The National Company Law Appellate Tribunal (NCLAT) on Friday ruled in favor of the Competition Commission of India’s (CCI) order against Google, confirming that the tech giant had misused its dominant position in the Android mobile ecosystem, particularly through its Play Store billing policies. However, the tribunal decided to reduce the financial penalty imposed on Google from ₹936.44 crore to ₹216 crore.

In its verdict, the tribunal specified several directives for Google to comply with:

• Google must allow app developers to use third-party billing services without restrictions.
• The company cannot impose anti-steering provisions that prevent app developers from communicating with users to promote their apps and alternative payment methods.
• Google must not discriminate against other apps that facilitate payments via the Unified Payments Interface (UPI) in India compared to its own UPI service.

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At the same time, NCLAT overturned some of the stricter behavioral remedies originally imposed by the CCI:

• Google is not required to permit third-party app stores within the Play Store.
• The ruling does not mandate the uninstallation of pre-installed apps.
• There are no restrictions on downloading apps from sources outside the Play Store.

Legal experts believe the ruling reinforces fair competition in India’s digital market.

“This decision sends a strong message that dominant digital platforms cannot unilaterally dictate commercial terms that hurt competition and innovation,” said Alay Razvi, Managing Partner of law firm Accord Juris.

Google’s parent company, Alphabet Inc., had initially approached the NCLAT seeking a stay on the CCI’s October 25, 2022, order, which imposed a fine and directed the company to cease anti-competitive practices within the Play Store. However, the tribunal has upheld the essence of the order, ensuring that Google revises its billing policies.

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The Background: Google’s Play Store Policy and the Dispute

The case arose from Google’s Play Store billing system (GPBS), which required app developers to use Google’s own payment processing system for in-app purchases. Google introduced a 30% commission fee on Play Store transactions in 2020, prompting several app developers to file complaints with the CCI. Following an investigation, the CCI ruled against Google’s practices and imposed the hefty ₹936.44 crore fine.

Google later challenged the ruling at the Supreme Court after the NCLAT did not provide interim relief in January 2023. However, the tech giant later withdrew its plea and continued to fight the case at the appellate level.

While Google has successfully reduced its financial liability, the company must now align its policies with India’s competition laws.

“The ruling strengthens the position of app developers, who may now be able to leverage alternative billing mechanisms, potentially reducing their operational costs and fostering a more competitive app marketplace,” said Tushar Kumar, an advocate practicing at the Supreme Court.

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Consumers are also expected to benefit, as increased competition could lead to more pricing flexibility and a wider variety of payment options in mobile apps.

Although Google retains control over its Play Store structure, it must revise its billing policies to avoid regulatory scrutiny in India.

“Google retains its core Play Store structure, avoiding major disruptions like hosting third-party app stores or allowing app uninstalls. However, it must modify its billing practices and pay the penalty of ₹216 crore. While the ruling softens compliance burdens, it confirms regulatory oversight and sets a precedent against misuse of dominance in India,” added Razvi.