OEMs to negotiate the terms of the AFA as they are forced to sign a standard Agreement. Once an OEM signs the AFA, the OEM is prohibited from developing, manufacturing and selling Android Fork devices and software. OEMs thus are trapped by Google to only produce devices that will run Google s Apps. Google, therefore, has abused its dominant position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y limited technical or scientific development to the prejudice of the consumers, in contravention of Section 4(2)(b)(ii). 23. Shri Venkataraman further submits that a special responsibility is cast by the statute on a dominant player. The competition law is a law enacted in public interest to protect the consumers and other stakeholders. The dominant player has onerous duties and anything anti-competitive is bad. The learned ASG submits that Google is not only dominant, but super dominant and a dominant player is supposed to do self-policing and failure to discharge special responsibilities leads to abuse. As soon as an entity becomes dominant, its freedom gets circumscribed with the heightened responsibility and it should be aware of its effect and its action. The Preamble as well as Section 18, cast an obligation on the Commission to prevent practices, which are anti-competitive. The argument of Google that under Section 4(2)(c) total denial/ total access has to be proved, is incorrect. The legislative threshold is limited. The denial of market access is sufficient to attract Section 4(2)(c). The learned ASG, replying to the submission made on behalf of the Appellant regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been taken into consideration by the Commission while imposing fine. It is submitted that relevant turnover as laid down by the Hon ble Supreme Court has been noticed by the Commission. Thereafter, the Commission proceeded to analyse relevant turnover in the light of the principles laid down. The Commission rightly rejected Google s argument that only the revenue generated from the usage of Googles Search or YouTube through access points should be considered for relevant turnover for calculation penalty. The Commission has directed Google to submit financial data duly certified by Chartered Accountant, whereas no data certified by the Chartered Accountant was submitted by Google. Google submitted financial information and document with certificate of its own Officers. The financial information submitted on 11.10.2022 was subject to multiple caveats and disclaimers. The order dated 19.09.2022 was passed by the Commission to resubmit data after addressing the various shortcomings in the first submission. The Commission gave more than one opportunity to Google, but if failed to give clear financial data with regard to its relevant turnover duly supported by Chartered Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in downloading the Apps. The only reason to do this is to cement the dominance of Google. 29. Shri Abir Roy, learned Counsel appearing for the Applicant in I.A. No.327 and 336 of 2023 on behalf of C.E. Info Systems Ltd. and Alliance of Digital India Foundation respectively, submits that the Applicant has appeared before the DG. It is submitted that Applicant had developed it App Store in 12 Indian languages. The Applicant is an Indian App developer. 30. Shri Rajshekhar Rao, learned Senior Advocate has appeared for OSlabs Technology (India) Pvt. Ltd., IA No.232 of 2023. It is submitted that the applicant is an Indian homebred, system apps Company, galvanised by the mission of Hon ble Prime Minister of Digital India . The Applicant has built India s only indigenous mobile app store for Indian users to discover mobile applications, in the regional Indian languages of their choice. Referring to Section 4, Shri Rao, learned Senior Counsel for another Intervenor submits that Section 4 contains a theme that the bigger you are, the greater is the responsibility. Referring to Section 19 sub-section (4), Rao submits that each aspect has been evaluated by the Competition Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? 5. Whether the Appellant has perpetuated its dominant position in the Online Search Market resulting in denial of market access for competing Search Apps in breach of Section 4(2)(c) of the Act? 5a. Whether the Commission while returning its finding on breach of Section 4(2)(c) has not considered the evidence on record and has not returned any finding regarding the Appellant s conduct being anti-competitive? 6. Whether Appellant has leveraged its dominant position in Play Store to protect its dominant position in Online General Search in breach of Section 4(2)(e) of the Act? 6a. Whether the Commission while returning its finding on breach of Section 4(2)(e) in reference of above has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? 7. Whether Appellant has abused its dominant position by tying up of Google Chrome App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act? 7a. Whether the Commission while returning its finding on breach of Section 4(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to eliminate all practices which have an adverse effect on competition. The Commission should promote and sustain competition and also protect the interest of the consumers. Issue No.1 36. We may first notice statutory scheme under the Competition Act, 2022. The Competition Bill 2001 was introduced in the Lok Sabha. The Competition Bill sought to ensure fair competition in India by prohibiting trade practices, which cause Appreciable Adverse Effect on Competition ( AAEC ) in India. The Statement of Objects and Reasons reads: Statement of Objects and Reasons. In the pursuit of globalisation, India has responded by opening up its economy, removing controls and resorting to liberalisation. The natural corollary of this is that the Indian market should be geared to face competition from within the country and outside. The Monopolies and Restrictive Trade Practices Act, 1969 has become obsolete in certain respects in the light of international economic developments relating more particularly to competition laws and there is a need to shift our focus from curbing monopolies to promoting competition. 2. The Central Government constituted a High Level Committee on Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermines purchase or sale prices; (b) limits or controls production, supply, markets, technical development, investment or provision of services; (c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; (d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation - For the purposes of this sub-section, bid rigging means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding (4) Any agreement amongst ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export. 4. Abuse of dominant position. (1) No enterprise or group shall abuse its dominant position. (2) There shall be an abuse of dominant position 4 [under sub-section (1), if an enterprise or a group] (a) directly or indirectly, imposes unfair or discriminatory- (i) condition in purchase or sale of goods or service; or (ii) price in purchase or sale (including predatory price) of goods or service. Explanation. For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory condition or price which may be adopted to meet the competition; or (b) limits or restricts- (i) production of goods or provision of services or market therefor; or (ii) technical or scientific development relating to goods or services to the prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 3 or sub-section (1) of section 4 either on its own motion or on (a) receipt of any information, in such manner and accompanied by such fee as may be determined by regulations, from any person, consumer or their association or trade association; or (b) a reference made to it by the Central Government or a State Government or a statutory authority. (3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section 3, have due regard to all or any of the following factors, namely: - (a) creation of barriers to new entrants in the market; (b) driving existing competitors out of the market; (c) foreclosure of competition by hindering entry into the market; (d) accrual of benefits to consumers; (e) improvements in production or distribution of goods or provision of services; (f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services. (4) The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under section 4, have due regard to all or any of the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India is a statutory requirement. There is no such provision made in Section 4 of the Act. It is submitted that Section 4, sub-section (1) is echoed in an injunctive term, providing that no enterprise or group shall abuse its dominant position and sub-section (2) of Section 4 provides that there shall be an abuse of dominant position under sub-section (1), if an enterprise or a group s conduct is found to contravene as enumerated in sub-clauses (a), (b), (c), (d) and (e). It is submitted that requirement of law is the conduct, which is covered by sub-section (2) of Section 4, per se, lead to violation of Section 4, sub-section (2) and no effect analysis is required to be undertaken. The learned ASG submits that even if in some cases Commission has conducted effect analysis that was not the requirement of law and this Tribunal may hold that no effect analysis is required under Section 4 of the Act. 43. The Preamble of the Act as noted above contains the statement that Competition Act has been enacted for the establishment of the Commission to prevent practices having an adverse effect on competition. It is well established rule of statutory interpretation that preamble does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mere existence of such conduct may fulfil the criterion embedded under Section 4(2)(a)(i) of the Act. Thus, the existence of an unfair condition may amount to a contravention of the provisions of Section 4(2)(a)(i) of the Act. However, examination of exploitative conduct which involves imposition of an unfair condition by a dominant enterprise in a B2B transaction is essentially to undertake a fairness or reasonability test, which requires examining both how the condition affects the trading partners of the dominant enterprise as well as whether there is any legitimate and objective necessity for the enterprise to impose such condition. Appreciation of the context and rationale becomes all the more important in the cases of buyer power, lest it increase the risk of large industrial buyers being penalised for what may be an attempt to negotiate competitive terms with suppliers or simply a prudent business decision having pro-competitive effects in the market for the final product in terms of lower prices, larger availability, greater choice etc. Keeping this framework for determination of unfairness in view, the conduct of ONGC is analysed hereunder. 