Case Comment: Baglekar Akash Kumar v. Google LLC and Another (2021) | Abuse of the Dominant Position

The pandemic of 2020 posed a crisis for some and an opportunity to develop and upgrade for many. Google LLC belonged to the latter category. The virtual platforms gained a commanding position for communication. Video conferencing became more popular and was widely used by people. Thus, Google came up with an innovative design wherein it integrated Gmail with Meet App by incorporating the Meet Tab in Gmail.

The case, Baglekar Akash Kumar v. Google LLC and Another,[1] deals with the question of whether such integration was an abuse of the dominant position enjoyed by Google and, thereby whether it was an anti-competitive measure prohibited by the Competition Act, 2002.

Citation: 2021 SCC OnLine CCI 2

Bench: Ashok Kumar Gupta, Sangeeta Verma and Bhagwant Singh Bishnoi

FACTS

Google offers various online products and services to its users. The instant case was concerned with Gmail and the Meet App of Google. It allows its users to send and receive emails, direct messages etc., through Gmail and enables them to make video conferences and meetings via Meet App.

Google integrated Gmail and Meet App. The informant challenged this integration on the grounds of abuse of dominant position as per the Competition Act, 2002. The informant, a university student, alleged that Google used its dominant position in one relevant market to enter another relevant market as per section 4(2)(e) of the Act, since Gmail held a dominant position in the relevant market.

ISSUES

The main issue before the Competition Commission of India (CCI) was whether Google had abused its dominant position. For this, the following sub-issues were considered by the Commission:

1. What were the relevant markets in the instant case, viz., the relevant market in which Google was alleged to hold a dominant position, i.e., the primary relevant market and the relevant market which it sought to enter?
2. Whether Gmail was in a dominant position in the former relevant market?
3. Whether the act of integration of Gmail and Meet App by Google amount to an abuse of its dominant position?

THEORETICAL FRAMEWORK

Section 4 of the Competition Act, 2002 deals with the abuse of dominant position by an enterprise. It prohibits such abuse and lists down certain practices which amount to such abuse. Section 4(2)(e) illustrates that when an enterprise or a group “uses its dominant position in one relevant market to enter into, or protect, other relevant market”.

Explanation (a) to section 4 of the Act elucidates the meaning of the term “dominant position”. It states that an enterprise is said to be in a dominant position when it enjoys a position of strength in the relevant market in India. This position enables it to operate independently of prevalent countervailing forces in the relevant market or affect its competitors or consumers.

The factors to determine whether an enterprise enjoys a dominant position or not are laid down in section 19(4) of the Act. They include the following:

1. The market share of the enterprise;
2. Size and resources of the enterprise;
3. Size and importance of the competitors;
4. The economic power of the enterprise, including commercial advantages over competitors;
5. The vertical integration of the enterprise or sale or service network of such enterprises;
6. The dependence of consumers on the enterprise;
7. Monopoly or dominant position, whether acquired as a result of any statute or by virtue of being a government company or a public sector undertaking or otherwise;
8. Entry barriers;
9. Countervailing buying power;
10. The structure and size of the market;
11. Social obligations and social costs;
12. Relative advantages; and
13. Any other factor considered relevant by the CCI.

Once it has been determined that the enterprise has a dominant position, CCI needs to find out if it has abused such a dominant position. For this, certain acts are deemed to be the abuse of the dominant position. They are provided in section 4(2) of the Act, which is as follows:

1. Imposition of unfair or discriminatory conditions or prices;
2. Limitation and restrictions on the supply of goods or services or developments related to them;
3. Engagement in practices resulting in a denial of market access;
4. Making unconnected supplementary obligations mandatory for the conclusion of contracts; or
5. Use of dominant position in one relevant market to enter or protect position in another relevant market.

The procedure to be followed by the Commission to inquire into the contravention of section 4 in case of receipt of information has been provided under section 26 of the Act. Broadly, the Commission follows a three-step inquiry into matters of abuse of dominant position:

1. Delineation of the relevant market (product and geographic);
2. Determination of the dominant position of the enterprise; and
3. Determination of whether its conduct or practices amount to an abuse of such position.

