Consider Start-Ups’ Applications Against Google’s New Payment Policy On Or Before April 26: Delhi High Court To CCI

The Delhi High Court on Monday directed the Competition Commission of India to take up the applications moved by an alliance of start-ups against Google’s new in-app user choice billing policy, and consider the same on or before April 26. 

Justice Tushar Rao Gedela pronounced the order on the plea moved by Alliance of Digital India Foundation, against the new policy. The plea had also sought direction on the tech giant to keep the same in abeyance till the issue is adjudicated by Competition Commission of India.

The applications have been filed seeking interim relief and under section 42 of the Competition Act, 2002 which gives power to the Commission to pass an order against a party for contravening its orders.

“There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of Competition Act as filed by the petitioner for hearing and considering the same in accordance with law on or before 26 April, 2023. It is made clear that the observations made herein are only to the extent of deciding the present lis before this court and shall not tantamount to any expression on the merits of the case and the same is therefore, without prejudice to the rights and contentions of all parties to be taken at the appropriate proceeding,” Justice Gedela said.

The petitioner alliance was aggrieved by the alleged inaction of the CCI to decide its application seeking interim relief against the policy, which is set to come into force from April 26, for lack of quorum at since October last year.

“…due to lack of quorum since 26th October 2022, it is practically non-functioning, and the Respondent No. 2 to 5 (Google) are taking advantage of the same are engaging in anti-competitive conducts which will cause irreversible harm to the members of the Petitioner and other app developers in the market and cause distortion in the market,” the plea stated.

It was the case of the petitioner alliance that Google’s new billing policy is “cloaked as another version of Google Play Billing System” which projects the “hoax of giving liberty to app developers to opt for third party payment processors.”

It stated that despite the user using third-party payment processors, Google will be charging “service fee” at a 4% reduced rate from the developer for transaction which happen via non GPBS under the garb of new pricing policy.

“Presently, for such transactions, there is no requirement to pay any commission since GPBS is not used in such transaction. This commission of 26% should not be charged by Google at all, as it is unfair, and arbitrary, when Google’s payment services are not being used,” the plea stated.

It was also submitted by the petitioner that the app developers, despite not using GPBS, will be compelled to pay almost the same amount and that Google chose not to introduce the new billing policy after the matter before CCI is concluded when the final order was reserved.

The plea placed reliance on the order passed by CCI on October 25, 2022, directing Google to not impose any condition on app developers which is unfair, unreasonable or discriminatory to the services provided to them. The tech giant was also directed to ensure complete transparency in communicating to app developers the services provided and corresponding fee charged.

The plea thus sought a direction that the CCI can validly invoke “doctrine of necessity” in the matter for initiating non-compliance proceedings against Google.

“…CCI by invoking the doctrine of necessity has started approving proposed combinations in the interest of the market and economy. Similar standards and non-discriminatory approach should also be followed by the CCI to adjudicate the information related to anti-competitive conduct professing in the market and deter such activities,” the plea stated.

Title: Alliance of Digital India Foundation v. Competition Commission of India and Ors.

Citation: 2023 LiveLaw (Del) 339