46. The next case relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In paragraph 55, following has been observed: 55. These facts should have been enough to hold that there was no effect on the downstream market and ultimate consumer did not suffer on the account of the prices of Schott Kaisha and others being similar or the same. Though different or more discount was made to Schott Kaisha by the Appellant, it did not ultimately effect the downstream market at all and in this behalf the principles involved in Article 82 of EU Treaty as also the provisions of the US Robinson Patman Act should have been adhered to. 48. The Competition Commission of India s judgment in Harshita Chawla and Ors. vs. WhatsApp 2020 SCC OnLine CCI 32 has also been relied upon where the Competition Commission of India while examining provisions of Section 4(2)(a)(i) and 4(2)(a)(d) has held that one of the conditions is that tying is capable of restricting/ foreclosing competition in the market. It has been held in paragraphs 91, 92 and 93 as follows: 91. As regards Section 4(2)(a)(i), the Commission does not find much merit in the allegation of the Informant as mere existence of an App on the smartphone does not necessarily convert into transaction/usage. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricting/foreclosing competition in the market. 49. Another judgment relied upon is of Competition Commission of India in Case No.33 of 2014 in XYZ vs. REC Power Distribution Company Ltd. wherein dealing with Section 4, sub-section (2)(c), the following has been held in paragraphs 6.37 and 6.40:- 6.37 As per Section 4(2)(c) of the Act, there shall be an abuse of dominant position under sub-section (1), if an enterprise or a group indulges in practice or practices resulting in denial of market access in any manner. Any conduct under Section 4(2) (c) of the Act requires an establishment of two components--firstly, there should an indulgence in a practice (s) i.e. there should be a conduct; and secondly, that the conduct should have resulted in a denial of market access i.e. anti-competitive effect/distortion in the market in which denial has taken place. 6.40 The second element in the enquiry of a case under denial of market access is with regard to the anti-competitive effect/distortion in the market because of such conduct. The Commission notes that the DG has primarily relied upon the award of DPRs on nomination basis to RECPDCL. During 2013-14, RECPDCL was awarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetitors or consumers or the market. The Commission, in its order has amply established the aforementioned two questions. Section 4 of the Act, unlike section 3 does not require evaluation of appreciable adverse effect on competition (AAEC) or evaluation of the factors mentioned in section 19(3), which include accrual of benefits to consumers . 51. It is submitted that the said judgment has also been affirmed by COMPAT vide its judgment in National Stock Exchange of India vs. Competition Commission of India - 2014 SCC OnLine Comp AT 37. It is true that above judgment of the Commission was affirmed by the COMPAT, but what was said in paragraph 25.1 has not been either specifically affirmed or departed. 52. The learned ASG relied on a judgment of Court (Fifth Chamber) in Servizio Elettrico Nazionale relied on paragraphs 53, 54 and 123, which are to the following effect: 53. That being said, it must be borne in mind that the characterisation of a practice of a dominant undertaking as abusive does not mean that it is necessary to show that the result of a practice of such an undertaking, intended to drive its competitors from the market concerned, has been achieved and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit, the existence of abuse by one unit is sufficient to arrive at the finding that the parent company is also liable for that abuse. In the above judgment itself in order passed in paragraph 124 clearly mentioned that the evidence adduced by the undertaking in question shows that the conduct has not produced actual restrictive effects. Paragraph 124 1, 2 and 3 are as follows: 124. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Fifth Chamber) hereby rules: 1. Article 102 TFEU must be interpreted as meaning that, in order to establish whether a practice constitutes abuse of a dominant position, it is sufficient for a competition authority to prove that that practice is capable of impairing an effective competition structure on the relevant market, unless the dominant undertaking concerned shows that the exclusionary effects that could result from the practice at issue are counterbalanced or even o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors or the relevant market in its favour. 56. It has been held in the above judgment that abuse of dominant position by an enterprise is something that would affect its competitors or the relevant market in its favour. 57. We may, in this connection, also refer to the Report of Competition Law Review Committee (July 2019), a Committee set up to review the Competition Act. The Committee has in its Report dealt separately under heading in paragraph 4 Rule of Reason in Finding of Abuse . The Committee in paragraph 4 has noted the decisional practice of the Commission, where Commission in some cases followed per se approach, while in several other cases, entered into effects-based analysis. The Report also notices the decisional practice of EU Courts and noticed the effects-based analysis adopted in different Forums. In paragraphs 4.1 to 4.10, the Committee captured the issue in following words: 4. RULE OF REASON IN FINDING OF ABUSE 4.1. A list of actions which amount to abuse of dominance have been provided in Section 4(2) of the Act. The text of Section 4(2) does not refer to the effect of actions committed by dominant enterprises or groups and seems to imply tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no effect on the downstream market and the ultimate consumer did not suffer as a result of the alleged conduct. In this case, not only was an effects based analysis undertaken but the objective justifications raised by the parties to justify their conduct were also considered. 4.5 It was also brought to the Committee s attention that, based on a plain reading of the statute, appellate authorities have interpreted the clauses in Section 4(2) broadly in certain cases. For instance, in a recent judgment, the Supreme Court held that Section 4(2)(c) is worded broadly enough to account for restraining entry of enterprises from the market even when they re not competitors.311 However, the Committee noted that though the scope of abuse in Section 4(2)(c) was interpreted to be wide in this case, the Supreme Court also held that a penalty need not be imposed as the accused party had provided legitimate justifications. 4.6. After analysing the decisional practice on abuse of dominance in India, the Committee concluded that the CCI does in fact adopt an effects-based approach in many cases depending on the kind of abuse in question. It was noted that this approach is in line wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Singapore competition authority, i.e., CCCS has noted as below: In conducting an assessment of an alleged abuse of dominance, CCCS will undertake an economic effects-based assessment in order to determine whether the conduct has, or is likely to have, an adverse effect on the process of competition. The process of competition may be adversely impacted, for instance, by conduct which would be likely to foreclose, or has foreclosed, competitors in the market. CCCS considers that factors which would generally be relevant to its assessment include: the position of the allegedly dominant party and its competitors; the structure of, and actual competitive conditions on, the relevant market; and the position of customers and/or input suppliers. (emphasis supplied) 4.10. Even in the US, having a monopoly is not per se unlawful and is always judged under the rule of reason. For establishing an allegation of monopolizing or attempting to monopolize, competition authorities are usually required to analyse if the defendant s conduct has or is likely to harm competition and consumers. Other jurisdictions like Australia, Brazil and Canada have also adopted the rule of reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which , by their nature or according to commercial usage, have no connection with the subject of such contracts. 