The Competition Commission of India (CCI) on Monday dismissed a plea alleging that Microsoft Corporation abused its dominant market position by bundling its antivirus software Microsoft Defender with its Windows operating system (OS)..The case, filed by an anonymous informant (referred to as XYZ), accused Microsoft of engaging in anti-competitive practices that allegedly meddled with competition in the antivirus software market in India..The allegations focused on Microsoft's practice of pre-installing and pre-activating Microsoft Defender on all Windows OS devices since the release of Windows 10 in 2015. It was argued that this practice created significant barriers for third-party antivirus software developers, effectively forcing them to join Microsoft's Virus Initiative (MVI) program to remain competitive..The informant argued that Microsoft's practices created three major challenges for third-party antivirus developers:Third-party developers had to sign a one-sided agreement to access Microsoft's Antimalware Application Programming Interface, which was essential for compatibility with Windows OS. Developers could only enter the Windows ecosystem through the Microsoft Store, sideloading, or Original Equipment Manufacturers agreements, with the MVI program being a significant hurdle.Third-party antivirus software could not function optimally without being set as the default app, as features like real-time protection and automatic updates were restricted to the default antivirus app..Microsoft argued that Defender is not a separate product, but an integral part of the Windows OS. It said that the product is provided at no additional cost to users.It was further contended that the users are free to install third-party antivirus software, and Microsoft Defender automatically disables itself when a third-party app registers as the default antivirus solution.According to the company, MVI program is optional and designed to help developers improve their security solutions on Windows. Non-MVI members can still distribute their software through the Microsoft Store or direct downloads. It also informed the CCI that Microsoft does not extract proprietary information from MVI members and only accesses publicly available data..The CCI examined several specific concerns, including unfair conditions, impediments to technical development, tying, leveraging dominance and restricted market access.On the claim of unfair conditions, the CCI found no evidence that users were compelled to use Defender, as they could freely install third-party antivirus software. "Users are free to install any third-party antivirus software of their choice, either through the internet or via the Microsoft Store. They can opt to continue using Microsoft Defender or replace it with a non-Microsoft solution on Windows...Therefore, in the absence of an element of compulsion or imposition, prima facie there appears to be no violation of Section 4(2)(a)(i) of the Act," the order said. Similarly, allegations of hindered technical development were dismissed due to the lack of evidence and the continued innovation in the antivirus market."The technological progress in the cybersecurity and OS sectors remains dynamic and is not hindered by alleged Microsoft practices.... thus allegations against Microsoft in respect of any actual or potential impediment to technical and scientific development appear to be largely speculative and lack relevant proof of harm.".The CCI also rejected the tying argument, acknowledging Microsoft's dominance in the OS market but noting the absence of user coercion and the persistent competition among antivirus providers."Despite the presence of Microsoft's built-in security software, multiple well-established and prominent players continue to operate in the market without significant barriers to entry or exclusion. Notably, leading cybersecurity firms such as Symantec, Bitdefender, Norton, McAfee, and AVG have remained active in the market since the introduction of Windows 10. Their sustained presence suggests that they have not been driven out or significantly weakened due to Microsoft's practices.".Further, the CCI found no basis for claims that Microsoft leveraged its OS dominance to protect its antivirus market share, emphasising the lack of restrictive practices.Ultimately, the CCI concluded that no prima facie case of contravention of Section 4 existed. The Commission highlighted that for anti-competitive allegations to be valid, demonstrable compulsion or restrictions are necessary. The ability of users to choose alternatives and the presence of a competitive market were crucial factors in its decision making, thus it dismissed the plea. .Microsoft Corporation was represented by a team from Shardul Amarchand Mangaldas (SAM) guided by partner Naval Chopra and led by Partners Yaman Verma and Rohan Arora, with support from Senior Associate Raveena Kumari Sethia and Associates Aisha Khan and Sai Divkanwar S..[Read Judgment]
