Shoreline International Holdings LLC Combination Approval

COMPETITION COMMISSION OF INDIA

Combination Registration No. C-2024/10/1191

26th November 2024

Notice under Section 6(2) of the Competition Act, 2002 given by Shoreline International Holdings LLC

CORAM:

Ms. Ravneet Kaur Chairperson

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Order under Section 31(1) of the Competition Act, 2002

1. On 3rd October 2024, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by Shoreline International Holdings LLC (Acquirer). The Notice was filed pursuant to execution of following agreements/documents: (i) a Share Subscription Agreement dated 21st May 2024 (SSA) executed by and amongst Google International LLC (Google International) and Flipkart Private Limited (Target); (ii) an Assignment Notice dated 17th July 2024 vide which Google International has assigned all of its rights under the SSA to the Acquirer (Assignment Notice); (iii) Letter to be issued to the Acquirer by the Target pursuant to the SSA (Management Rights Letter); and (iv) Deed of accession to the Target’s Shareholders Agreement (DoA). Further, on 16th May 2024, Flipkart Internet Private Limited (FIPL), a subsidiary of the Target, and Google Cloud India Private Limited (GCIPL), an affiliate of the Acquirer, have executed an addendum (Cloud Addendum) to the Google Cloud Master Agreement. Under the Cloud Addendum, GCIPL has agreed to sell Google Cloud Platform (GCP) services to FIPL (Commercial Partnership).

2. The proposed combination involves: (a) subscription, by the Acquirer, to shares, comprising approximately 0.88% of the fully diluted share capital of the Target in accordance with the SSA. Further, the Acquirer will have certain information rights, as set out in the management rights letter to be issued to the Acquirer by the Target on closing (Proposed Investment) and (b) the Commercial Partnership.

3. In accordance with Regulation 14(2) of the Combination Regulations, vide letter dated 16th October 2024 (RFI 1), certain information and clarifications were sought from the Acquirer. The Acquirer submitted response on 30th October 2024 (Response 1). As the Response 1 was found to be incomplete, information/documents were again sought from the Acquirer vide letter dated 8th November 2024 (RFI 2), response to which was filed on 15th November 2024 (Response 2). The Response 2 was followed by certain additional submissions/clarifications on 19th November 2024.

4. The Acquirer is a subsidiary of Alphabet Inc. (Alphabet), a holding company. As submitted, Google LLC (Google), Alphabet’s indirect subsidiary, owns various products and services that are provided to customers in India which include, internet search, smart mobile device operating system (Android), app store developed for Android (Google Play), cloud services (Google Cloud Platform), video streaming service (YouTube), a third-party app provider, which allows users to transfer funds between two bank accounts (Gpay), advertiser services (Google Ads) etc.

5. The Target is principally an investment holding company, which, along with its direct and indirect subsidiaries (i.e., the Flipkart group), is primarily engaged in the business of wholesale cash and carry of goods and providing marketplace-based e-commerce platforms to facilitate trade between customers and sellers in India.

6. The horizontal overlaps and vertical/complementary linkages between the activities of Google and Flipkart can be classified in two categories for the purpose of competition assessment viz., (i) overlaps/linkages between Google and Flipkart in general and (ii) overlaps/linkages between Google and Flipkart arising from Commercial Partnership.

7. As regards the overlaps/linkages between Google and Flipkart in general, considering the extent of shareholding and nature of rights of Google, the Commission observed that neither party is likely to have any influence over, or insight into the other party’s strategic commercial information or decisions with respect to their business activities and accordingly, the Proposed Combination is not likely to change competition dynamics of any such activity segment.

8. As regards the overlaps/linkages arising from Commercial Partnership, the Commission noted the submissions of the Acquirer as regards: (a) the information expected to be exchanged between the parties under the Cloud Addendum and (b) the manner in which this information will be processed. Based on the submissions, the Commission observed that information exchange between the parties will be limited to the data strictly necessary for Google to be able to provide Flipkart with Google Cloud services and that Google will not use this data for any other Google products or services. Accordingly, the Commercial Partnership is not likely to have any adverse impact on competition in any of the plausibly affected markets.

9. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India in any of the relevant market(s) and therefore, the Commission hereby approves the Proposed Combination under Section 31(1) of the Act.

10. This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

11. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

12. The Secretary is directed to communicate to the Acquirer accordingly.