In case of contravention of section 4, the penalty has been provided under sections 27 and 28 of the Act. The Commission can order to discontinue abuse of the dominant position, impose a penalty or even order the division of the enterprise.

ARGUMENTS

On Behalf of the Informant

1. Google enjoyed a dominant position in the market for “internet related service and products”.
2. It was using its dominant position in the aforesaid market to enter into another market where it offered its services through Meet App.

On Behalf of Opposite Party

1. It was contended by Google that the information supplied by the informer is unsubstantiated and was founded on merely conjectures, hypotheses and apprehension.
2. Further, the informant was required to prove the existence of a prima facie case warranting investigation by the Director-General. The opposite party challenged the locus standi of the informer.
3. In regard to the allegation of abuse of the dominant position levelled against it, it made the following submissions:
   • Firstly, Google did not hold a dominant position in the market for “internet related services and products” since no such market exists. Had such a market existed, then also it could not be said to be in a dominant position in that.
   • Secondly, it was not dominant in “emailing and direct messaging” market in India because of the existence of competitors occupying a similar or superior position in the market.
   • Thirdly, the integration was for the benefit of Gmail users. The prohibition of such addition of the functionality, i.e., Meet App, would harm consumers.
   • Fourthly, the integration was made in order to meet the competition faced by it posed by its rivals, such as Facebook and Microsoft.
   • Lastly, even if it commanded a dominant position in the “email and direct messaging” market, then also its conduct did not amount to abuse of dominant position in light of the following facts:
     • It did not compel Gmail users to use the Meet App;
     • Gmail users had the option to switch off the Meet App; and
     • They could use rival video-conferencing applications implying no foreclosure of competition for its rivals.

DECISION

It was held that Google did not hold a dominant position in the market for providing email services in India. There was no contravention of the provisions of section 4 of the Competition Act, 2002. Thus, the integration of Meet tab with Gmail did not amount to abuse of dominant position. The case was closed under section 26(2) of the Act.

RATIONALE

Delineation of the relevant market

The Commission noted that both the parties to the proceeding had failed to recognize the primary relevant market accurately.

The relevant market in which Google was alleged to enjoy dominant position was identified by the CCI as “the market for providing email services in India”. The relevant market where it allegedly tried to leverage its position was connoted as “the market for providing specialized video conferencing services in India”. The Commission placed reliance on in Re: Harshit Chawla and WhatsApp Inc.[2] to identify the relevant market as per the facts and circumstances of the case.

The Commission enunciated that Google had erred in comparing its video conferencing services with those of WhatsApp, Truecaller, Instagram, Telegram, etc. It would be more apt to compare its video conferencing services with those provided by Zoom, Skype, Cisco Webex, Microsoft Teams, etc. This comparison was erroneous due to the difference in scale and functionalities of WhatsApp, Truecaller, etc.

Dominant position

The Commission concluded that Google could not be said to be dominant in the primary market. The contention of the dominance of Google was based on assumptions of the informant. It was not substantiated with any substantive material or other evidence. Thus, the Commission did not go into the issue of the dominant position of Google.

Abuse of Dominant Position

Since Google did not enjoy any dominant potion in the market, the question of the abuse of that position did not arise.

The integration of the Meet Tab with Gmail was done in order to keep up with the competition faced by Google. The CCI opined that such integration did not amount to abuse of dominant position, whether it enjoyed a dominant position or not.

There is no leveraging since Google did not coerce the users of Gmail to use Meet App for video conferencing. Moreover, the Meet App could be used by any user having a Google Account.

PREVIOUS JUDICIAL APPROACHES TO THE ISSUES

Locus Standi of The Informant

In Samir Agarwal v. Competition Commission of India,[3] the CCI had stated that while performing inquisitorial functions, any member of the public could approach CCI and NCLAT. It was necessary to subserve the high public purpose of the Competition Act.

Thus, the locus standi of any person approaching CCI is not a bar in case of any agreement, action or combination adversely affecting competition in the relevant market in India.