60. In earlier cases, the EU Court applied per se rule, but there has been shift in the opinion of the EU Courts, which has been captured by Richard Whish David Bailey in Tenth Edition of Competition Law under Section 5 dealing with Article 102. While dealing with general principles of abuse, following has been stated under the heading (ii) Legal formalism: are there any per se rules under Article 102? in following words: (ii) Legal formalism: are there any per se rules under Article 102? One of the most common complaints about Article 102 has been that the Commission and the EU Courts has been that the Commission and the EU Courts apply it in too formalistic a manner. In particular, some practices appear to have been regarded as unlawful per se , that is to say, irresp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive would not submit such evidence. It follows that the Court s qualification would seem, de facto, to mean that exclusionary conduct can be abusive only where it can be shown to be capable of having anti-competitive effects on as-efficient competitors. To put the point another way, there is no per se illegality under Article 102. The Court of Justice has recently re-affirmed the position: in Paroxetine it stressed that, having regard to all relevant facts, conduct may be characterised as abusive only if it is capable of restricting competition and, in particular, producing exclusionary effects. 61. Under heading (iv) What type of effects analysis should be undertaken to find an exclusionary abuse?, following has been stated: iv) What type of effects analysis should be undertaken to find an exclusionary abuse? Where it is not possible to say that the object of a dominant firm's conduct is to harm competition, the jurisprudence of the Court of Justice is clear that conduct should be condemned as abusively exclusionary under Article 102 only where it is demonstrated to have the actual or likely effect of restricting or distorting competition. For example, in Teli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with the subject of such contracts; or (e) uses its dominant position in one relevant market to enter into, or protect, other relevant market. Explanation - For the purposes of this section, the expression (a) dominant position means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour. (b) predatory price means the sale of goods or provision of services, at a. price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. (c) group shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5. 64. The explanation clearly provides that unfair or discriminatory condition in purchase of sale of goods or service shall not include such discriminatory condition or price which may be adopted to meet the competition . 65. The Section 4, thus, specifically excludes discri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding was initiated after forming the aforesaid prima facie opinion directing the Director General to cause an investigation under the provisions of Section 26(1). 68. The Director General issued notice to OEMs and other third parties and after collecting evidence submitted the report on basis of which order has been passed. The order of the Commission is a detailed order which notices submissions made by the Appellant, the report of the Director General, and the other materials on record and it cannot be said to be an order relying on the decision of the European Commission dated 18.07.2018. There are findings and conclusions recorded by the Commission after considering the data and evidence collected in the inquiry. The geographical market in the investigation was India and we find no ground to accept the submission of the Appellant that order of the Commission is replete with confirmation bias. Relevant markets were determined by the DG and determination of markets has been noted in the Para 57 of the order of the Commission, which is to the following effect: 57. Based on its assessment in the backdrop of the abovementioned statutory scheme, the DG in its Investigation Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms and conditions of this Agreement (including compliance with Section 2.3) and the GMS Requirements, and subject to Company being in compliance with a valid and effective Android Compatibility Commitment, Google grants to Company a non-transferable, nonexclusive, no cost license during the Term (under Google's Intellectual Property Rights) to (a) distribute the Google Applications on Devices in the Territories, and (b) reproduce the Google Applications to the extent necessary to exercise the license granted in this Section 2.1. I Company may only distribute a Device with Google Applications if it makes all Core Applications authorized for distribution in the applicable Territory available on such Device, unless otherwise approved by Google in writing. For the avoidance of doubt, Google may license such Google Applications under Intellectual Property Rights that Google owns or has the right to license without payment to or consent from a third party. 73. Clause 2.3(b) provides that company may not, and may not allow or encourage any Affiliate or third party to create derivative works from or based on Google Applications. 74. Sub-clause 2.3(i) restricts the third part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt i.e. Android Compatibility Commitment (ACC) (Earlier in Form of AFA- Android Fragmentation Agreement). Copy of sample ACC with Micromax Informatics Ltd. has been brought on record by the Appellant in the Convenience Compilation. Clause 1.2 Android Compatible Device(s) means, for each applicable version of Android, devices that comply with the Android Compatibility Definition Document (CDD). Clause 2.2 provides for Permitted Exceptions . Clause 2.1 Android Compatibility provides: 2.1 Android Compatibility. A. Android Compatible Hardware. All devices based on Android that Company manufactures, distributes, or markets will be Android Compatible Devices. B. Android Compatible Software. All Android-based software that Company develops, distributes, or markets will be designed to run on Android Compatible Devices. C. Android-based SDKs. Company may not distribute or market an SDK based on Android to third parties or participate in the development of such an SDK. Company remains free to develop an SDK based on Android for its own internal use. 78. The Commission in its order has after noticing the evidence which was collected by the Director General fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id devices are not permitted to include any Google apps (the distribution of which is conditioned on other contracts such as MADA and AFA). For some Google apps, the device manufacturer may substitute an alternative, perhaps Mapmylndia Maps instead of Google Maps. But for other Google apps which are considered must have such as Play Store, the alternative is less clear. Without Google Play, from bare Android devices, users cannot easily obtain the apps both of Google and of independent app developers which they typically expect to obtain. 79. After analyzing the materials on record and arguments advanced by the Appellant, the Commission held that Google does not negotiate the key terms of the MADA which is anti-competitive conduct by foreclosing the market for rivals and MADA has also reduced potential choice for the users. In Para 373 of the judgment commission has held: 373. Based on the foregoing analysis, the Commission is of the view that various covenants of MADA are in the nature of imposition of unfair conditions on OEMs who have no choice but to accept the same. As already stated, Google does not negotiate on key terms of the MADA which are found to be resulting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets. The Regulator which is statutorily obliged to discharge its statutory function cannot confine its analysis and decision only on the basis of evidence of countervailing parties and competitors. Any conduct or arrangement concerning the interests of consumers and OEMs is clearly amenable to examination by the Commission to protect the interest of consumers and preserve competition in the market. 83. Learned ASG, in support of his submission relied on the judgment of Hon ble Supreme Court in L.I.C. of India Anr. vs Consumer Education Research Centre, (1995) 5 SCC 482 . In Para 23 to 27 following was laid down : 23. Every action of the public authority or the person acting in public interest or any act that gives rise to public element, should be guided by public interest. It is the exercise of the public power or action hedged with public element (sic that) becomes open to challenge. If it is shown that the exercise of the power is arbitrary, unjust and un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. 24. In Dwarkadas Marfatia Sons v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293 : (1989) 2 SCR 751] it was held that the Corporation must act in accordance with certain constitutional conscience and whether they have so acted must be discernible from the conduct of such Corporations. Every activity of public authority must be informed by reasons and guided by the public interest. All exercises of discretion or power by public authority must be judged by that standard. In that case when the building owned by the port trust was exempted from the Rent Act, on terminating the tenancy for development when possession was sought to be taken, it was challenged under Article 226 that the action of the port tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction between public law remedy and private law field cannot be demarcated with precision. Each case will be examined on its facts and circumstances to find out the nature of the activity, scope and nature of the controversy. The distinction between public law and private law remedy has now become too thin and practicably obliterated. 