Madras HC temporarily restrains Google from delisting apps of Indian startups

Google Madras HC

A division bench of Madras High Court on August 18 passed an interim order restraining Google from delisting the apps of a bunch of Indian startups from its Play Store.

The interim arrangement is subject to the startups paying 4 percent of the gross revenue of the downloads from Play Store to Google, and will have to submit such data to Google on the 15th of every month.

The order was passed in an appeal filed by a bunch of Indian startups challenging the order of the single judge of the Madras High Court dismissing their pleas against Google's app billing policy.

Appearing for some startups, senior advocate and former finance minister P. Chidambaram argued that the suit filed by the startups were indeed maintainable and competition act of 2002 is to be read in a way to construe that a suit can be maintained.  Chidambaram was briefed by lawyer Abir Roy, a partner at law firm Sarvada Legal.

Hearing of the appeal is likely to continue on August 23.

The appeal first came up for hearing on August 11, when the court issued notice to Google. The tech giant also undertook at the court that it will not delist the applications of the startups till August 18.

On August 3, a single judge of Madras High Court dismissed 14 of the 16 pleas from Indian startups and tech companies, including Bharat Matrimony, Shaadi.com and Unacademy, against Google's app billing policy.

The court gave the order stating that the issue falls under the jurisdiction of the Competition Commission of India (CCI). The two remaining pleas, one from streaming service Disney+ Hotstar and exam preparation app Testbook, are also likely to be dismissed, Moneycontrol has learnt.

According to the High Court, since the startups alleging abuse of dominant position by Google, the CCI has jurisdiction to adjudicate on the same. The high court held that CCI is empowered to direct any enterprise guilty of abuse of dominant position to discontinue such practices, hence  any order passed by CCI under such circumstances would be applicable to all the businesses. However, in case of the present proceedings, such an order will be made applicable only to the company which has challenged Google's policy.

Among other petitioners include startups such as KukuFM, TrulyMadly, QuackQuack, Pratilipi, Crafto, Tamil publisher Ananda Vikatan, streaming services like Altt, Stage and Aha and industry body Indian Digital Media Industry Foundation that represents prominent streaming services such as Zee5, SonyLIV and SunNXT.

As per the new policy, 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 4 percent rate reduction. The startups have sued Google claiming that this policy amounted to Google abusing its dominant position.