In a setback for Indian app makers, the Competition Commission of India (CCI) on March 20 rejected their plea for interim relief against Google in the contentious Play Store billing policy case, Moneycontrol has learnt.
This development comes less than a week after the CCI passed an order noting that the tech giant's User Choice Billing (UCB) system 'prima facie' violates the Competition Act, 2002 on March 15.
The antitrust regulator also ordered the Director General (DG) to conduct an investigation, complete it and file a report regarding the same in 60 days.
In an order dated March 20, CCI stated that the app makers have not been able to demonstrate a case for the grant of interim relief over completely restraining Google from collecting its fees. Moneycontrol has reviewed a copy of the order.
"The informants (app makers) have also not been able to demonstrate as to how the impugned conduct would result in irreparable harm that cannot be remedied through monetary compensation. The Commission is also not persuaded that balance of convenience lies in favour of the Informants," as per the CCI order.
"Getting an interim order would have provided immediate relief to struggling startups but nothing really changes from a longer-term perspective," said Shaadi.com founder Anupam Mittal in a statement.
"I think the more important news is the CCI's earlier order which has ordered an investigation to be completed in 60 days. We remain confident about our case against large tech companies attempting to extract rent from India through extreme monopolistic practices" Mittal said.
Google app delisting saga
The latest order was passed by the country's antitrust regulator in a plea filed by a bunch of Indian app developers including Shaadi.com and Kuku FM, alleging that Google had violated CCI's October 2022 order with its new payment policy.
As a consequence of this order, Google is now free to delist the apps of Indian digital companies from Play Store if they do not comply with the company's payment policy.
That said, Moneycontrol reported on March 5 that a forum has been established between the tech giant and a few prominent Indian app developers including Matrimony, and Shaadi.com to come up with a long-term solution for the app billing issue within the next 120 days, after a government intervention.
This measure came after Google delisted over 100 apps of app developers such as Matrimony, Info Edge (which runs Naukri, 99acres, and Jeevansathi), Shaadi.com, and Kuku FM for not complying with the company's app billing policy for an extended period of time on March 1.
Google's action was after the Supreme Court refused to pass an interim order protecting these internet firms from being delisted from Google's Play Store on February 9, 2024. Although, it has agreed to hear the matter in the forthcoming future.
The app developers had approached the Supreme Court against Madras High Court's order that had dismissed its plea challenging Google's enforcement of its app billing policy.
As per the CCI's latest order, Google contended that offering an interim relief to these developers would "virtually amount to requiring the company to offer Play for free to developers in India"
CCI then stated that while it is essential to ensure a level playing field and protect competition within the app store market, any measures taken should be "proportionate and carefully crafted to minimise unintended consequences and preserve the overall integrity and functionality of the platform ecosystem"
Google's User Choice Billing system
Google introduced the User Choice Billing system in India in 2023 as part of the company's efforts to comply with CCI's October 2022 antitrust order. It allowed developers to offer an alternate billing system for in-app purchases alongside Google Play’s own billing system.
If a user pays through the alternative billing system (also termed as user choice billing system), the transaction will still be subjected to a service fee, but at a four percent rate reduction.
This effectively means that developers will have to shell out a service fee to Google ranging from 11-26 percent for in-app purchases and subscriptions, depending on the type of app/service and the annual revenue it generates on Google Play, as compared to the regular 15-30 percent service fee.
In May 2023, Google had claimed that this policy is compliant with CCI's order, although local Internet firms including Shaadi.com disagreed and had sought the suspension of this policy.
In its March 15 order, CCI noted that Google has imposed unfair price in violation on app developers "It appears that such imposition results in app developers having fewer resources to enhance or develop their app offerings, thereby constraining the growth of the app market" the order read.
The antitrust regulator has also observed that Google's behavior curtails the freedom of app developers to select their business model and user engagement method.
A Google spokesperson had previously said that the CCI had previously examined the company's service fee "in detail between 2020 and 2022 and found no illegality".
"However, we take our commitment to comply with local laws and regulations in India seriously and will cooperate with the process in every way," the spokesperson said on March 15. We have reached out to Google over CCI's latest order and will update once we hear back.
Earlier CCI Play Store order
In October 2022, CCI had directed Google not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play besides a range of corrective measures to modify the company's app payment policies.
It also fined Google Rs 936.44 crore for abusing its dominant position with regard to its Play Store policies. Google is currently pursuing its appeal in NCLAT against CCI's Rs 936.44 crore fine.
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