27. In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Duty to act fairly is part of fair procedure envisaged under Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest. 84. Learned ASG has also made elaborate submission that OEMs have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titive web browser in the global mobile market without developing for both the iOS and Android OS... ' ...Firefox was initially very successful, achieving close to 30% global market share in 2010 as the second most popular browser after Internet Explorer (See: http://gs.statcounte r.com/browser- market-share/ desktop/ worldwide/Umonthly-200901 -20 LO 12- bar). After that, Mozilla's market share took a downturn, impacted by companies connecting their browsers to their operating systems: on desktop this was Microsoft connecting Windows to Internet Explorer (and later Edge) and on mobile this was Google connecting Chrome to Android mobile devices. This made default placement on devices a challenge. Without business opportunities for default placement of Firefox, the overwhelming majority of Firefox use was through dedicated fans who took several steps to find Firefox on the web or in an app store, install it on their device, change it to be default, and in many cases, re-change system settings that attempted to override their default choice. Mozilla also struggled on mobile without any major distribution opportunities for Firefox on Android in global markets. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative as well as qualitative data on basis of extremely high market share of Android OS. In 2018, its market share was 98.47% whereas iOS was 1.46% and others were only 0.07%, this indicate the effect of abusive conduct. Learned ASG has referred to data collected by the Director General and has been taken note by the Commission in Paras 96, 97, 100 and 101. 89. The facts brought on the record indicate that effect of abuse of dominant position by the Appellant was taken note of which was reflected on extensive data which was on the record. The Commission has also noticed that OEM s lack of bargaining power and lack of negotiating space with Google clearly proves harm to competition and weak countervailing buyer power restricting to bundled apps, pre-installation and premium placement are also anti-competitive. Various conditions in the MADA which include the condition under which Google retains sole discretion to change list/bundle of GMS Apps; condition that OEMs must seek approval of Google for launching devices, all this clearly prove anti-competitive practices. We may only notice para 373 of the order of the Commission, where the Commission has expressly held that the practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226. The Hon ble Supreme Court allowed the Appeal. In para 30 of the judgment following was observed: 30. The test in Central Inland Water Transport Corpn. (supra) is not only to assess whether the parties have unequal bargaining power relative to one another but also to ascertain whether a contractual term or a contract is unfair, unreasonable or unconscionable. A contract (or a term in a contract) can be said to be unfair or unreasonable if it is one- sided or devoid of any commercial logic. In the present case, although theatre owners may unilaterally determine the conditions of entry into cinema hall, the condition imposed in this instance is not unfair, unreasonable or unconscionable. 92. In the facts of the said case, the Hon ble Supreme Court held that conditions imposed by multiplexes were not unfair, unreasonable or unconscionable. Judgment of Hon ble Supreme Court was in the facts and circumstances of that case and cannot be pressed in the present matter. 93. The next case relied by learned counsel for the Appellant is Saurabh Tripathy vs. Competition Commission of India, 2019 SCC OnLine Del 10498 , where in para 46, the Delhi High Court laid down following: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Google Application that is not a Core Application is placed no more than one level below the Default Home Screen. There is also a condition that the OEM shall implement the Home button animation as per Google s guidelines if Google Assistant is enable on the Android device and also implement Google Hotword, if it is supported by the device. Thus, the conditions which are applied on OEMs through MADA which is essentially to provide Google Applications, are in the form of supplementary obligations attracting Section 4(2)(d) of the Act whose contravention is evident. 97. The Commission has noted in para 373 of the impugned order, the unfair conditions imposed by Google on OEMs, holding that the OEMs have no choice but to accept them. Para 373 is as follows: 373. Based on the foregoing analysis, the Commission is of the view that various covenants of MADA are in the nature of imposition of unfair conditions on OEMs who have no choice but to accept the same. As already stated, Google does not negotiate on key terms of the MADA which are found to be resulting in anti competitive conduct viz. pre-installation of entire suit of GMS as well as prominent placement thereof. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Senior Counsel submits that AFA was introduced in the background when Symbian OS, an open source platform, which did not implement any minimum compatibility standard failed. The learned Senior Counsel submits that AFA/ACC does not restrict innovation. The AFA/ACC signatories are free to differentiate and innovate on top of these minimal baseline requirements and some OEMs have actually done so. The learned Senior Counsel has referred to Samsung and Oppo, which had released devices, some of which have foldable screens and pop-up cameras. The intention of the Appellant is that securing minimal compatibility was to avoid the fate of fragmentation. We have noticed certain relevant clauses of ACC in preceding paragraphs of this judgment. Clause 2.1(B) of ACC provides that any Android based software company developed/ distributed or marketed will be designed to run on android compatible devices. Clause 2.3 enumerates certain permitted exceptions. The Commission after analysing the material on record including the evidence given by the OEMs, recorded following findings in paragraph 583: 583. In view of the foregoing analysis, the Commission concurs with the finding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph, also returned a finding that restrictions under AFA/ACC adversely affect the incentives of OEMs, App developers and users to experiment with innovative products using Android Forks. Further in paragraph 558, the Commission has observed: 558. The Commission finds that the restrictions imposed vide various clauses of AFA/ ACC are unreasonable and disproportionate in scope and has resulted in foreclosure of its competitors in OS market. Google, in its submissions also claims that a branding solution would be ineffective and lead to consumer confusion as firms would be allowed to market incompatible devices as based on Android or using Android . Though the Commission does not find this assertion convincing, but in that case too, Google could have suitably amended its branding guidelines to make this distinction more prominent. 103. With regard to complaint of the Appellant that Commission while returning its finding, holding AFA/ACC limiting scientific development, has not considered the evidence on record. We have perused the part of the order passed by the Commission in the above regard. In paragraphs 504 to 583, the Commission has dealt with this issue. In paragraph 56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany may not participate in the creation of, or promote in any way, any third party software development kit (SDK) derived from Android, or derived from Android Compatible Devices. 106. In paragraphs 518, 522 and 523, the Commission has noticed the evidence led by Amazon. After noticing the evidence of Amazon, following has been stated in paragraph 524 by the Commission: 524. Amazon has also pointed out other hindrances in the path of developing a forked version of Android OS owing to terms and condition of AFA/ ACC. Achieving a viable scale would have allowed Amazon and other similarly interested developers to invest in developing an alternative Android OS which would have offered more features and services. Thus, the obligations imposed pursuant to AFA/ ACC, have huge impact on innovation and research and development by competitors. 