HC offers relief to start-ups, asks CCI to hear plea against Google's billing policy

Google

Justice Tushar Rao Gedela of the Delhi High Court has asked the Competition Commission of India to hear applications moved by a group of Indian start-ups against Google’s new in-app user choice billing policy and take a decision on or before April 26.

Alliance of Digital India Foundation (ADIF) moved the court against the competition regulator and the search engine giant, seeking CCI to urgently investigate Google's user choice billing system (UCB) as it violates the anti-trust watchdog's October 25, 2022 order. Google is to introduce the new billing system on April 26.

The petition sought a directive to CCI to invoke the 'doctrine of necessity' (extraordinary actions by administrative authority) to investigate Google's alleged violation of the regulator's guidelines and pass an order as CCI does not have the quorum to adjudicate anti-trust cases. It also sought a stay on Google's implementation of the UCB till the investigation was over.

ADIF, a think tank, filed the case and  urged CCI to stay Google's new billing policy. 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, in effect, 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 Store billing.

The policy has been made mandatory for in-app digital content purchases for users outside of India. In October 2022, CCI directed Google to not 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.

Reacting to Delhi HC's verdict, ADIF said "The verdict provides a ray of hope to Indian startups, against Google’s unfair lagaan."