Keeping up with Competition - April 2025
A monthly newsletter by Axiom5.
Welcome to the nineteenth edition of our monthly newsletter, Keeping Up With Competition. The month of March 2025 saw significant activity from the Competition Commission of India (CCI) and the National Company Law Appellate Tribunal (NCLAT) with rulings addressing diverse issues across various sectors. These rulings touch upon the following key issues:
Pre-installed Software & Dominance: Under what circumstances does pre-installation of software on a dominant enterprise’s primary product constitute abuse?
Monopoly Allegations in Regulated Sectors: What evidentiary threshold is required to substantiate claims of monopolistic abuse against entities operating within regulated sectors?
State Monopolies and Abuse of Dominance: How does competition law assess potential abuses of dominance by state-controlled monopolies, particularly in cases involving alleged restrictions on market access for competitors and potential discriminatory practices?
Disclosure Requirements for Interconnected Transactions: What scope of "interconnected transactions" necessitate mandatory disclosure to competition authorities?
This newsletter provides summaries of the cases that address the following.
CCI Rejects Abuse of Dominance Claim on Defender: The CCI cleared Microsoft of abuse of dominance claims regarding Microsoft Defender, citing the lack of user compulsion to use it exclusively, the absence of demonstrable harm to competing antivirus vendors, and the failure to establish anti-competitive tying.
CCI Dismisses Monopoly Claims Against Delhi Airport Operators: The CCI dismissed allegations of anti-competitive conduct at the Delhi Airport, emphasizing the lack of concrete evidence to support claims of a monopolistic environment and exorbitant charges while highlighting that aeronautical charges are regulated, non-aeronautical charges are competitively determined, and contractual practices were in line with the Operation, Management and Development Agreement (OMDA).
CCI Upholds Fairness of Swimming Pool Tender: The CCI affirmed that tender conditions, including those specifying certain technologies, are permissible, provided they are objective and do not unfairly exclude competition.
CCI Flags Prima Facie Abuse in State-Controlled Liquor Monopoly: The CCI ordered an investigation into TASMAC’s alleged abuse of dominance in the Tamil Nadu beer market. The CCI held that TASMAC, as the sole distributor of alcoholic beverages in the state, qualifies as an ‘enterprise’ and potentially violated Section 4(2)(c) of the Competition Act, 2002 (Competition Act) by restricting market access for competing beer brands. By relying on a procurement model based on historical sales, TASMAC may be reinforcing the dominance of select brands—raising concerns of favoritism and foreclosure.
CCI Clarifies Scope of Interconnected Transactions and Green Channel Approval in Matrix Pharma Case: The CCI reinforced that all interconnected transactions must be disclosed in a single, consolidated notice, even if executed separately. It also clarified that even minor changes in transaction structure, like ownership layers, can be material if they affect competitive assessment.
NCLAT Clarifies Limits of Competition Enforcement in Digital Markets – Google Play Billing Case: While upholding some findings of the CCI, the NCLAT overturned others, citing no evidence of harm. Crucially, it slashed the penalty from ₹936.44 crore to ₹216.69 crore, applying the Excel Crop Care test to ensure fines are tied to relevant turnover. The ruling underscores proportional penalties, effect-based analysis, and cautions against imposing gatekeeper-style obligations without a clear legal mandate.
The following sections provide a more in-depth look at these developments.
CCI Dismisses Abuse of Dominance Allegations Against Microsoft for Bundling Defender with Windows OS (CCI’s order available here.)
The CCI dismissed a case filed against Microsoft Corporation and its Indian subsidiary (collectively, Microsoft) concerning the pre-installation and default settings of its antivirus software, Microsoft Defender, with the Windows Operating System (Windows OS). The CCI's order concluded that no prima facie case of contravention of Section 4 of the Competition Act was established.
An anonymous informant approached the CCI claiming that Microsoft was engaging in anti-competitive practices by:
Excluding competing antivirus software vendors by pre-installing and setting Microsoft Defender as the default, pre-activated antivirus app in Windows OS.
