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Public Version Case No. 19 of 2020 Page 1 of 28 COMPETITION COMMISSION OF INDIA Case No. 19 of 2020 In Re: Kshitiz Arya Flat No. 121, Block-I, Nav Sansad Vihar, Sector -22, Dwarka, New Delhi - 110077 Informant Party No. 1 Purushottam Anand 29A, 2nd Floor, M Block, Malviya Nagar, New Delhi - 110017 And Informant Party No. 2 Google LLC 1600 Amphitheatre Parkway, Mountain View, CA 94043, USA. Opposite Party No. 1 Google India Private Limited No 3, RMZ Infinity - Tower E, Old Madras Road, 4th & 5th Floors, Bangalore - 560016. Opposite Party No. 2 Xiaomi Technology India Pvt. Ltd. Orchid (Block E), Ground Floor to 4th Floor, Embassy Tech Village, Marathahalli- Sarjapur Outer Ring Road, Bengaluru, Karnatka 560103 Opposite Party No. 3 Public Version Case No. 19 of 2020 Page 2 of 28 4. TCL India Holdings Private Ltd. SATS CORPORATION #160-162, Sector 21-B, Faridabad, Haryana, India Opposite Party No. 4 CORAM Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 48 A (3) of the Competition Act, 2002 1. The Information in the present case was filed by two individuals, namely Mr. Kshitiz Arya and Mr. Purushottam Anand (collectively referred to as the ‘lnformants’) under Section 19(1)(a) of the Competition Act, 2002 (the 'Act') against Google LLC (‘OP-1’), Google India Private Limited (‘Google India’ or ‘OP-2’), Xiaomi Technology India Private Limited (‘Xiaomi’ or ‘OP-3’) and TCL India Holding Private Limited (‘TCL’ or ‘OP-4’) for alleged contravention of various provisions of Section 3 and Section 4 of the Act. OP-1 and OP-2 are hereafter collectively referred to as ‘Google’. Public Version Case No. 19 of 2020 Page 3 of 28 Facts as stated in the Information 2. The Informants, stated to be consumers of the android based smart-phones and smart television devices, have alleged that Google is guilty of anti-competitive practices which violate Section 4 read with Section 32 of the Act. It has also been alleged that Google has entered into anti-competitive agreements with OP-3 and OP-4 which are in violation of Section 3 read with Section 32 of the Act. 3. OP-1 is stated to be a multinational technology company specializing in internet-related services and products. It has been averred that majority of smart mobile and tablet manufacturers in India are using OP-1’s Android Operating System. Further, OP-2 is stated to be an Indian subsidiary of OP-1. OP-3 and OP-4 are stated to be leading manufacturer/seller/distributor of smart TV devices in India. The Informants have included only two of the leading smart TV/mobile manufacturers in the matter and have requested to include other Original Equipment Manufacturers (‘OEMs’) as party(ies), during the course of investigation, if deemed fit. 4. In the present matter, the Informants, relying on various media reports, averred that Google enters into agreements known as the Television App Distribution Agreement (‘TADA’) and the Android Compatibility Commitments (‘ACC’) with Smart TV OEMs and alleged that by virtue of the restrictive covenants in the said agreements, the Opposite Parties are liable for contravention of various provisions of Section 3(4) and Section 4 of the Act. 5. The Informants have also made brief submissions on the smart TV ecosystem wherein, it has been averred that a smart TV is an upgrade to the traditional/ conventional television device in so far as it enables the consumers to stream video content available over the internet, view photos, browse internet, etc. Further, smart TVs require an Operating System (‘OS’) to provide the consumer with a user-interface for facilitating the use of smart TV Public Version Case No. 19 of 2020 Page 4 of 28 functions. It has also been averred that the user cannot change the pre-installed OS on a smart TV device. The Informants have further submitted that one of the most popular operating systems used by smart TV OEMs in India is Android TV, an operating system developed by Google especially for television devices. As per the Informants, Google licenses the Android TV operating system to smart TV OEMs in similar fashion as it licenses Android for smart mobile phones to smart mobile device OEMs. 6. The Informants alleged that Google has successfully asserted its dominance in the market for licensable operating systems for smart TVs. Additionally, the Informants claimed that Google also holds a dominant position in the market for app stores for smart TV operating systems, as nearly all Android TVs come pre-installed with Google’s proprietary Play Store. 7. The Informant alleged that Google had imposed several restrictions on smart TV and mobile device OEMs through agreements, leading to an abuse of its dominant position under Section 4 of the Act. These restrictions included bundling its app store (Play Store) with the Android TV operating system, ensuring that all Android TV-based smart TVs came pre-installed with the Play Store. Google’s ACC, formerly known as Anti-Fragmentation Agreements (‘AFA’), allegedly prevented OEMs from manufacturing, distributing, or selling devices running on a competing forked Android OS, thereby denying market access in violation of Section 4(2)(c) of the Act. Additionally, Google did not provide its Play Store on other licensable operating systems, restricting competition and further denying market access. OEMs that entered into ACC/AFA agreements with Google were also prohibited from developing their own forked Android-based operating systems, creating barriers to entry and limiting research and development in the market. The Informants further claimed that these agreements imposed supplementary obligations on OEMs unrelated to licensing the Android OS and restricted their freedom of action across their entire device portfolio, not just the devices where Android TV OS or Play Store is pre-installed. Public Version Case No. 19 of 2020 Page 5 of 28 8. The Commission considered the Information, in its ordinary meeting held on 22.07.2020 and decided to seek response from Google in relation to the allegations made in the Information along with details of licensing agreements entered between Google and all smart TV OEMs having business presence in India. The Informants were also allowed to file their rejoinder, if any, to the response filed with an advance copy to Google. Such response from Google as well as rejoinder from the Informants were filed. Directions to the Director General (DG) 9. Based on the material available on record, the Commission, vide its order dated 22.06.2021, formed a prima facie view that Google has contravened various provisions of Section 4 of the Act. This was due to its requirement for device manufacturers to sign the ACC as a prerequisite for pre-installing its proprietary apps, including the Play Store, thereby restricting OEMs from developing or distributing devices that use competing Android versions. Additionally, the ACC’s obligations applied to an OEM’s entire device portfolio, not just Android TV OS devices. The mandatory pre-installation of Google apps under TADA and the leveraging of Play Store dominance to promote other services like YouTube were also cited as anti-competitive practices, as outlined in the order. Accordingly, the Commission directed the DG to cause an investigation to be made under the provisions of Section 26(1) of the Act. The Commission directed the DG to examine the allegations of "refusal to deal" and "exclusive dealing" in terms of the provisions contained in section 3(4) read with Section 3(1) of the Act as well.