107. The Commission has in its order, elaborately dealt with evidence led by the OEMs, and, therefore, the complaint of the Appellant that evidence has not been considered in the right perspective, cannot be accepted. We have noticed that not only Amazon but eight other OEMs have made their submissions on various non-negotiable constra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mazon. In paragraph 522 and 523, the relevant extract of the Amazon s reply has been noted, which is to the following effect: 522. As identified in the Investigation Report, the example of Amazon Fire OS (a forked version of Android developed by Amazon) demonstrate that anti - fragmentation obligations severely limit the number of OEMs as well as their ability to market forked Android OS based devices. Amazon, having developed fork version of Android as Fire OS, had to face considerable difficulty in commercial production and distribution of handsets installed with Fire OS. Amazon intended to license its Fire OS to OEMs who would manufacture smart phone devices operating on the Fire OS. However, this could not materialize due to the unwillingness of OEMs who were under AFA obligations. This is evident from the reply of Amazon according to which several leading OEMs cited the risk of losing their access to GMS if they were to work with Amazon, as the Fire OS would be viewed by Google as a fragmentation of Android. The relevant extract from the reply of Amazon, is as follows: However, Amazon s ability to distribute the Fire OS through the OEMs who are subject to Google s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been noticed by the Commission in paragraphs 547 and 548 and the Commission has observed in paragraph 548: 548. Based on the aforesaid replies of most of the OEMs, it is noted that by keeping the contours of the term fragmentation undefined, Google has kept the sole discretion to interpret the same as per its interest at all times. By simply stating that the OEM will not take any actions that may cause or result in the fragmentation of Android, Google left the OEMs guessing as to whether a particular action is within the ambit of the AFA. Google at its whims and fancies could consider any customization of the Android code as fragmentation as it retains the power to unilaterally change the compatibility requirements. Since, Google requires GMS licensees to submit all Android devices to Google for approval, regardless of whether the devices preload GMS or are based on the Android Open-Source Project, the OEMs are left to the dole discretion of Google w.r.t. their devices. This also restricted the ability of the OEMs to test the markets with newer features and devices. 113. We are in agreement with the conclusions recorded by the Commission in paragraph 548. The abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devices manufacturers to develop and sell self-device operating or alternative version of Android and Android Forks and thereby limited technical and scientific development, which is breach of provisions of Section 4(2)(b)(ii) of the Act. (ii) Issue No. 4a: The Commission while returning its finding has considered the evidence on record in respect of Section 4(2)(b)(ii) and has also returned finding on anti-competitive conduct of the Appellant. Issue No. 5 and 5a 116. The Commission has held that Google has perpetuated its dominant position in the online search market in a way so as to result in the denial of market access for competing search apps violating Section 4(2)(c) of the Act. The conclusion of the Commission is recorded in Para 419, which are to the following effect: 419. Based on the interplay between MADA, RSAs, and AFA/ACC, the Commission is of the view that Google used its position as the only supplier of Play Store to protect its market for general search services and it also made it difficult for the competing general search services to access the said market. 117. The Commission has further proceeded to hold that requirement of pre-instal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices, Company must meet the conditions below with respect to such Qualified Device, and such Qualified Device is subject to Google's approval (which it may grant in its sole discretion): 2.1.2.1. compliance with the Search Access Point requirements in accordance with Exhibit C; 2.1.2.2 implementation of the applicable Client ID in accordance with Section 2.3; 2.1.2.3. compliance with Section 2.2; 2.1.2.4. compliance with the promotion restrictions set out in Section 3 and the Google Mobile Branding Guidelines; and 2.1.2.5. Company or its Affiliate being a MADA licensee in good standing. 119. Clause 2.4 contains certain prohibition on the Company. Clause 2.4.1 is as follows: 2.4.1. During the Term, Company will not and will not allow any third party to: 2.4.1.1. Implement, pre-load or otherwise install on a Qualified Device (including without limitation via the out-of-box experience or non-user initiated download) any application, bookmark, product, service, icon, launcher, third-party Hotword or feature that is an Alternative Service or that has the primary purpose of providing access to an Alternative Service, except as specified in subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that impugned order lacks any independent assessment on the RSAs, which was under consideration before the Commission. It is submitted that the Commission erred in observing that if an OEM had pre-installed a competing general search service on any device within an agreed portfolio, it would have had to forego the revenue share payments not only for that particular device but also for all the other devices. It is submitted that Appellant has highlighted the distinction at multiple stages including at the time of hearing. The Appellant has referred to Para 403 of the order of the Commission. It is submitted that the Commission had adopted the Director General s assessment by portfolio-wide RSAs and not on device-based RSA. It is submitted that the Director General replicated the European Commission s findings on RSA whereas before the European Commission the RSAs under consideration were pre-2014 RSAs i.e. only portfolio-wide RSAs, and related findings have no relevance in view of the changed nature of the RSA after 2014. The Commission has also not examined the coverage of Google s portfolio-wide RSAs. Commission s observation that OEMs are unable to preload rival General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad laid down that where several deeds form part of one transaction and are contemporaneously executed they should, for all purposes, be considered as the same deed. In paras 23 to 28 following has been laid down: 26. In CHITTY ON CONTRACTS (supra), it is observed that where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to the case as if they were one deed. Similarly, KIM LEWISON, O.C. IN THE INTERPRETATION OF CONTRACTS (supra) has observed that a document executed contemporaneously with, or shortly after the primary document to be construed may be relied upon as an aid to construction, if it forms part of the same transaction as the primary document. 27. Many transactions take place by the entry into a series of contracts, for example a sale of land involving an exchange of identical contracts, a sale and lease-back of property; an agreement of sale and a bill of sale and so on. In such cases, where the transaction is in truth one transaction all the contracts may be read together for the purpose of determining their legal effect. In Smith v. Chadwick, Jessel M.R. said: . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti-competitive agreements. The Act, which prohibits anti-competitive agreements, has a laudable purpose behind it. It is to ensure that there is a healthy competition in the market, as it brings about various benefits for the public at large as well as economy of the nation. In fact, the ultimate goal of competition policy (or for that matter, even the consumer policies) is to enhance consumer well-being. These policies are directed at ensuring that markets function effectively. Competition policy towards the supply side of the market aims to ensure that consumers have adequate and affordable choices. Another purpose in curbing anti-competitive agreements is to ensure level playing field for all market players that helps markets to be competitive. It sets rules of the game that protect the competition process itself, rather than competitors in the market. In this way, the pursuit of fair and effective competition can contribute to improvements in economic efficiency, economic growth and development of consumer welfare. How these benefits accrue is explained in the ASEAN Regional Guidelines on Competition Policy, in the following manner: 2.2. Main Objectives and Benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountry in which interest of the society and consumers at large is directly involved. This is so eloquently emphasised by this Court in Competition Commission of India v. SAIL [CCI v. SAIL, (2010) 10 SCC 744] in the following manner: (SCC pp. 755-56 794, paras 6, 8-10 125) 6. As far as the objectives of competition laws are concerned, they vary from country to country and even within a country they seem to change and evolve over the time. However, it will be useful to refer to some of the common objectives of competition law. The main objective of competition law is to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer preferences. The advantages of perfect competition are threefold: allocative efficiency, which ensures the effective allocation of resources, productive efficiency, which ensures that costs of production are kept at a minimum and dynamic efficiency, which promotes innovative practices. These factors by and large have been accepted all over the world as the guiding principles for effective implementation of competition law. *** 8. The Bill sought to ensure fair competition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of its Preamble and the Statement of Objects and Reasons, are to eliminate practices having adverse effect on the competition, to promote and sustain competition in the market, to protect the interest of the consumers and ensure freedom of trade carried on by the participants in the market, in view of the economic developments in the country. In other words, the Act requires not only protection of free trade but also protection of consumer interest. The delay in disposal of cases, as well as undue continuation of interim restraint orders, can adversely and prejudicially affect the free economy of the country. Efforts to liberalise the Indian economy to bring it on a par with the best of the economies in this era of globalisation would be jeopardised if time-bound schedule and, in any case, expeditious disposal by the Commission is not adhered to. The scheme of various provisions of the Act which we have already referred to including Sections 26, 29, 30, 31, 53-B(5) and 53-T and Regulations 12, 15, 16, 22, 32, 48 and 31 clearly show the legislative intent to ensure time-bound disposal of such matters. 