Hindering development and market access by tying and bundling Microsoft Defender with Windows OS.
Making Microsoft Virus Initiative (MVI) membership compulsory for access to Microsoft Store on Windows OS.
Leveraging dominance in the desktop OS market to protect its position in the antivirus software market in India.
The informant argued that this bundling disadvantaged third-party antivirus developers by restricting their functionality (lack of default status hindering real-time protection and background scans), creating hurdles for entry (limited access through Microsoft Store, complex sideloading, and OEM agreements not allowing pre-activation), and limiting access to crucial OS features. The informant also raised concerns about the MVI program, alleging it forced developers to share sensitive information exploited by Microsoft.
CCI's Review: Does the Pre-installation of Microsoft Defender Constitute Abuse of Dominance?
The CCI considered the informant's allegations and Microsoft's responses and made the following key observations:
Relevant Market definition: The CCI defined the relevant markets as the 'market for Licensable Operating Systems (OSs) for desktops/laptops in India' and the 'market for desktop/laptop security (antivirus) software for Windows OS in India'. The CCI rejected Microsoft's broader market definition that included OS for all devices, aligning with its previous stance in XYZ (Confidential) and Others Vs. Alphabet Inc. and Others, that desktop and mobile OS constitute separate relevant markets. It also distinguished between licensable (e.g., Windows, Linux) and non-licensable (e.g., macOS) desktop OS.
Dominance in the tying product market: While assessing Microsoft's dominance, CCI considered not just its 70% average market share in the licensable OS market for desktops/laptops in India, but also the heavy reliance of major PC manufacturers—collectively holding 85% market share—on Windows OS. Despite Microsoft’s argument regarding broader OS market figures that included smartphones and tablets, the CCI focused on the narrower relevant market. It also noted Microsoft’s extensive vertical integration across the technology value chain—covering operating systems, productivity software, hardware, and cloud services—which, according to the CCI, amplified its market power and reinforced consumer dependence, leading to a prima facie finding of dominance.
Forced exclusive use of Defender: The CCI found no evidence of compulsion or imposition on users to exclusively use Microsoft Defender. Users are free to install and use third-party antivirus software, which could either run in parallel with Microsoft Defender or, if registered through the MVI program, automatically disable Defender's real-time protection. OEMs were also allowed to pre-install third-party antivirus software.
Hindering development and market access: The CCI noted the lack of evidence suggesting any actual or potential hindrance to technical advancements. The presence of numerous competing antivirus developers who continuously innovate indicates that Microsoft's inclusion of Defender has not stifled progress. Microsoft also clarified that it does not extract technologically privileged information from other antivirus programs.
Tying and bundling of defender with Windows: While assessing the allegations of tying and bundling, the CCI referred to the criteria laid down in its earlier decision in Harshita Chawla vs WhatsApp for assessing anti-competitive tying and noted that four conditions must be satisfied to establish tying: (i) the existence of two separate products; (ii) dominance in the tying product market; (iii) lack of consumer choice in obtaining the tying product without the tied product, and (iv) the tying practice's potential to restrict or foreclose competition in the tied product market. Applying these principles to the present case, the CCI found that the first two conditions were prima facie met—Microsoft Defender and Windows OS were considered separate products, and Microsoft was found dominant in the market for licensable OS for desktops/laptops in India. However, the third condition was not satisfied, as users were not compelled to use Microsoft Defender and retained the freedom to install third-party antivirus software, with many such products also pre-installed by OEMs. In relation to the fourth condition, the CCI noted that the antivirus market remained competitive, with several established cybersecurity firms actively operating despite the presence of Microsoft Defender. Consequently, the CCI concluded that the allegation of anti-competitive tying was not made out.
Leveraging Windows dominance to favour Defender: The CCI found no indication of any active restriction or conditionality imposed by Microsoft that forces users to utilize Microsoft Defender. The freedom for consumers to choose and install third-party antivirus software negates the claim of leveraging dominance to protect its position in the antivirus market.
