Parul Thadani

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Introduction

Today digital devices play a crucial role in our lives and they provide several facilities to us which play an indispensable part in our day-to-day routine. Many services are provided to us by digital devices such as online search engines, maps, mail, e-payment facility, mobile services, so on. Herein, Google LLC is believed to be one of the most dominant search engines, and it provides several other services to customers. As Worldwide Google provides around 90% of Android Mobiles with a Google Play Store facility. Recently in India Google launched a Unified Payment Interface (UPI) payment-based application known as Google Pay which was alleged by the Informant to enjoy a favouring position as compared to the other Unified Payment Interface payment-based applications. The present case was dealt with under Competition Act.

 Competition Act, 2002.

What the law says 

The Competition Act, 2002 main purpose is to prevent anti-competitive trade practices, to protect invasion of legal rights of customers, protection from abuse of dominance, and prevention of practices from any other adverse effect on markets’ smooth functioning. The act promotes and safeguards fair competition in the market where every player is treated equally and dealt with justly. In case of any misconduct being practised then the respective players are punished. Herein, the case deals with section 4 of the Competition Act which prohibits abuse of dominant position. It has several provisions, one such provision is section 4 (2)(e) which deals with the usage of dominant position in one relevant market to enter into other relevant markets and the case in hand is largely dependent upon this provision.

Facts of the case

• The Informant, XYZ, is an unknown person as he/she has requested the Competition Commission of India to keep the identity confidential. As disclosing of Identity might have left a chilling effect in the case.
• Opposition Party 1, Alphabet Inc., is the parent company of Google and an American Multinational Company. The major revenue of the company comes from advertisements that demonstrate Google’s importance.
• Opposition Party 2, Google LLC, is an American Multinational Company that provides a wide search engine, internet services, and products. It runs several other subsidiary companies.
• Opposition Party 3, Google Ireland Limited, is a subsidiary of Google LLC and provides services such as search engines, advertisement programs, web, and computing tools in European Region and Switzerland.
• Opposition Party 4, Google India Private Limited, is a subsidiary of Google LLC and provides search engine, programming services, and other products in Indian Market.
• Opposition Party 5, Google India Digital Services Private Limited, is a subsidiary of Google LLC and a nodal entity of Google Pay, hence whoever accepts terms and conditions of Google Pay has entered into an agreement with Google India Digital Services Private Limited.
• Herein, the case revolves around the importance of Google in Android Devices, from Play Store to Google Search Engine. Recently Google introduced Google Pay as a UPI Payment System in India and an allegation was fabricated that it enjoyed a favoring position over other UPI Payment Systems. It was stated that Google uses its dominant position to provide an undue advantage over other UPI Payment Applications.

Arguments made by the Informant

The Informant claimed that Google through the help of Google Play Store provides unfair privileges to Google Pay. Google manipulates its position by ranking biasedly Google Pay above its competitive UPI-based Payment Applications. Also, Google favours Google Pay by showing it in featured applications in Play Store.

Further stated, Google Play Store mandates Players to pay through Google Pay if they want to get their Applications listed in Play Store and likewise mandates Users to purchase applications through the Google Pay method. Additionally, Google charges a 30% commission from developers for letting them get access to Play Store’s Payment System and Play Store In-App Billing which is different from one-time payment for listing the respective applications.

It was also stated that Google Pay imposes unfair terms on users by sharing their data with a third party which is not in compliance with the data localization rules by the Reserve Bank of India.

Arguments made by the Opposing parties

The Opposite Parties stated with the help of proof that Google does not provide any sort of unfair privileges to Google Pay due to its dominant position in the market. Also said that rankings and featuring of Google Pay is based on merit and not otherwise.

Further asserted, Google Play Store doesn’t mandate Players and Users to make payment through Google Pay as it does provide other payment method modes. Google justified that the 30% commission and in some cases 15% commission is not arbitrary as it covers up third-party fees.

It was also stated that Google Pay terms and conditions on users which don’t comply with the data localization rules by the Reserve Bank of India are the subjects of Delhi High Court and Madhya Pradesh High Court. Henceforth, it cannot be said that Google practices any form of power misuse.

The ratio of the case

Referring and considering the relevant arguments made by the parties involved in this case, the Competition Commission of India has held that the claims of the Informant were although reliable but the ones provided by Google showed it otherwise. But considering the facts and proofs provided the CCI is of the view that Google has contravened section 4 of the Competition Act and this demands a detailed investigation.

The CCI held that the case is handed over to Director-General for further detailed investigation. Also, it was considered that since the Informant identity was confidential hence Google was unable to cross-question or challenge the locus. Therefore when the case is handed to Director-General then the cross-examination and identity can be acknowledged for the betterment of the case.

Lastly, it is stated that the order will not be considered final as the same case is being handed over to Director-General for a detailed study and the same should be concluded within 60 days from the date of this order.

Our analysis of the judgment

The case has been dealt with quite carefully by the CCI keeping a note of every argument made and facts presented by the parties. It is a case that can be used as a precedent in upcoming cases of the Competition Act, 2002. Here it is appreciable the way the order has been passed considering facts, information, arguments and a logical step has been taken.

Ahead, though the CCI was in a pickle when the data was presented by both the Informant and the Opposition Parties were not similar still it has failed to take matters into self-hand. As even though the allegations were drastic and did demand a detailed study of information but the ones presented were prima facie evident that Google wasn’t completely off the hook. Therefore, a more stringent move by CCI could have been more appropriate as usage of dominance was displayed and proved.

Conclusion

In Conclusion, even though the judgment has been delivered thoughtfully and tactically still it falls short to take a bold stand on the noticeable yet ignored doings of Google. The case nevertheless is one of importance as the UPI Payment Method is comparatively newer than other available payment methods and unlike any other. Therefore, this is a subject that is going to come in the future lot more and this will surely pave the way for suitable judgments to be passed.