Delhi High Court reserves judgment in start-ups' plea against Google's user choice billing system

Google is currently pursuing its appeal in NCLAT against CCI's Rs 936.44 crore fine.

Delhi High Court on April 19 reserved a plea by Alliance of Digital India Foundation (ADIF) against the Competition Commission of India (CCI) and Google. The alliance wants CCI to urgently investigate Google's user choice billing system (UCB) as it violates the anti-trust watchdog's October 25, 2022 order.

The plea asked the court to direct CCI to conduct an investigation by invoking the 'doctrine of necessity' (extraordinary actions by administrative authority) to investigate Google's alleged violation of CCI's direction and pass an order. It seeks invocation of the 'doctrine of necessity' as CCI does not have the quorum to adjudicate anti-trust cases. The plea further asked the court to stay Google's implementation of the UCB till CCI finished its investigation.

ADIF was represented by lawyer Abir Roy who contended that CCI has to decide on the application for investigation quickly as Google intends to implement the policy from April 26. He further argued that CCI is currently clearing merger and acquisition deals (combination filings) using the doctrine of necessity, and hence it must also consider ADIF's case. Senior advocate Jayant Mehta, who appeared for Match Group Inc, supported ADIF's plea on invoking the doctrine of necessity.

Appearing for CCI, Additional Solicitor General N Venkataraman argued that since the process of appointment of members to CCI is in progress, it may not be appropriate to hear an anti-trust case at this stage. Futhermore, he added that CCI is clearing mergers and acquisitions as the Competition Act mandates that it cannot be kept pending beyond a certain period of time.

Google also argued that CCI cannot invoke the doctrine of necessity for this case. Senior counsels Sajan Poovayya and Sandeep Sethi argued for Google.

ADIF, a think tank, filed the case seeking directions to CCI to consider its case for interim relief as Google has not complied with CCI's October 25 order in the Google Play Store policies case.

ADIF has also urged CCI to stay Google's new billing policy until CCI has considered its case. Under the new policy, if a user pays through the alternative billing system (also termed user choice billing system), the transaction will still be subjected to a service fee, but at a 4 percent rate reduction.

This effectively means that developers will have to pay a service fee to Google ranging from 6-26 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 10-30 percent service fee.

Google paused the enforcement of its in-app billing policy in India in November 2022, following CCI's antitrust order on Play billing.

The policy has already been made mandatory for in-app digital content purchases for users outside of India. In October 2022, CCI 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.