The Relevant Market

In this case, the Commission in Re: Harshit Chawla and WhatsApp Inc.,[4] the Commission had explained internet-based consumer communication services. It described that such services can be classified into various types on several bases, such as they can be real-time or with a wider set of people, proprietary or over-the-top. They may be available on all devices or may be peculiar or some devices. The Commission further recognized the problem of the challenging nature of compartmentalizing these services into water-tight categories.

Dominant Position of the Enterprise

In the instant case, no tangible and cogent evidence was placed before the Commission by the informant. In Ajay Devgn Films v. Yash Raj,[5] it was held that big name of the enterprise is not the basis for occupying dominant position in the relevant market.

In Mittal Auto Sales & Service v. Global Automobiles,[6] the Commission had dismissed the matter under 26(2) of the Act. The informants had alleged that the opposite party did not reimburse them for expenditure on promoting the opposite party’s product, thereby abusing their dominant position. In this case, the allegations made by the informants against the opposite parties abusing their dominant position in the relevant market were unsubstantiated and uncorroborated by any cogent evidence.

Regarding prima facie opinion, in Telefonaktiebolaget LM Ericsson v. CCI,[7] it was held that forming a prima facie opinion is a sine qua non for exercising jurisdiction under section 26(1) of the Act.

Moreover, being in dominant position is not per se bad, but the abuse of dominant position. The Competition Act, 2002 prohibits the abuse of dominant position. This has been held in Brajesh Asthana v. Uflex Ltd.[8]

COMMENTS

The order is in consonance with section 4 of the Competition Act, 2002. The conduct is not proved to point to abuse of dominant position as per the factors mentioned in section 19(4) of the Act. No extraneous factors were pointed out. Since no prima facie case was made out against Google LLC, the matter was rightly closed under section 26(2) of the Act.

If we look into the factors to determine dominant position of an enterprise enumerated under section 19(4) of the Act and facts and circumstances of the case, we might come up with the following inferences:

1. As to the market share of Google in email services market in India, no accurate reliable data of market composition of the market is available;
2. As to the size and resources of Google, it is a tech giant across the world. It is a subsidiary of Alphabet Inc.[9] It has a net worth of $223 billion and capitalization of $1.434 trillion as in February 2021.[10] It appears to be economically powerful in the relevant market;
3. The email services provided by Gmail are similar to those provided by Rediff mail, Outlook, etc. They stand on a similar pedestal in terms of their size and dependance of consumers, though one may be more commonly used than other;
4. There appear to be no entry barriers of nature which have the effect of leading an inference of dominance of Google, though technical and capital related entry barriers may exist;
5. It is not difficult to substitute services of one enterprise with that of a competitor in the relevant market;
6. Google LLC is a commercial enterprise which operates all over the world. It does not enjoy monopoly by virtue of any statute or being a government company or a public sector undertaking;
7. As Google LLC rightly pointed out, it does not coerce Gmail users to use Meet App. In fact, a user needs to be merely have a Google Account to use Meet App. He or she may or may not use Gmail; and
8. In fact, the integration seems to be a technologically innovative step and makes it easier and more convenient to use video conferencing services while using Gmail.

Prima facie, Google does not appear to be in a dominant position in the “market for providing email services in India”, despite being widely used by users in India. Being a big name, in the absence of any cogent proof, cannot be a ground for hypothesizing it dominant position. Therefore, I agree with the decision of the CCI as well as the grounds on which it is based.

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[1] 2021 SCC OnLine CCI 2.

[2] 2020 SCC OnLine CCI 32.

[3] (2021) 3 SCC 136.

[4] 2020 SCC OnLine CCI 32.

[5] 2012 Comp LR 1099 (CCI).

[6] (2010) CCI 9.

[7] (2016) 232 DLT (CN) 1.

[8] (2015) CCI 89.

[9] William L. Hosch and Mark Hall, Google, Britannica, https://www.britannica.com/topic/Google-Inc (last visited on June 5, 2021).

[10] How much is Google worth, Feedough, https://www.feedough.com/how-much-is-google-worth/ (last visited on June 6, 2021).

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