Smart TV operating system case turns focus on lack of adequate laws

The inclusion of Xiaomi India and TCL India in an antitrust complaint against Google’s alleged abuse of dominance in the smart TV operating system (OS) market has brought to the fore questions of collective dominance and its absence in Indian competition law.

Experts said a case of collective dominance might not stand in the absence of such a provision in the law.

The two smart TV manufacturers have been made party to the case since they are seen as restricting the entry of other OS developers into the market by voluntarily agreeing to anticompetitive clauses in Google’s terms of service, a person aware of the matter said.

In order to use Google’s Android OS on their smart TVs, manufacturers have to agree to a clause that restricts them from using any competing OS or forked versions of Android on smart TVs or any other devices they manufacture, including smartphones, according to the complaint. Xiaomi, TCL and Google did not respond to emails seeking comment till press time Monday.

“Abuse of dominance can only be against one player, there’s no concept of collective dominance in India,” said Kanika Chaudhary Nayar, a partner at law firm Luthra & Luthra.

Collective dominance refers to a market in which two or more independent players, having economic links, jointly hold a superior market position relative to other players in that market.

Section 4 for the Competition Act defines a dominant position as one which enables an entity “to operate independently of competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour”.

Since such cases are untenable as per existing laws, they remain unanalysed, leaving a gap in the law, according to Anisha Chand, a partner at Khaitan & Co. “Cases of collective dominance have been repeatedly closed by the CCI (Competition Commission of India) in the absence of a legal provision in the statute,” Chand said.

This would all be contingent upon the fair-trade regulator ordering an investigation into the case, filed in June by antitrust advocates Kshitiz Arya and Purushottam Anand.

“The case alleges Google’s dominant position in the market for licensable smart TV OS is being abused to enter into other markets (smartphones and other devices) and to restrict entry to other developers of licensable OS,” the person quoted earlier said.

While Xiaomi and TCL have been named in the report, it is primarily Google’s conduct which was alleged to be amounting to abuse of dominance, the person said.

According to experts, if a probe is ordered in the case, Xiaomi and TCL could end up assisting the CCI.-The Economic Times

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