Microsoft's alleged restriction of market access through mandatory MVI Membership: The CCI determined that Microsoft did not mandate MVI membership for antivirus distribution on Windows, as developers could use the Microsoft Store or direct downloads. Non-MVI apps coexisted with Defender. The MVI program was considered a voluntary tool for better security and compatibility with clear criteria. The CCI also acknowledged the global impact of Microsoft's settlement with Kaspersky Lab in previous antitrust complaints with Russia's Federal Antimonopoly Service and in 2017 with the European Commission and the German Federal Cartel Office, leading to changes in Windows that are also implemented in India.
Conclusion: No prima facie case
The CCI ultimately found no prima facie case of abuse of dominance by Microsoft in relation to the bundling of Microsoft Defender with its Windows OS. Through this order, the CCI has demonstrated a balanced approach in dealing with allegations of abuse of dominance in the digital ecosystem. By assessing both the market dynamics and the technical functioning of Microsoft Defender within the Windows OS, the CCI acknowledged the legitimate discretion that technology companies must exercise to ensure the security and integrity of their platforms. The CCI found no evidence of compulsion, coercion, or market foreclosure, reaffirming that users and OEMs retain the freedom to choose and install third-party antivirus solutions, thereby preserving consumer choice and maintaining competitive neutrality.
This aligns with Baglekar Akash Kumar v. Google, where the CCI held that the integration of Google Meet with Gmail did not amount to leveraging or abuse of dominance. The CCI emphasized that users were not coerced into using Google Meet, nor were there any adverse consequences for opting for competing services. In both cases—Google’s integration of communication tools and Microsoft’s bundling of Defender with Windows—the CCI highlighted the absence of compulsion, coercion, or market foreclosure. It recognized that users retain the autonomy to choose alternative solutions. Moreover, the order also reflects the CCI’s recognition of the impact of global regulatory developments—such as Microsoft’s settlements with competition authorities in Europe and Russia—on substantive product changes that extend to the Indian market. This underscores the ripple effect of international enforcement in promoting fair competition domestically, while allowing digital entities to responsibly innovate and safeguard their ecosystems.
CCI Dismisses Allegations of Monopoly and Abuse of Dominance at Delhi Airport (CCI’s order available here.)
The CCI dismissed a case involving allegations of anti-competitive conduct at Indira Gandhi International (IGI) Airport in Delhi. The case, filed by Fight Against Corruption and Contractor Council of India (collectively, Informants), raised concerns about the conduct of Airports Authority of India (AAI/OP-1), Ministry of Civil Aviation (MoCA/OP-2), Delhi International Airport Limited (DIAL/OP-3), GMR Airports Limited (GMR/OP-4), and Fraport AG Frankfurt Airport Services Worldwide (Frapport AG/OP-5).
The Informants alleged that GMR was enabling the imposition of exorbitant charges on airlines and passengers. They further claimed that GMR limited service provision by ousting other contractors in favor of its own companies and selectively awarded contracts to these entities through manipulated tender conditions and circumvention of competitive bidding, including a 13% fee on all tenders, particularly Annual Maintenance Contracts. Finally, the Informants asserted that GMR leveraged its dominant position in the upstream market to restrict services in the downstream market.
Key findings on GMR's Conduct and Alleged Monopolistic Practices:
The CCI examined the allegations and the responses from the involved parties, making the following key observations:
On alleged monopolistic environment: The CCI found no evidence to support claims that GMR imposed unfair or excessive charges, noting that aeronautical fees are regulated by the Airports Economic Regulatory Authority and non-aeronautical charges are market-based. It emphasized that speculative or future abuses do not fall under Section 4 of the Act, concluding that the allegations lacked substantiation and did not amount to a violation.
Limiting the provision of services: The CCI found that DIAL was contractually permitted to engage third parties for airport services and had followed competitive bidding processes for awarding contracts. It noted that entities like Delhi Airport Parking Services Private Limited (DAPSL) and Encalm secured service contracts transparently, with no evidence of favoritism or undue influence. The CCI concluded that the allegations of selective contract awards and service limitations were unsubstantiated.