127. The judgment of Hon ble Supreme Court in S. Chattanatha Kuraya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most important factor for a challenger like Bing to gain in scale. Without those distribution opportunities, relatively few users will take the time to download the Bing app or change the search defaults on the device. For those users who do try Bing, because there is so little usage overall, the quality of Bing s results will suffer. This leads to the situation where even from the users who find and try Bing, a high percentage will switch back to Google. This cycle stemming from a lack of scale will continue until a large number of users can be attracted to the platform in a relatively short period of time, most likely by becoming the default search provider on a major mobile platform. In the absence of this kind of significant change in usage, Bing or other competing search providers are unlikely to be able to meaningfully compete with Google. (Emphasis supplied) 393. Based on the foregoing, the Commission is of the view that the competing general search service providers are not in a position to nullify the competitive edge that Google secured for itself through pre-installation as well as premium placement under MADA. 130. The consideration of the entire iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n breach of Section 4(2)(c) of the Act. (ii) Issue No.5a: The Commission while returning its finding on breach of Section 4(2)(c) has considered the evidence on record and has also recorded finding regarding Appellant s conduct being anti-competitive. Issue Nos. 6, 6a, 7, 7a, 8 and 8a 133. All the above questions relate to abuse of dominant position in the relevant market to enter or protect or to gain in any other relevant market. The criteria for determining abuse can be summed in following manner: (i) A dominant company leverages its dominance in one market to benefit from any secondary market. This leveraging results in foreclosure of competition in the secondary market. (ii) The behaviour of the dominant firm is not objectively justified. 134. Article 102 of the Treaty on the Functioning of the European Union (TFEU) also contains the similar principles of Competition Law. Article 102 of TFEU also makes tie-in agreements as infringement of Article 102. Tying is the practice of a supplier of one product, the tying product, requiring a buyer also to buy a second product, the tied product. The tying may have various forms. 135. Richard Whish and Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and further after entering RSA the OEMs are precluded from pre-installing competing search apps in particular device. 139. The learned Senior Counsel for the Appellant has referred to reply of Xiaomi, where Xiaomi said that it is free to have different search engines for Xiaomi s browser app and on the one screen of Xiaomi s smartphone, which is also a standalone app. 140. Learned ASG has referred to various paras of the order of the Commission highlighting importance of pre-installation as a distribution channel (paras 424-432); inability of the rival web browsers to neutralize the competitive edge secured by Google in the browser market (paras 433-434); Google setting the de-facto web standards due to its dominant position in the browser market (paras 435-441); impossible to uninstall Google Chrome on GMS devices (paras 442-445); and negative impact on competition in the relevant market(s) (para 446-448). 141. The Commission has after analysing the evidence led by parties found tying of Play Store with Google Search violative of Section 4(2)(e). The Commission has also retuned its finding and conclusion regarding typing up of Play Store with YouTube. In para 465, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive. Issue Nos.9 and 10 144. Shri Maninder Singh, learned Senior Counsel for the Appellant has attacked the Report submitted by the Director General. It is contended that the Report violates principle of natural justice and Director General has put leading questions to the third parties, which leading questions were framed to obtain the desired answers from the OEMs. Some of leading questions highlighted by learned Counsel are as follows: a. It is gathered that Mobile Application Distribution Agreement ( MADA ) obligation requires the device manufacturers to pre-install a bundle of Google Mobile Services ( GMS ) before distribution. In light of the same, please furnish details about the possible dilemma faced by you. If any, in terms of avoidance to allow installation of competing app with apprehension of causing of duplication Apps and filling up precious ROM space (in addition of Google s) as it might adversely affect the user experience on their devices b. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functions performed by the Director General. The Hon ble Supreme Court has held that function of Director General is inquisitorial function. The Director General is to elicit relevant information for the purposes of discharge of functions of the Commission. In paragraph 126 of the CCI vs. SAIL judgment, Hon ble Supreme Court has noticed one of the functions of the Commission as inquisitorial. The Director General does not perform any adjudicatory functions and its role is only inquisitorial. From the facts as noticed by the Commission in its impugned order that after passing of the order by the Commission under Section 26 for carrying out the investigation, the Director General issued notice to several OEMs and other stakeholders eliciting their response. Further, information were called from time to time. The Director General was to collect information and data for the purposes of preparing a Report. There is no occasion for violation of principles of natural justice by the Director General, when he was only to inquire and collection information. 147. The learned Senior Counsel for the Appellant elaborating on his submission stated that the Director General was acting with pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such that Rule is statutory in nature. 31. It is of course true that the show-cause notice cannot be read hypertechnically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 32. Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he witnessed. The question shall not be put to enable the witness to give evidence which the prosecutor wishes to elicit from the witness nor the prosecutor shall put into witness's mouth the words which he hoped that the witness will utter nor in any other way suggest to him the answer which it is desired that the witness would give. The counsel must leave the witness to tell unvarnished tale of his own account. Sample leading questions extracted hereinbefore clearly show the fact that the prosecutor led the witnesses to what he intended that they should say on the material part of the prosecution case to prove against the appellant which is illegal and obviously unfair to the appellant offending his right to fair trial enshrined under Article 21 of the Constitution. It is not a curable irregularity. 151. In the above case, the Hon ble Supreme Court was considering the provisions of Evidence Act and the question, which a prosecutor is entitled to put to witness in a criminal trial. The above analogy cannot be applied with regard to investigation which is to be carried out by the Director General under the statutory scheme of the Competition Act, 2002. The Director General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded them apparently because he had pre-judged the issue and was determined to record a finding that the appellants had indulged in bid-rigging .. 