Competition Commission Of India Investigates Unfair Practices by Google, Apple

Context:

• This article is based on the news ”Google, Apple under probe for unfair practices: Competition Commission of India chief” which was published in the Hindustan Times. Competition Commission of India (CCI) is probing Google and Apple for alleged unfair business practices.

Competition Commission of India imposes a monetary penalty 

• The Competition Commission of India had ordered detailed investigations against Google with respect to its alleged abuse of dominance in the smart television segment and in the news content space.
  • Earlier, the regulator had passed orders against Google in cases related to the Android system and PlayStore. 
  • Competition Commission of India had passed a cease and desist order for abuse of dominant position in that segment and a penalty of Rs 1,337 crore was imposed.
  • Google has deposited the penalty along with interest. On the behavioral remedies, the company had taken up the matter with the National Company Law Appellate Tribunal (NCLAT).
• The regulator had ordered an investigation against Apple for alleged anti-competitive practices with respect to its App Store.
• Misuse of Data: Tech-giants such as Apple and Google are not charging for their services but the mis-use of data involving data concentration, self -preferencing and anti-steering provisions is a cause of concern.

Also read: Introduction To The Digital Personal Data Protection Bill

What is the Competition Commission Of India?

• Competition: Competition is the best means of ensuring that the ‘Common Man’ has access to the broadest range of goods and services at the most competitive prices. 
• Competition Commission of India: It has been established to enforce the competition law under the Act. 
• The Competition Act, 2002: The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations, which causes or likely to cause an appreciable adverse effect on competition within India.
  • This Act replaced the Monopolies and Restrictive Trade Practices (MRTP) Act of 1969. 
• Powers and Functions of Competition Commission of India: Enquiry into Anti-Competitive Agreements, Advisory Functions, Divide the Enterprise Enjoying Dominant Position, Regulate its Own Procedure, Power of Civil Court and Imposing Monetary Penalties.

What is the Competition (Amendment) Act, 2023?

• The Competition (Amendment) Act, 2023 was recently passed in India. 
• New Deal Value Threshold: Under this provision, transactions involving acquisition, merger, or amalgamation that meet or exceed INR 2,000 Cr and involve entities with substantial business operations in India will necessitate approval from the Competition Commission of India or CCI.
• Updated Definition of “Control”: It now includes the concept of “material influence.” This change acknowledges that having the ability to exert significant influence over the management, affairs, or strategic commercial decisions of an entity or group of entities is a key factor in determining control. 
• Reduced Timeline: For the implementation of a combination from 210 days to 150 days. Additionally, the Competition Commission of India is now required to formulate a prima facie opinion on a combination within 30 days, failure to do so results in the combination being deemed approved. Open Offers and Share Acquisitions: Implemented via regulated stock exchanges prior to obtaining CCI approval. This provision grants acquirers more flexibility to initiate open offers or acquire shares from the open market while ensuring that effective control is not transferred until the required regulatory approval is obtained. 
• Introduces a Three-Year Limitation Period: For entertaining information regarding alleged contraventions under the Act. 
  • It establishes a clear timeframe for parties to file complaints and ensures the timely execution of competition law enforcement.
• Introduces A Settlement And Commitment Mechanism: For enterprises under inquiry for abuse of dominance or anti-competitive agreements. 
  • This framework provides enterprises with the opportunity to seek resolution through mutually agreed remedies, thereby promoting cooperation and expediting dispute resolution. 

What are some significant cases handled by the Competition Commission of India to promote healthy competition?

• Sonam Sharma v. Apple in India Case: Competition Commission of India characterised “tying” as anti-competitive. Tying is a seller’s requirement that if a customer purchases its “tying” product, they must also purchase the seller’s “tied” product. 
  • Apple sells iPhones and Apps for iPhones in a relatively unregulated market. 
• Javeed v. Google LLC Case 2019: Google abusing its dominant position in the mobile operating system-related markets. 
  • Google made it compulsory for developers of smartphones and tablets to install pre-determined Google-based applications were held to be in violation of the Indian Competition Act (2002). 
• Surinder Singh Barmi v. BCCI Case 2017: BCCI was held to have foreclosed competition by granting itself the power to either allow or disallow new entrants in the market. 
• The Supreme Court (SC) refused to restrain the Competition Commission of India from probing the 2021 privacy policy of WhatsApp. While the CCI plays a crucial role in ensuring fair competition in the market, it also faces several challenges.

What challenges are faced by the Competition Commission of India?

• Pending Cases: Justice delayed is justice denied and investigations go on for very long because the Director-General (DG) keeps changing. So, there should be some permanent staff members who can form the pillar of institutional continuity. 
• Absence of Judicial Member: The presence of a judicial member in Competition Commission of India  is critical. The Delhi High Court in its judgments urged the Ministry of Corporate Affairs to ensure it, but that has not happened so far.  
• Toothless Regulator: The majority of CCI orders are being appealed to the NCLAT or are being contested in the high courts or SC.
• Penalty Realisation: The CCI has delivered anti-competition orders of wide import and imposed huge fines, but has collected very little, as most orders are under appeal and their operation has been stayed by the appellate court.
• Overlapping Duties: The Competition Commission of India’s duties also intersect with those of other regulatory agencies, such the Telecom Regulatory Authority of India (TRAI), in areas like telecom, the internet, and big technology.
• New Challenges: With rapidly changing technology with introduction of Web 3.0, Artificial Intelligence, IoT, Blockchain etc. new issues emerge like data protection and privacy, search bias, platform neutrality, deep discounting, hostile takeovers, confidentiality, etc. 

International Cooperation: Competition Commission of India’s Role in Free Trade Agreement Negotiations

• Competition Commission of India has entered into MOUs with several of its peer agencies like Federal Trade Commission (FTC) and Department of Justice (DOJ) of USA, Canada, EU, Russia, Australia, China, Brazil, Japan, South Africa etc. 
• CCI also participates in the negotiations of the Competition Chapter under the Free Trade Agreements negotiated by the Government of India.
• Memberships of international organisations:
  • International Competition Network (ICN): ICN is a virtual international organisation and its members represent competition authorities across the globe. Competition Commission of India is a member and has been an official invitee to the conferences and workshops organised by the ICN.
  • BRICS Competition Authorities: A MoU between the competition authorities of BRICS was signed in May 2016 during the International Legal Forum held in St. Petersburg, Russia.
  • Organisation for Economic Co-operation and Development (OECD): The Commission has an observer status with the Competition Committee of OECD. The Commission regularly participates in the meetings to gain exposure to the global best practices in the field of competition law and policy. 

Also read:  World Investment Report

Conclusion

Competition Commission of India  will soon do a market study to understand the possible impact of Artificial Intelligence so that they can understand the market better. CCI is looking at the possibility of any anti-competitive practices, and  how they can be addressed.  Going by global experience, it is still early days for the competition regulator in India. Challenges are to be expected and overcoming them will be key to having a healthy, competitive environment in the Indian business ecosystem.