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June 6, 2023


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HC issues notices to startups, CCI on Google billing policy

3 min read

New Delhi: The Delhi high court on Wednesday issued notice on the appeal filed by Google’s parent company Alphabet Inc against a single judge order directing the Competition Commission of India (CCI) to decide the applications moved by an alliance of start-ups against tech giant’s new in-app user choice billing policy on or before 26 April.

A bench of chief justice Satish Chandra Sharma and justice Subramonium Prasad sought the response of the Alliance of Digital India Foundation (ADIF) and posted the matter for hearing on 19 July.

On Tuesday, the court had refused urgent hearing to the tech giant in the matter after its counsel had told the court that the CCI cannot hear the matter due to the lack of quorum.

On Monday, single judge bench of Tushar Rao Gedela, had directed CCI to decide the applications against the new policy, while saying that proceedings before CCI would not be vitiated due to vacancy or any defect in its constitution.

The court’s judgment had come on a clutch of pleas by digital start-ups seeking direction to Google to keep its proposed User Choice Billing (UCB) system in abeyance till the CCI completes investigation of their complaint over the tech giant’s non-compliance with the competition watchdog’s ruling in the Google Play Store policy case.

“There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 (contravention of CCI orders) of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26 April. Accordingly, the petition stands disposed of in above terms,” said the court.

The petitioner had approached the high court earlier this month with the grievance that the anti-trust regulator had failed to act on its application challenging the new payment policy of Google owing to lack of quorum.

ADIF moved the high court earlier this month, underlining that under its ‘user-choice billing’ (UCB) policy, which is slated to come into force from 26 April, Google will be able to charge service fee at 11%, or 26% in case of third party payment processors, which is anti-competitive and an attempt to bypass an order passed by the CCI.

According to ADIF, Google earlier required app developers to use its payment method named Google Play Billing System (GPBS) for all transactions, including paid app downloads and in-app purchases.

In October 2022, on an application by ADIF, CCI slapped a fine on Google for GPBS and directed it to allow use of third-party billing services for in-app payments.

ADIF contended that the UCB was a cloaked version of the GPBS, which projects the hoax of giving liberty to app developers to opt for third-party payment processors. ADIF said it filed several applications before CCI against Google’s non-compliance, but CCI was yet to take any action owing to lack of quorum. As a result of this, the market remains vulnerable to abuse of dominant position by Google.

The court was informed that in October last year, the CCI, while imposing a penalty of 936 crore, had asked Google to allow and not restrict app developers from using any third-party billing services and to not impose any discriminatory condition.

The petitioner had said its grievance was that the CCI has failed to act on its plea in relation to the new policy owing to lack of quorum to consider the issue. It had contended that the CCI must invoke the “doctrine of necessity” and look into the matter as a refusal to intervene will cause irreversible harm to the petitioners and other app developers, and lead to distortion in the market.

Google had opposed the petition on several grounds, including that since there were only two members and the Chairperson was yet to be appointed, the CCI was incapable of adjudicating the application filed by the petitioner.

In its ruling, Justice Gedela said that the question of examining whether the doctrine of necessity is or is not applicable to the present case does not arise at all.

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