[Harsh Patidar is a 3rd year B.A.LL.B. (Hons.) student and Monish Raghuwanshi a 2nd year B.A.LL.B. (Hons.) student, both at National Law Institute University, Bhopal]
Section 4 of the Competition Act, 2002 prohibits one or more enterprises from abusing its dominant position in the market to determine the price, supply, amount of production and distribution, by acting independently of their competitors and customers. An enterprise is deemed to be in a dominant position if it has the ability to behave independently of its competitors, which affects its competitors, customers, or the relevant market. Section 4(2)(e) prohibits the use of a dominant position in one relevant market to enter into, or protect, another relevant market. This requires the existence of two markets, one in which the enterprise has a dominant position and the other in which it intends to enter or protect its position. However, both the markets must be relevant markets distinct from each other. (See S.M Dugar, Guide to Competition Law (7th ed. Lexis Nexis 2017).
On 29 January 2021, a three-judge bench of Competition Commission of India (“CCI”) in Baglekar Akash Kumar v. Google LLC ruled that the integration of video conferencing app ‘Google Meet’ with the Google Mail (G-Mail) is not an abuse of dominant position. The informant filed the information alleging a contravention of section 4(2)(e), using a dominant position in one relevant market to enter into ‘other relevant market’, against Google LLC and Google India Digital Services Private Limited (‘Google Digital Services’). This post deals with the analysis of the observations of the CCI in the present matter and sheds light on the provision relating to abuse of dominant position in the Competition Act, 2002. The authors have also undertaken a comparative study of abuse of dominant position in the competition law of European Union and that of the USA with the intricacies involved in the said provision with respect to the ‘case by case approach’ of the Indian courts, and have sought to ascertain its plausible solution.
Google Digital Services is a subsidiary of Google LLC. The informant alleged that the G-Mail enjoys ‘dominant position’ in the ‘e-mailing and direct messaging market’ as it is in-built in almost every mobile phone and laptop. The informant stated that Google holds a dominant position in the ‘internet-related services and products’, and that the integration of the video conferencing app Google Meet with G-Mail amounts to Google’s use of ‘dominant position’ in one market to enter into another relevant market. This is in contravention of the provision of section 4(2)(e) of the Competition Act. The CCI passed an order seeking a response on the allegations from the Opposite Parties in the present matter.
The issue at hand before the CCI was to determine whether the Google is a dominant player in the internet-related services and products and whether the integration of Google-Meet with G-Mail is an abuse of dominant position by Google, viz., use of its dominant position in one relevant market (dominant in relevant markets for “internet-related services and products”) to enter into other relevant market according to section 4(2)(e). Another task before the CCI was to decide on the locus standi of the Informant, and whether any member of the public can bring any information of anti-competitive behaviour under the provisions of the Act.
After perusing the rival contentions of the parties, the CCI held that there is no violation by Google of the provisions of section 4 of the Competition Act. It observed and concluded that both the relevant markets are not apt for scrutinizing the contentions and allegations in the present lis between the parties. Therefore, Google cannot be incriminated for use of its dominant position.
Analysis of the Ruling
In the present case, the CCI set aside the complainant filed by the informant alleging abuse of dominant position by Google by incorporating Google Meet App into its Gmail App. Notably, the CCI succinctly concluded that, although the feature of Meet has been added to the Gmail app, this does not force or require users to use the same app for meeting. The users have the choice to use the Meet app at their own volition and free will to the extent that users can use either use the Meet app of Google or any other app of some other entity for video conferencing. Thus, there is no foreclosure of rivals in the market. Further, in order to reinforce its decision, the CCI emphatically observed: ‘For creating a Google account, the user need not be a user of Gmail. He/she can use an email ID created on any other platform for creating a Google account. Thus, Google Meet is available as an independent app outside the Gmail ecosystem also. Consumers are free to choose from an array of video-conferencing Apps such as Zoom, Skype, Cisco Webex, We Conference, Microsoft Teams and Google Meet would be competing with the likes of such Apps for providing services.’ This line of reasoning assisted the CCI in holding that the conduct of Google does not infringe the provisions of section 4(2)(e) of the Act.
Nature of Proceedings before the CCI
While dealing with the issue of the locus of a stranger to initiate the proceedings ascribable to anti-competitive behaviour, the CCI placed reliance upon the judgement passed by the Supreme Court of India in Samir Agrawal v. Competition Commission of India, in which the Court held: “when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate
authority, i.e., the NCLAT, must be kept wide open in public interest, so as to
subserve the high public purpose of the Act.” Thus, the CCI rejected the contention of Google questioning the locus of the Informant by holding that the contention of the Opposite Party is devoid of any merit. It bears no consideration that proceedings before the CCI are inquisitorial and in rem in nature, and that any stranger can bring any anti-competitive behaviour to the notice of the CCI by filing an Information under the provisions of the Act.
Plugging the Loophole: The Inadequacy of Section 4 in THE Indian Context
In Indian jurisprudence, the anti-competitive behaviour in lieu of abuse of dominant position is governed by section 4 of the Competition Act of India, 2002. Section 4 prohibits the abuse of a’ dominant position’, but it does not prohibit “dominance per se”. In layperson’s language, the dominance per se simply means that any enterprise has the right to hold a dominating position in the market, even by means of involving in anti-competitive conduct. This fallacy impels one to make a brief reference to section 2 of the Sherman Act of the United States which prohibits both “monopolisation” and an “attempt to monopolise” markets. Thus, in the Indian context, dominance per se is permissible, but the abuse of a dominant position is untenable.
Further, certain practices like ‘imposition of discriminatory condition’, ‘limits or restricts’ and, ‘conclusion of contracts’ are as mentioned under clauses (a), (b) and, (d) of section 4 respectively. All these practices are identical in nature to article 82 of European Competition Treaty (‘EC’). To this, there exist various differences. Unlike the penalisation of anti-competitive agreements, section 4 of the Competition Act does not demand proof of an “appreciable adverse effect on competition” (AAEC), which is governed under section 3(1) of the Act. A priori, section 4 does not ask for proof of an AAEC, other than for behaviour which can be traced within section 4(2)(c) or (e). This may result in divergence with European laws. For example, article 82(2)(c) of the EC expressly requires that discriminatory prices give birth to an anti-competitive effect in the form of competitive prejudice caused to other trading enterprises. In absence of such a requirement, section 4 of the Act risks condemning gentle types of price discrimination as per se abusive. Additionally, section 4 of the Act covers an explicit ‘meeting competition’ defence for both discriminatory and predatory prices. This varies from the condition under EC law, which has not accepted such a defence for predatory pricing as observed in France Telecom v. Commission.
In the light of above discussions, it is concluded that there is a need to prohibit ‘dominance’ per se under Indian competition law as tech giants such as Google and Facebook are in a position to dominate the whole internet related market. The Competition Act should be brought in line with competition laws in the EU and United States to remove the considerable areas of the uncertainty and ambiguity in the current legislation.
– Harsh Patidar & Monish Raghuwanshi