Madras HC gives relief to Indian startups over Google's billing policy

For representational purpose.

The Madras high court on June 8 gave respite to a bunch of Indian startups such as Aha, Kuku FM, and more from being de-listed from the Google Play Store, for not agreeing to its new billing system. However, as an interim arrangement they will have to pay 4 per cent of the gross revenue of the downloads from Play Store to Google, and will have to submit download data to Google on the 15th of every month.

The court also modified its stay order granted to matrimony.com in April and put it to same terms.

Indian startups moved the high court seeking protection from being delisted from Google Play Store for not accepting Google’s users choice billing system.

The US-based internet behemoth asked these startups to either adopt its billing policy or risk being removed from the Play Store. The matter will come up for hearing on June 19, when the court is likely to hear the case and decide.

Senior Counsel PS Raman appeared for Google and argued that granting these start ups a blanket injunction would amount to Google not earning any revenues from listing them on Play Store.

Senior Counsel Sriram Panchu appeared for the start ups and argued that these companies, who rely heavily on their listing in app stores, will be left without income if they are delisted.

The court accordingly passed the order directing the companies to pay 4 percent of the gross revenue from its play store downloads. Google has also filed an application questioning the maintainability of the pleas by startups.

It is to be noted that the vacation bench of Madras HC had passed a similar order in Jeevansathi.com's plea in May 2023.

In April, the court had restrained Google from removing the Matrimony.com apps from Play Store till June 1.

In October 2022, the Competition Commission of India (CCI) imposed a penalty of Rs 936.44 crore on Google for abusing its dominant position in the Play Store ecosystem by imposing its billing policy.

It directed Google not to restrict app developers from using third-party billing or payment processing services, either for in-app purchases or for purchasing an app.  Google was also directed not to discriminate apps using third-party billing services.

Several Indian startups have alleged that instead of complying with CCI's order, Google is trying to circumvent it by asking apps to use “alternative billing system/user choice billing” along with its existing billing system, terming it as its new policy.

Under the new policy, if users pay through their choice of billing system, the transaction is still subjected to a service fee, but at a 4 percent discount, they have said.

This effectively means that developers will have to pay a service fee to Google ranging from 6-26 percent for in-app purchases, subscriptions, and annual revenue it generates on Google Play, instead of the usual 10-30 percent service fee.