154. The observation of COMPAT in paragraph 42 as extracted above were observation on the facts of the above case and on consideration of the material on record, there can be no dispute to the proposition that if the investigation conducted by the DG lacked objectivity and findings recorded by him is ex-facie erroneous, the same ought not to have been approved by the Commission. There can be no quarrel to the proposition laid down by the COMPAT in the above case. The learned Senior Counsel has also submitted that the judgment of the COMPAT has received approval by the Hon ble Supreme Court, since the Civil Appeal No.3525-3526/2017 filed by Competition Commission of India was dismissed by the Hon ble Supreme Court by judgment dated 10.08.2017. The Hon ble Supreme Court noticed that paragraph 42 of the judgment of the COMPAT and held that the aforesaid findings were based on detailed discussion on the basis of the material that was placed on record. The judgment of the COMPAT and Hon ble Supreme Court cannot be pressed in the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant has relied on judgment of Delhi High Court in Mahindra Electric Mobility Limited and Anr. Vs. Competition Commission of India (2019) SCC OnLine Del 8032, where Delhi High Court in paragraph 142, 148 and 212 laid down following: 142. The Competition Act does not take away or supplant the jurisdiction of the pre-existing jurisdiction of any court or tribunal. The decision of the Seven Judges' in L. Chandra Kumar (supra) is authority for the proposition that in the case of service matters, the Administrative Tribunal (which had replaced the HC) is the primary adjudicatory body, then also the court did not accede to the proposition that all particulars ought to be drawn from the judicial branch or should be so qualified. Given the multiple tasks that the Act requires CCI to discharge (advisory, advocacy, investigation and adjudication), it cannot be held that the CCI must necessarily comprise of lawyers or those possessing judicial experience or those entitled to hold office as judges, to conform with the provisions of the Constitution. CCI's task as the primary regulator of marketplace and watchdog in regard to anti-competitive practices was conceived by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll ensure that at all times, during the final hearing, the judicial member (in line with the declaration of law in Utility Users Welfare Association, (supra) is present and participates in the hearing; (d) The parties should in all cases, at the final hearing stage, address arguments, taking into consideration the factors indicated in Excel Crop Care (supra) and any other relevant factors; they may also indicate in their written submissions, or separate note, of submissions, to the CCI, why penalty should not be awarded, and if awarded, what should be the mitigating factors and the quantum-without prejudice to their other submissions. (iv) Since the petitioners had not availed the remedy of appeal (and had approached this Court) it is open to such of them who wish to do so, to approach the Appellate Tribunal, within 6 weeks; in such eventuality, the Appellate Tribunal shall entertain their appeals and decide them on their merits in accordance with law, unhindered by the question of limitation. 158. The learned ASG submitted that against the above judgment of the Delhi High Court, an Appeal filed by the Competition Commission of India before the Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 617. We proceed to consider the submission regarding measures one by one. 165. The Appellant submits that the Commission in paragraph 617.9 issued following direction: 617.9 Google shall allow the developers of app stores to distribute their app stores through Play Store. 166. It is submitted that the above order is passed without a finding of infringement, in regard of above, hence is an ultra vires direction. 167. The direction to carry rival app stores within Google Play Store bears no relation to the abuses alleged in the impugned order. There is no finding by the Commission suggesting any restriction of competition on competing app stores. The Commission has only considered this issue in the dominance section in the context of alleged entry barriers to establish in the market for app stores for Android. It is submitted that under the Act, the Commission can only remedy an abuse of dominance and not dominance itself. Even in the DG Report, the above issues is only considered in the factors to establish dominance and not as a finding of abuse of dominant position. It is submitted that direction heightens the risk of introduction of malware in the devic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Store. It is neither argued, nor found by the Commission that there is any abuse of dominance by Google in distribution of Apps by developers through its Play Store. 171. We may further notice that Issue No.VII framed by the Director General was to the following effect: ISSUE VII: Whether Google has abused its dominant position in Play Store by imposing unfair and discriminatory terms and conditions on App developers in violation of the provisions of Section 4 of the Act? 172. The Issue No.VII was answered in favour of Google in paragraph 594 of the judgment of the Commission, which is to the following effect: 594. The Commission has examined the information available on record including the findings of the DG, third party submissions as well as response filed by Google. The Commission is of the considered view that Google has been able to justify its conduct and no case is made out against Google under Section 4 of the Act, on this count. 173. Thus, when the Commission itself found Google has not abused its dominant position in Play Store market by imposing unfair and discriminatory terms and conditions on App developers, there was no occasion to direct th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolves risk of malware or harmful applications, which act as an entry barrier for the competitors in the market for app store for Android devices. In paragraph 179 of the order, the Commission has observed: 179. Based on the above, it is noted that the process of side loading of alternative app store or apps, which involves risk of malware or harmful applications, acts as an entry barrier for the competitors in the market for app store for Android devices, as users that do not have technical knowledge would not like to run the risk of side loading. The cumbersome process of side loading and security threats involved further enhances the dependence of Android users on Google Play Store. Moreover, sideloading of apps does not allow automatic update functionality for the apps, which deters the users as well as app developers, in general to rely on side-loading a viable option. In other words, the ability for consumers to sideload apps (installing apps without using an app store) does not exert any constraint on Google in the Android app store market. 178. What was observed by the Commission in the above paragraph is that the ability for consumers to sideload apps does not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code) Rules, 2021 [hereinafter 2021 IT Rules ] as well as Rule 8 of The Information Technology (Reasonable Security Practices And Procedures And Sensitive Personal Data or Information) Rules, 2011 [hereinafter 2011 Security Rules ]. 20. Rules 3(l)(i) and 3(l)(k) of the 2021 IT Rules are as under: 5. (1) Due diligence by an intermediary: An intermediary, including social media intermediary and significant social media intermediary, shall observe the following due diligence while discharging its duties, namely:- (i) the intermediary shall take all reasonable measures to secure its computer resource and information contained therein following the reasonable security practices and procedures as prescribed in the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011; xxx xxx xxx (k) the intermediary shall not knowingly deploy or install or modify technical configuration of computer resource or become party to any act that may change or has the potential to change the normal course of operation of the computer resource than what it is supposed to perform thereby circumventing any law for the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which Google was required to put in place warnings, so as to guard the users against potential threats of malware. When the statute provides for issuance of warnings, the warnings issued by Google at the time of sideloading can neither be said to be disproportionate nor illegal. The consequence of the directions issued in paragraph 617.10 is that Appellant is even prohibited to issue any warnings, which it is obliged by the statute, since that may be treated as restriction in sideloading. When the case of the Appellant is that there are no restriction in the sideloading of the App and Google only display appropriate warning to the users about the risk, the direction in paragraph 617.10 was unnecessary. Even though, user is confronted with certain warning in the process of sideloading, the said warning cannot be read as putting any restriction in sideloading. We have also noticed the submission of learned ASG relying on the Digital Markets Act (Regulation 2022/1925; DMA ) and Article 6(4) of the DMA, which directs that sideloading be permitted, while allowing the relevant OS developer to impose measures which are strictly necessary and proportionate to ensure that side-loaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legitimate interest in licensing its apps only for those devices which meet the minimum requirements set by it. In paragraph 541, the Commission further held that Google may pursue its legitimate interest by prescribing certain reasonable compatibility requirements to the extent these are applicable on devices of Google s applications. 183. The learned ASG refuting the submission contends that Section 27(a) sufficiently empowers the Commission to pass any remedial direction. It is submitted that Commission has held that provisioning and updation of APIs is a technological necessity for the device to work properly and without APIs a mobile device will become dysfunctional. The Commission found that new APIs can be accessed by OEMs only after signing MADA, whereas AOSP licencee, who develop Android forks are either denied access to APIs or the same is given to them after considerable delay, by which time MADA signatories would have received new functionalities and updates. Most Android Apps made by App developers function on basis of Google s proprietary APIs, their unviability disincentives developers from porting Apps to forks due to higher cost and significantly decreases chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed through scientific and technical development by the teams of Google and these APIs are necessary for functionality of the Apps in Google Play Store. We are therefore, clear that the APIs and Google Play Services, which are proprietary items of Google cannot be given in through unhindered access to App developers, OEMs and Google s existing and potential competitors. We are also of the view that proprietary software such as APIs, which are developed through scientific and technical innovation should fetch value to Google and, therefore, remain an incentive for a technological company/ Google to further carry out such development and monetize it through its commercial use. 189. We do not find any material in the impugned order as to why access to such APIs be provided to Google s competitors, App developers and OEMs without going through necessary technical and commercial engagement with Google. Further, APIs have not been found as part of any abusive conduct by the Appellant. 