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A decision by a US tech giant to delist Indian apps has sparked the ire of the government and the competition regulator. The confrontation positions the authorities as safeguarding domestic players and preventing abuse of market dominance, writes Freny Patel.

The Indian government’s intervention in early March to stop Google delisting some of the leading domestic apps from its marketplace came as the country’s antitrust watchdog remained indecisive.

The government said it was stepping in to prevent Google from removing several top domestic apps to safeguard domestic startups and promote a more competitive tech industry.

About 200 Indian apps had been delisted from the Play Store. Minister for Railways, Communications and Electronics & Information Technology, Ashwini Vaishnaw, lashed out, stating, “This delisting cannot be permitted.”

Sending out a strong message that India will not tolerate any actions taken by Big Tech that could jeopardise the growth and success of its startup ecosystem, Vaishnaw said that the fate of the startup ecosystem, a key part of the Indian economy, “cannot be left to the policies of any Big Tech”.

The government’s intervention in the Google Play Store case was most likely triggered by its desire to propel the growth of India’s local startups, given that Google has 95% market share in the licensable mobile operating system market. This makes the Google Play Store a “must-have” for smartphone users and “indispensable” for app developers, says Lagna Panda, a New Delhi-based lawyer with P&A Law Offices.

“The government wants to showcase India as the new tech economy, especially now that China is not doing very well in the tech space,” says Panda.

Fast forward to the Ides of March, and the Competition Commission of India (CCI), waking up from its slumber, ordered an investigation into Google’s “excessive” and “unfair” in-app pricing policy – a policy the watchdog said failed to have any reasonable economic relation to the services provided.

The CCI’s investigation of Google Play’s alleged excessive pricing was triggered by three complaints filed by: People Interactive India, which operates Shaadi.com and Sangam.com; Mebigo Labs, the owner of Kuku FM; and the Indian Broadcasting & Digital Foundation, together with the Indian Digital Media Industry Foundation.

“Unlike the government, which can put pressure on parties, the CCI would take time to assess the situation, go through due process and give notice to parties,” says Man Mohan Sharma, the head of competition law and policy at Vaish Associates in New Delhi. Sharma formerly served at the CCI as an additional registrar, and was responsible for drafting the Implementing Regulations under the Competition Act, 2002.

Man-Mohan-Sharma-quote

As this would have taken time, “it was imperative for the government to step in to ensure against the closure of businesses”, he says.

The government’s intervention and action taken by the CCI have no comparison, says Kaushal Kumar Sharma, the first director general and head of the merger control and antitrust divisions at the CCI, and currently a senior partner at Singhania & Co in New Delhi.

“It’s like comparing apples with oranges. The CCI is a creation of the statute having its independence. Nonetheless, a statute is always a creation of the parliament, and the parliament, through its executive arm, the government, has the statute-making power. Therefore, government intervention and action by the CCI cannot and should not be compared,” says KK Sharma.

It was critical for the CCI to investigate the Google dispute with app developers at this juncture. Anisha Chand, a Mumbai-based partner in the corporate and commercial practice group at Khaitan & Co, says: “While the government’s stance has been taken under public policy, it is not clear under which legislation it would fall.”

Panda agrees and says: “There is no provision under the law whereby MeitY [the Ministry of Electronics & Information Technology] can actually step in and take action against Google delisting an app from Google Play.”

Although the CCI has taken action on Google’s allegedly unfair service fee policy, the delisting of apps is not specifically discussed in the CCI’s publicly available order.

“Removing Indian apps from Google Play Store by Google is a violation of section 4(2)(c) of the Competition Act, 2002 – that of a dominant player denying market access, for which Google can be directed to restore the apps and also be penalised by the CCI,” says MM Sharma.

The CCI can grant interim relief to reinstate the apps under section 33 of the Competition Act, 2002. Chand says doing so “falls under a judicial order, as opposed to the government’s executive guidance or directive”. This is important because the government’s direction needs teeth, she adds.

Although the CCI can pass interim orders under section 33 of the act and stay the levying of commission rates, MM Sharma points out: “this will require a lot of courage”.

Should the CCI pass such interim directions before the conclusion of the entire inquiry, neither the government nor the courts will have any role, he says.

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