Imposition of 13% fee on tenders: The CCI accepted that the 13% fee was a continuation of a pre-existing Airports Authority of India structure, uniformly applied to all service providers. It also noted that similar fees are charged at other airports, public or private, and found no evidence of discrimination or anti-competitive intent by OP-4.
Conclusion: No Prima Facie Case
The CCI concluded that the allegations made by the informants were unsubstantiated and did not establish a prima facie case of contravention of Section 4 of the Competition Act. The CCI found that the actions taken by DIAL were in line with the provisions of the OMDA and that the tendering processes were competitive. Consequently, the CCI ordered the case to be closed.
CCI Clears Maharashtra Swimming Pool Tender of Anti-Competitive Allegations, Emphasizes Fairness in Public Procurement Practices (CCI’s order available here.)
The CCI dismissed allegations of anti-competitive conduct in a tender floated by the Public Works Division (PWD), Akola (OP-3), for constructing an Olympic-standard swimming pool. The case, filed by Mr. Vinish Khanna (Informant), alleged that the tender unfairly favored A&T Europe SpA (OP-1) and its Indian subsidiary Myrtha Pools India Pvt. Ltd. (OP-2), violating Sections 3 and 4 of the Competition Act.
The Informant, a director at Renaissance Aqua Sports Pvt. Ltd., alleged that OP-3 imposed restrictive tender conditions by requiring all bidders to sign an MoU with OP-1, effectively excluding other competitors. He claimed this created an anti-competitive arrangement, granting OP-1 a de facto monopoly, leading to cost inflation of up to 400%. He further alleged that OP-3 abused its dominant position by structuring the tender to unfairly favor OP-1, limiting market access for other technology providers.
CCI's Review of Tender Process for Swimming Pools
The CCI held that OP-3, though a government department division, qualified as an ‘enterprise’ under Section 2(h) of the Competition Act, relying on precedent that public procurement constitutes market interfacing. For assessing abuse of dominance, it defined the relevant market as the “market for procurement of services for construction of swimming pools in India”, given the specialized nature of the work and national participation of bidders.
The CCI assessed the allegation of OP-3's dominance, noting that neither the Informant nor OP-3 provided substantial details despite being given the opportunity to do so. The CCI reasoned that since every State's PWD may float tenders for swimming pool construction based on varying needs across districts, cities, or areas, and considering that other entities like hotels and clubs also procure these services, OP-3, a district PWD, is not the sole procurer in the market. Therefore, the CCI concluded that OP-3 did not appear to hold a dominant position in the relevant market, precluding the need to further examine any potential abuse of such dominance. It also found no anti-competitive agreement, accepting OP-3’s rationale for selecting pre-engineered stainless steel pool technology based on durability and standards. The tender permitted similar technologies, and the Informant’s disqualification was due to technical shortcomings, not the MoU requirement. Importantly, the CCI found no evidence of collusion between OP-1 and OP-3.
Conclusion
The CCI concluded that there was no contravention of either Section 4 (abuse of dominance) or Section 3 (anti-competitive agreement) of the Competition Act. The CCI reasoned that OP-3 did not hold a dominant position in the relevant market and that the tender conditions were justifiable and did not entirely foreclose competition. The ruling underscores that while specifying technology is acceptable, tender criteria must not unfairly exclude competitors.
CCI Orders Investigation into Alleged Anti-Competitive Practices by TASMAC in Tamil Nadu Beer Market (CCI’s order available here.)
The CCI ordered an investigation into alleged anti-competitive practices by the Tamil Nadu State Marketing Corporation Limited (TASMAC). The case, filed by Chakra R Prabakaran (Informant), raises concerns about TASMAC's conduct in the procurement, marketing, distribution, and sale of beer in Tamil Nadu, potentially violating Section 4 of the Competition Act.