190. We are thus of the view that the direction issued in paragraph 617.3 is unsustainable and is, therefore, set aside. 191. Now, we come to the direction issued in paragraph 617.7, i.e. Google sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions are in accordance with the findings of the Commission as contained in the impugned order. No exception can be taken to the directions issued in paragraph 617.1, 617.2, 617.4, 617.5, 617.6 and 617.8. All the above directions are upheld. 196. In view of the foregoing discussions we direct for deletion of directions at paragraph 617.3, 617.9, 617.10 and 617.7 while upholding other directions in paragraph 617. Issue No. 13 197. We consider the issue of imposition of penalty on Google by the Competition Commission of India (CCI) and whether it has been done in accordance with relevant turnover and the doctrine of proportionality . 198. The Learned Senior Counsel for Appellant has contended that the imposition of penalty by the CCI has not been done in accordance with the ratio expounded by the Hon ble Supreme Court in the case of Excel Crop Care Limited vs. Competition Commission of India (2017 8 SCC 47) wherein the Hon ble Apex Court has analyzed the legislative intent of Section 27 and held that penalty should be computed under Section 27 (b) with respect to the relevant turnover of the corporate entity and not its total turnover . He has further cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l basis, seek to revise the penalty based on any other material that may come to its notice later. In this regard, he has cited the judgment of Securities Appellate Tribunal in the matter of Zee Telefilms Ltd. Vs. The Adjudicating and Enquiry Officer, Securities and Exchange Board of India (2003 SCC Online SAT 5) wherein it is held that on passing the final order in adjudication, the Adjudicating Officer becomes functus officio and there is no scope for any further proceedings in the matter before the Adjudicating Officer of SEBI. 202. The Learned Senior Counsel for Appellant has also claimed that while Google had complied with the order of CCI for supplying information of relevant turnover and submitted its financial information and financial statements accurately, the same was not relied upon and while the information and statements were supplied by Google on 17.12.2021, the Commission maintained an inexplicable silence till 19.9.2022, and did not indicate any concern regarding the inadequacy of information submitted by Google. He has further submitted after final arguments were concluded on 2.9.2022, CCI invited written submission on issue of the quantum of penalty on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main case on 2.9.2022, the CCI asked Google to submit its written arguments on the quantum of penalties by 16.9.2022, and vide order dated 19.9.2022 CCI again asked Google to submit requisite financial information and data along with certificates of Chartered Accountant within 7 days since information submitted earlier by Google was not found in accordance with the requirement. He has submitted that some more information was submitted by Google vide its letter dated 11.10.2022. He has argued that CCI s order dated 22.10.2022 has considered the information supplied by Google, but the financial information submitted by Google was not as required by CCI and about which Google was being repeatedly informed to submit appropriate and adequate information to help the CCI calculate the relevant turnover and mention about the inadequacy of submitted information has been made in detail in the Impugned Order from paragraphs 620 onwards. The Learned ASG has thus contended that despite being repeatedly asked and given additional time to submit requisite information, the Appellant did not submit clear and unambiguous financial information alongwith certificates of Chartered Accountant. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commission may consider appropriate percentage, as the case may be, by taking into consideration nature, gravity, extent of the contravention, role played by the infringer (ringleader? follower?), the duration of participation, the intensity of participation, loss or damage suffered as a result of such contravention, market circumstances in which the contravention took place, nature of the product, market share of the entity, barriers to entry in the market, nature of involvement of the company, bona fides of the company, profit derived from the contravention, etc. These factors are only illustrative for the Tribunal to take into consideration while imposing appropriate percentage of penalty. 208. The judgment of Hon ble Supreme Court in the matter of Excel Crop Care Limited (supra) regarding relevant turnover is considered in the impugned order as follows:- 624. In this connection, it would also be apposite to refer to the decision of the Hon ble Supreme Court of India in Excel Crop Care Limited v. Competition Commission of India Anr, Civil Appeal No. 2480 of 2014 wherein the Hon'ble Supreme Court considered the issue as to whether penalty under Section 27(b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Supreme Court of India in Excel Crop Care Limited (supra) of which the relevant portion with regard to the turnover is to be considered for imposition of penalty. The CCI thus adopts the criteria of relevant turnover as propounded by Hon ble Supreme Court and has proceeded to determine it to calculate appropriate penalty based on facts and circumstances of the case. 210. It is trite to mention that digital platforms such as the one operated by Google using the Android OS based Mobile devices, are very different from traditional technology platforms. The softwares that run on these digital platforms are interconnected and interact at the machine level and also at the user level through flow of traffic and data, and therefore, the business model, incentives and the revenue streams are a net result of such interplay of software and programs including various of apps and services that are integral feature of the mobile devices. In addition, the markets are multi-sided in the digital space, which is evidenced in the business model adopted by Google in the present case. While Google purports to offer its mobile OS free , there are a number of apps and services on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Google Search drive the business of Google based on traffic and data gathered from innumerable users. Thus, the entire ecosystem of Google sitting on Android OS in the mobile device becomes the source of revenue to Google and, therefore, the total revenue from all the apps and services in the device becomes the relevant turnover . 213. On the basis of the three inter-woven agreements, namely, MADA, AFA/ACC and RSA, and Google s business model using traffic and data from the multiple apps and services, we are not convinced that the relevant turnover should only be limited to Google s revenue from Google Search and You-Tube, as has been argued by Google. 214. This business model and the functioning of Android Google s eco-system on mobile devices has been captured by the CCI in the Impugned Order while calculating the relevant turnover and thus the CCI has decided to take the sum total of revenue of various segments/heads of Google business operating pertaining to India while calculating the relevant turnover . 215. We are, therefore, of the opinion that while calculating the relevant turnover , the CCI has correctly considered the sum total of revenue of variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in para 650 and elsewhere in the Impugned Order and hold that this penalty imposed is final and would not be subject to any revision upon Google furnishing any further financial details and supporting documents, as sought by CCI vide its order dated 19.9.2022. 218. Now coming to the submission advanced by Shri Amit Sibal, learned Senior Advocate, Shri Abir Roy and Shri Rajshekhar Rao, Senior Advocate on behalf of different Intervenors, suffice it to say that they have supported the impugned order advancing certain submissions which have been elaborately advanced by learned ASG appearing for Competition Commission of India, hence submission of Intervenors need no separate considerations. Issue No. 14 219. In view of the foregoing discussion, the impugned order of the Commission is upheld except the four directions issued in paragraph 617.3, 617.9, 617.10 and 617.7. The Appellant are thus not entitled for any other relief except for setting aside the above four directions. 220. In the result of foregoing discussions, we dispose of this Appeal in following manner: (i) The impugned order of the Commission dated 20th October, 2022 is upheld, except as indicated at dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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