By Arpan Chaturvedi, Aditya Kalra and Munsif Vengattil
NEW DELHI (Reuters) -India’s Supreme Court on Thursday declined Google’s request to block an antitrust order that asked it to change how it markets its Android platform, in a major setback for the U.S. firm that has warned it will be forced to change its model in a key growth market.
The Competition Commission of India (CCI) fined Google, which is owned by Alphabet Inc, $161 million in October for exploiting its dominant position in Android, which powers 97% of smartphones in India, and asked it to change restrictions imposed on smartphone makers related to pre-installing apps.
Google challenged the directive in the Supreme Court saying it would hurt consumers and its business, warning the growth of the Android ecosystem could stall, and force it to alter its existing arrangements with more than 1,100 device manufacturers and thousands of app developers. It has also said “no other jurisdiction has ever asked for such far-reaching changes”.
A Supreme Court’s three-judge bench, which included India’s chief justice, delayed the Jan. 19 implementation date for the CCI’s directives by one week but declined to block the ruling despite Google’s repeated requests.
“We are not inclined to interfere,” Chief Justice D.Y Chandrachud said.
During the hearing, Chandrachud told Google: “Look at the kind of authority which you wield in terms of dominance.”
India’s top court asked a lower tribunal, which is already hearing the matter, to decide on Google’s challenge by March 31.
Google did not respond to a request for comment.
Google licenses its Android system to smartphone makers, but critics say it imposes restrictions such as mandatory pre-installation of its own apps that are anti-competitive. The company argues such agreements help keep Android free.
Faisal Kawoosa, founder of Indian research firm Techarc, said the Supreme Court ruling means Google may have to consider other business models in India, such as charging an upfront fee to startups to provide access to the Android platform and its Play Store.
“At the end of the day, Google is for profit and has to look at measures that make it sustainable and power growth for its innovations,” he said.
The CCI has ordered Google that the licensing of its Play Store “shall not be linked with the requirement of pre-installing” Google search services, the Chrome browser, YouTube or any other Google applications.
It also ordered Google to allow the uninstalling of its apps by Android phone users in India. Currently, apps such as Google Maps or YouTube can not be deleted from Android phones when they come pre-installed.
Google has been concerned about India’s decision as the steps are seen as more sweeping than those imposed in the European Commission’s 2018 ruling, when Google was fined for putting in place what the Commission called unlawful restrictions on Android mobile device makers. Google has challenged the record $4.3 billion fine in that case.
In Europe, Google had made changes including letting Android device users pick their default search engine from a list of providers.
Google had also argued in its legal filings, seen by Reuters, that CCI’s investigation unit “copy-pasted extensively from a European Commission decision, deploying evidence from Europe that was not examined in India”.
N. Venkataraman, a government lawyer representing the CCI, told the top court: “We have not cut, copy and pasted.”
(Reporting by Aditya Kalra, Arpan Chaturvedi and Munsif Vengattil; editing by Jason Neely and Vin Shahrestani)
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