The Informant alleged that TASMAC, a state government-owned company with exclusive rights to sell alcoholic products in Tamil Nadu, favoured specific beer brands. The Informant alleged that TASMAC's practices limited the availability of other beer brands, reducing consumer choice and impeding market competitiveness, and TASMAC promoted and sold only a select few beer brands, such as "SNJ 10000" and "British Empire," produced by particular distilleries. Additionally, they claimed that TASMAC colluded with SNJ Breweries and a few other breweries to exclusively purchase their beer brands, denying other brands access to consumers through TASMAC's extensive retail network. Despite the availability of numerous beer brands in the market, they alleged that TASMAC outlets offered only a limited selection, raising concerns about monopolistic control.
CCI's Assessment: TASMAC's Monopoly and Brand Availability Discrepancies:
TASMAC as an 'enterprise’: The CCI first had to establish whether TASMAC qualifies as an 'enterprise' under Section 2(h) of the Competition Act. Section 2(h) defines an 'enterprise' as an entity engaged in any economic activity relating to the production, storage, supply, distribution, acquisition or control of goods or the provision of services. The CCI observed that TASMAC is involved in the distribution and sale of alcoholic beverages in Tamil Nadu, which constitutes an economic activity, thus classifying it as an 'enterprise' under the Act
Relevant Market and dominance of TASMAC: The CCI noted that beer has distinct product characteristics compared to other forms of liquor, such as hard liquor. Considering the regulations governing the production and sale of liquor in India, which fall under the State List of the Constitution, each state can be considered a distinct geographic market. Therefore, the CCI defined the relevant market as "procurement, marketing, distribution and sale of beer in the state of Tamil Nadu". The CCI then assessed TASMAC's position in the relevant market. Given TASMAC's exclusive privilege in the wholesale supply of Indian Made Foreign Liquor (IMFL) in Tamil Nadu, the CCI concluded that TASMAC holds a monopolistic position.
Discrepancies in brand availability: The CCI's preliminary observations indicated that TASMAC's official price list showed a limited selection of well-known beer brands, with a significant share of procurement concentrated among a few manufacturers. Data furnished by TASMAC showed that the share of brands from Kals Breweries Pvt. Ltd. and SNJ Breweries Pvt. Ltd. was significantly higher compared to other brands.
TASMAC's procurement method: The CCI observed a potential flaw in TASMAC's weighted average sales calculation for procurement, noting its heavy reliance on the past three months' and the immediate past month's sales data. Critically, the CCI highlighted that this formula fails to factor in current demand for specific brands at retail stores. Consequently, the CCI concluded that this methodology inherently favors brands with higher past sales and inventory, effectively perpetuating their status quo and potentially hindering the procurement of other brands, despite TASMAC's claim of impartiality.
Conclusion: Prima Facie Case of Abuse of Dominance
The CCI concluded that there is a prima facie case indicating that TASMAC appears to be abusing its dominant position by limiting market access to certain beer brands in Tamil Nadu, in contravention of Section 4(2)(c) of the Competition Act. The CCI directed the Director General (DG) to conduct a detailed investigation into the matter and submit a report within 60 days. This investigation aims to thoroughly examine the allegations and provide a comprehensive understanding of TASMAC's practices and their impact on competition.
CCI Addresses Interconnected Transactions and Green Channel Approvals: Insights from Matrix Pharma Gun-Jumping Case (CCI’s order available here.)
In a recent order, the CCI addressed key concerns around interconnected transactions in M&A filings. The case relates to Matrix Pharma Private Limited (Matrix Pharma/Acquirer) acquiring Tianish Laboratories Private Limited (Tianish Laboratories/Target), initially notified to the CCI on 23 January 2024 (Original Notice). The acquisition was funded by Kotak Strategic Situations India Fund II (KSSIF/Investor 1) and Kotak Alternate Asset Managers Limited (KAAML/Investor 2), collectively referred to as the Investors, and was approved by the CCI on 13 February 2024.
