India's Supreme Court on Thursday declined Google's request to block an antitrust order that forces it to change how it markets its Android platform, dealing a major blow to the US company in a key growth market.
The Competition Commission of India (CCI) fined Google, which is owned by Alphabet Inc, $161 million 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.
A 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 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.
The Supreme Court ruling complicates Google's business practices in India as the company could be forced to change its agreements with smartphone players and other device makers in the coming days, other lawyers familiar with the decision said.
The CCI has ordered Google 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 not prohibit uninstalling 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 rulings are seen as more sweeping than the European Commission’s 2018 landmark ruling for imposing what they called unlawful restrictions on Android mobile device makers. Google has challenged the record $4.3 billion fine in that case.
Google also says in its India filings that "no other jurisdiction has ever asked for such far-reaching changes".
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 paste."