NCLAT upholds CCI’s ₹1337­cr fine on Google

  • March 30, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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NCLAT upholds CCI’s ₹1337­cr fine on Google

Subject: Economy

Section: Msc

Context: the National Company Law Appellate Tribunal (NCLAT) on Wednesday upheld the penalty of ₹1,337 crore imposed on Google by the Competition Commission of India (CCI) for its anti-competitive conduct in the Android ecosystem.

Details:

The appellate tribunal simultaneously set aside CCI’s four critical directions — of the 10 non-monetary directives it issued in its Android ruling of October 20, 2022 — that would have forced Google to change its business model. These relate to the requirement of Google to share its Play Services APIs to OEMs, app developers and its existing or potential competitors; non-restriction of the un-installing of its pre-installed apps by users; allowing app store developers to distribute through Play Store; and not restricting the ability of app developers, in any manner, to distribute their apps through side-loading.

The six non-monetary directions that Google will have to comply with in the next 30 days are: OEMs shall not be restrained from (a) choosing from Google’s proprietary applications to be pre-installed and should not be forced to pre-install a bouquet of applications and (b) deciding the placement of pre-installed apps on their smart devices; licensing of Play Store to OEMs shall not be linked with the requirement of pre-installing Google applications; Google shall not offer any monetary/other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services.

Competition Appellate Tribunal vs NCLAT authority over CCI:

  • The Competition Act, 2007, was enacted after amending Competition Act, 2002, that led to the establishment of the CCI and the Competition Appellate Tribunal.
  • The government replaced the Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.
  • In 2017 an amendment was made through which the provision of Part XIV of Chapter VI of the Finance Act, 2017 came into operation.

National Company Law Appellate Tribunal

  • National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect from 1st June, 2016.
  • Objectives
    •  Hear appeals against the orders passed by NCLT(s) under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC).
    •  Hear appeals against the orders passed by Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
    • Hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI) – as per the amendment brought to Section 410 of the Companies Act, 2013.
    • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority. 
  • Composition:
    • The President of the Tribunal and the chairperson and Judicial Members of the Appellate Tribunal shall be appointed after consultation with the Chief Justice of India.
    • The Members of the Tribunal and the Technical Members shall be appointed on the recommendation of a Selection Committee consisting of:
      • Chief Justice of India or his nominee—Chairperson.
      • A senior Judge of the Supreme Court or a Chief Justice of High Court— Member.
      • Secretary in the Ministry of Corporate Affairs—Member.
      • Secretary in the Ministry of Law and Justice—Member.
      • Secretary in the Department of Financial Services in the Ministry of Finance— Member.
  • Eligibility:
    • Chairperson – Should be/been judge of the Supreme Court or should be/been Chief Justice of the High Court.
    • Judicial Member – Is/has been a judge of a High Court or is a judicial member of a tribunal for 5 years or more.
    • Technical member– Person with proven ability, integrity and standing having special knowledge and experience of 25 years or more (in specified areas).
    • Term of office of chairperson and members is 5 years and they can be reappointed for additional 5 years.

Composition of the CCI:

  • Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002, it was duly constituted in March 2009.
  • The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases.
  • The Commission consists of one Chairperson and six Members as per the Competition Act who shall be appointed by the Central Government.
  • The Chairperson and other Members shall be whole-time Members.
  • Eligibility of members: The Chairperson and every other Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission.
economy NCLAT upholds CCI’s ₹1337­cr fine on Google