However, the transaction structure later went through a change to secure alternate funding. This involved investments from Mudhra Lifesciences Private Limited and Mudhra Pharmacorp LLP into Mudhra Labs Private Limited, which in turn invested in Matrix Pharma — a structure referred to as the Acquirer Funding. Additionally, Kingsman Wealth Fund PCC – Aurisse Special Opportunities Fund (Kingsman) invested in Mudhra Lifesciences (Kingsman Funding). These changes, occurring between 1 March and 16 April 2024, led to another notice filed on 23 April 2024 (Revised Notice).
The Revised Notice identified Matrix Pharma, the Acquirer Holding Entities (Mudhra Lifesciences, Mudhra Pharmacorp, and Mudhra Labs), the Investors, and Kingsman as notifying parties. The CCI observed that several funding steps, including contributions by Pranav (the ultimate beneficial owner of Matrix Pharma and the Acquirer Holding Entities), were completed prior to notifying the revised structure. Given their interconnected nature and necessity for the combination, these steps ought to have been filed in a single notice.
Consequently, the CCI issued a show cause notice for contravening Sections 6(2) and 6(2A) of the Competition Act. While the Acquirers argued that the restructuring was commercially driven and that control remained unchanged, the CCI deemed the changes material and imposed a penalty for partial pre-consummation of the restructured transaction.
CCI’s Observations: When Do Structural Changes in an Approved Combination Mandate a Fresh CCI Notification?
Interconnected transactions: The CCI emphasized the importance of assessing interconnected transactions holistically. In this case, the Acquirer Funding (investments by Mudhra Lifesciences and Mudhra Pharmacorp in Mudhra Labs and by Mudhra Labs in the Acquirer) and the Kingsman Funding (investment by Kingsman in Mudhra Lifesciences) were deemed interconnected with the Proposed Acquisition. The CCI observed that these transactions were necessary for the Acquirer to complete the acquisition in the Revised Notice, making them integral parts of the overall combination.
Material changes in transaction structure require fresh notification: The CCI held that once it approves a combination, any subsequent structural changes—such as introduction of new holding entities, changes in funding routes, or additions to the ownership chain—must be separately notified. In this case, the introduction of entities like Mudhra Labs, Mudhra Lifesciences, and Mudhra Pharmacorp constituted a material deviation from the originally approved structure and required a revised filing. Even though Pranav continued as the person exercising control, the ownership interest in the Acquirer was no longer restricted to Mr. Venkata Pranav Reddy (Pranav) and Mrs. Swati Reddy Gunupati (Swati) (Pranav’s wife), as originally notified. New parties such as Kingsman, Govipri Infra LLP, and Sujatha Ravuri acquired ownership interests. The CCI held that since the entities holding ownership interest in the Acquirer had changed from those disclosed in the Original Notice, the transaction structure had materially deviated from what was originally approved. The Acquirer Funding, Kingsman’s investment, and capital contributions to Mudhra Pharmacorp were all steps interconnected with the combination.
Green Channel approval: While the CCI found the Acquirer Funding to be gun-jumping, it viewed the Kingsman Funding differently. Since Kingsman had filed a separate notice under the green channel and completed the transaction only after receiving deemed approval, the CCI did not consider it a violation. However, it reiterated that a single notice should have been filed covering all inter-connected transactions.
Absence of market overlap does not waive notification requirement: The Acquirers highlighted that the revised structure did not create any additional overlaps. However, the CCI reaffirmed that the absence of overlaps is irrelevant when it comes to the procedural requirement to notify a combination. Even if the competitive assessment remains unchanged, material structural modifications to the transaction must be notified afresh.
Mitigating factors: The CCI acknowledged several mitigating factors. The parties had shown no intention to conceal material facts, and the changes in the transaction structure occurred after the initial approval. The Acquirer Holding Entities and Kingsman had transparently disclosed the status of their funding arrangements. The parties cooperated with the CCI and provided all necessary information. In light of these circumstances, the CCI imposed a nominal penalty of INR 5,00,000, signalling a balanced enforcement approach that values both compliance and transparency.
