Amazon and Flipkart found violating Competition law in India-DG investigation report out
So, has Google got it wrong this time? Recently, the Delhi High Court has rapped the internet Giant for “threatening” to sue the Fair Market Regulator, the Competition Commission of India (CCI) itself for the “leak” of the confidential investigation report of its investigative arm, the director general, in the media leading to headline stories in India. The manner of protest and reaction by Google smacks both, arrogance, and ignorance about the procedural aspects of India’s common law and calls for a public debate.
Undoubtedly, the media leak of this magnitude, where the whole investigation report gets leaked to “unauthorised” persons ( and was reportedly reviewed exclusively as claimed by the Times of India headline story dated 18 September ,21 ) is unprecedented and has caused huge embarrassment for the CCI. It is condemnable and reveals chinks in CCI’s armor, for which, I am sure, CCI must have started internal inquiries. This may undermine the hard-earned reputation of the CCI as an efficient regulator, to keep business secrets, particularly, those related to ex ante and mandatory competition assessments of mergers and acquisitions. This deserves a serious consideration at the highest levels in the government to restore the credibility of this most important and essential institution, a sine qua non for growth of free market economy in India.
In the backdrop of the above caveats, can the allegedly ‘threatening letter” sent by Google’s top, US based legal managers, to the Chairman CCI (leading to the filing of the legal suit (for defamation??) seeking the quashing of the investigation report itself on account of the said leakage can be legally and morally justified. Since the matter is sub judice, no outcome can be or should be predicted yet it will be pertinent to reflect on other related aspects which are germane to this episode for larger public interests.
Facts first. Like somewhat similar in the European Union, Google was found to have abused its dominant position by CCI in the market market for “online general web search and web search advertising services” in respect of “commercial flight units” and “negotiated search intermediation agreements” in 2018 and CCI vide order dated 8 February 2018 imposed a penalty of INR 136 Crores on Google . This 2018 order was challenged by Google and its appeal is still pending in NCLAT, the appellate tribunal, which also hears appeals against orders passed by CCI under the Competition Act, 2002.
Besides the above first case, which is sub judice, Google is currently facing three parallel Antitrust inquiries in India before CCI on account of its alleged position of dominance in three separate yet related online markets. First inquiry ordered vide CCI order dated 16 April 2019 is for Google’s allegedly unfair and restrictive conditions imposed on Smartphone makers using Google’s Android Operating System (OS), as well as, in the market for the Applications available on Google’s Play Store for Android OS, which is used in 98% Smartphones Globally as well as in India (with the limited exceptions being that of Apple’s I-Phones and Blackberry’s now almost obsolete own OS). Second inquiry ordered vide CCI Order dated 09 November 2020 related to alleged leveraging of its dominant position in the above two markets to protect and strengthen its market power in the market for the Applications facilitating online payments through UPI, by allegedly favoring its own Application, Google Pay for purchase of Apps and In-App purchases (IAPS). The third inquiry ordered vide CCI order dated 22 June 2021 relates to it using its dominant position allegedly for compulsory tying of its ‘must have’ app , the licensable Android Mobile OS and Google Play Store with Android TV Operating System (Licensable OS developed by Google), Fire TV (Licensable ‘forked android’ OS developed by Amazon), etc. in the market for licensable Android smart TV operating systems in India, and the market for app stores for android mobile operating systems as well as in the associated relevant market for app store for Android smart TV operating systems in India .The DG investigation report which was leaked pertains to the first inquiry ordered in April 2019 and its findings are obviously most important since they will influence the findings in the other two pending investigations.
Mind you these investigations against Google were based on complaints filed by public spirited individuals in India (mainly from Lawyers based in Delhi!) after similar inquiries were ordered against Google in the European Commission. Google’s main defence before the EC apparently is that since its innovative OS and Play Store and licensable Android smart TV operating systems have been welcomed by consumers across the globe and are maximum in demand, cannot be scrutinized under the competition law whose main objective is consumer welfare and for that very reason its market conducts are pro- competitive and not anti-competitive.
Be it as may, the CCI as an institution and certainly not its chairman, can be logically blamed for the self-harming media leak. Lapse has been on the part of the DG office which is headed by a serving IPS officer and is physically and legally a separate office, (though under the administrative control of the CCI) responsible for conducting investigation into matters so directed by the CCI, an adjudicatory body, after finding a prima facie case for its intervention. The Google’s letter to CCI Chairman is like someone blaming the trial court for media leaks of the charge sheet by the police! Google seems to have made a self-goal by this apparently ill-advised move, which may backfire, since the present litigation is likely to be seen as an attempt to frustrate the inquiry rightly ordered by CCI, which no higher court in India may agree to stall due to some landmark supreme court decisions.
In fact, there are silent whispers in some quarters, that Google through its select band of lawyers from India, may have orchestrated this media leak to frustrate the impending CCI inquiry, by dragging CCI into prolonged litigation, knowing fully well about the slow pace of legal adjudication in Indian Courts!!
On the other hand, I am sure that this unauthorised media leak by some corrupt official in the DG office and given its impact on CCI’s reputation, will not be taken lightly by CCI top brass and this will hopefully lead to strict departmental action against the erring official by CCI. Since the DG office is also technically under the Central Government, it may also consider taking action under the CCS (Conduct) Rules and perhaps, also under the Official Secrets Act, since this episode also affected reputation of India’s legal and judicial set up , and may affect the present flow of foreign direct investments to India , particularly , between India and US. A quick and stern action by CCI to identify and punish such rogue insiders in the DG office will help it recover its credibility.
At the same time there is need to revisit the limits on such “ultra-investigative” journalism by the main stream media in India in ongoing and sensitive cases pending in CCI against Big Tech, as such premature reporting damages the image of India’s otherwise robust legal and judicial system. But hope fully this may also improve the regulatory oversight.
N.B.- The shorter edited version of this article titled “ Google Versus CCI: Whom to blame for the media leak” was published in the BUSINESS STANDARD on 1st October ,2021 .
#Google #Antitrust #Abuseofdominance
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