Conclusion: Material change in transaction structure must be notified
The CCI’s order serves as a crucial precedent for assessing interconnected transactions under India’s merger control regime. The order makes it clear that when multiple steps—such as funding arrangements, changes in ownership layers, or capital contributions—are part of a single overarching transaction, they must be notified together in one comprehensive filing. The fact that control remains unchanged does not excuse parties from filing again if there are material changes in ownership composition. New investors or entities acquiring beneficial ownership, even indirectly, may impact the competition assessment and therefore trigger the need for a fresh notification. Pre-consummation of such interconnected steps, even partially, amounts to gun-jumping and violates Sections 6(2) and 6(2A) of the Competition Act.
An important observation from the order is that although the CCI acknowledged the interconnected nature of the various steps, including the Kingsman Funding, it did not treat the Kingsman investment—made through the green channel and consummated post deemed approval—as an instance of gun-jumping. This highlights the significance of Kingsman's procedural compliance and timely notification under the green channel, underscoring the value of independent competition law due diligence even where transactions appear linked.
Notably, the CCI’s imposition of a modest penalty while considering the parties’ transparency and cooperation, reflects a balanced enforcement approach—one that upholds procedural rigour while recognizing good faith conduct. For future transactions, this order reinforces the importance of early competition law assessment and consolidated, timely filings where multiple elements of a combination are involved.
NCLAT Partially Upholds CCI’s Ruling Against Google, Offering Relief on Penalties and Certain Anti-Competitive Findings (NCLAT’s order available here.)
The NCLAT recently issued a judgment in Alphabet Inc. (Google) vs. CCI, partially upholding the CCI’s findings of anti-competitive conduct by Google in the Indian digital market. The case, which stemmed from allegations of abuse of dominance in Google Play’s billing policies (GBPS) and preferential treatment of its own apps in XYZ vs. Alphabet Inc. and Others, has far-reaching implications for competition law enforcement in India’s rapidly evolving digital ecosystem. Following complaints alleging abuse of dominance in the Android app market, the CCI investigated Google's practices, including mandatory use of GPBS with high commissions, discrimination against rival UPI payment apps, and leveraging OS and app store dominance in downstream markets. The DG's investigation led the CCI to find Google in violation of several sections of the Competition Act, resulting in a penalty of ₹936.44 crores, a decision Google subsequently appealed to the NCLAT.
NCLAT’s findings in partially upholding CCI’s order
Relevant Market definition: Google contested the CCI's definition of the relevant market as "market for apps facilitating payment through UPI in India," advocating for a broader scope encompassing all digital payment methods. However, the NCLAT upheld the CCI's narrower definition, recognizing the unique features of UPI-enabled payment apps that make them non-substitutable with other digital payment modes. The NCLAT also cited the Supreme Court's ruling in CCI vs. Bharti Airtel Ltd. & Ors. (2019), underscoring that market definition aims to identify the competitive constraints faced by businesses.
Effects-based analysis: Google argued that it should entail only proof of actual harm to competition. The NCLAT, however, following its own precedent in Google LLC & Anr. vs. CCI and Ors., along with EU and Singaporean case law, determined that it encompasses both actual harm and conduct capable of restricting competition. This implies that the CCI doesn't have to wait for actual harm to occur before intervening. The NCLAT clarified that this analysis pertains to conduct that has already occurred, not hypothetical future conduct. They also referenced the judgments in Tomra Systems ASA v. Commission, Post Danmark A/S vs. Konkurrenceradet, and Intel vs. Commission to solidify their interpretation of effects analysis.
Mandatory GPBS and Section 4(2)(a)(i) Violation (Upheld): The NCLAT agreed with the CCI that mandating app developers to use GPBS for paid apps and in-app purchases constituted an "imposition of unfair condition on app developers." This was because it restricted developers' freedom to choose alternative payment processors and potentially impacted users who preferred other payment methods. The NCLAT found that requiring all developers to use GPBS and conditioning user payments solely through GPBS was inherently unfair and limited choice, and reinforced Google's control over payment processing within its app store ecosystem.
Leveraging and Section 4(2)(e) Violation (Upheld): The NCLAT also upheld the CCI's finding that Google leveraged its dominance in the licensable mobile OS and app store markets to protect its position in the downstream UPI payments market. This leveraging occurred through the imposition of different integration methods (collect flow versus intent flow) for Google Pay compared to rival UPI apps, giving Google Pay a competitive advantage. The mandatory use of GPBS further reinforced this leveraging by channeling payments through a Google-controlled system, thereby benefiting Google Pay.
Discriminatory Pricing (Section 4(2)(a)(ii)) (Overturned): The CCI initially found Google guilty of discriminatory pricing by not applying GPBS requirements to YouTube, leading to a lower service fee for YouTube compared to other apps. However, the NCLAT overturned this finding. They argued that the comparison wasn't valid because YouTube is Google's own app, and the revenue generated from it is Google's own revenue, not subject to the same fee structure as third-party developers.
Limiting Technical Development (Section 4(2)(b)(ii)) (Overturned): The NCLAT also overturned the CCI's finding that Google limited technical development. They highlighted that the evidence on record showed growth in the UPI payments market and that Google Play's share of UPI transactions was minimal. Therefore, the mandatory GPBS requirement could not be deemed to have hindered technical development in the broader market. Essentially, they focused on the overall market trend rather than the potential impact within the specific Google Play ecosystem.
Denial of Market Access (Section 4(2)(c)) (Overturned): Finally, the NCLAT overturned the CCI's finding of denial of market access. They emphasized that Google's share in the UPI payments market was negligible and that other payment processors continued to operate and grow. They saw Google as a buyer of payment processing services, thus facilitating market access rather than denying it. Again, they looked at the broader market dynamics and saw no evidence of substantial foreclosure or exclusion.
Rejection of Ex-Ante Regulation: The NCLAT firmly reiterated that India’s competition regime, as structured under the Competition Act, is rooted in ex-post enforcement, and any shift towards ex-ante regulation—particularly for digital "gatekeepers" like Google—requires express legislative mandate. While the CCI's original order hinted at a proactive, rule-setting approach akin to the EU’s Digital Markets Act, the NCLAT cautioned against overreach, emphasizing that directions under Section 27 must be grounded in a proven abuse of dominance. By rejecting gatekeeper-based obligations without statutory backing, the tribunal underscored the need for regulatory certainty, reaffirming that systemic changes in digital market regulation must flow through formal legislative reform.
Penalty Calculation: The NCLAT modified the penalty imposed by the CCI on Google, ruling that it must be proportionate and based on "relevant turnover" rather than Google’s total India revenue. Citing the Supreme Court’s Excel Crop Care Ltd. vs. Competition Commission of India & Anr., judgment, the tribunal held that penalties under Section 27(b) should reflect the turnover specifically linked to the infringing conduct. Accordingly, it recalculated the fine at 7% of revenue from Google Play services—including app commissions and advertising earnings—resulting in a 75% reduction of the penalty from ₹936.44 crore to ₹216.69 crore.
Conclusion
The NCLAT’s ruling in this order sets an important precedent in India’s competition law landscape, particularly for digital markets. It reaffirms that dominant digital platforms must not impose unilateral, restrictive conditions that hinder competition or leverage their market position across interconnected services. By upholding the CCI’s findings on unfair imposition and leveraging, the tribunal reinforces the principle that effects-based analysis under Indian competition law includes not only actual harm but also conduct that is capable of distorting competitive conditions. Simultaneously, the NCLAT provided critical clarity on the limits of such enforcement—by overturning findings on discriminatory pricing, innovation, and market access where it found insufficient evidence of harm or foreclosure.
Importantly, the tribunal’s recalibration of the penalty, guided by the Supreme Court’s Excel Crop Care decision, emphasizes proportionality and economic relevance in antitrust penalties. By anchoring fines to “relevant turnover,” the NCLAT underscored the need for a nuanced approach that balances deterrence with fairness, especially in complex, multi-layered digital ecosystems. This judgment will likely serve as a benchmark for future cases involving platform conduct, market leveraging, and penalty computation in India’s evolving digital competition jurisprudence.