No Precipitative Action Against Google India Till Next Date Of Hearing: CCI Tells Karnataka High Court

The Commission by its order rejected Google's request for access to the identity of app developers/start-ups allegedly suffering harm on account of Google Play store payments policy 2020 and directed it to file its reply to the application filed by Alliance of Digital India Foundation (ADIF), by December 31, failing which it shall proceed with the matter.

A vacation bench of Justice B M Shyam Prasad said that, "Unanimous submission is that there will be no precipitative action till the next date of hearing. The office is directed to list the petition on January 5."

Senior Advocate Gopal Subramanium appearing for the company argued that, "If I don't have access to the information, how do I make out my case before the Commission? The order says failing me filing a detailed response by December 31, the Commission will proceed to hear the application. Therefore we are before this court."

Additional Solicitor General N Venkatraman appearing for the CCI urged the court not to pass any interim order and said, "Your lordships can have the matter on January 3 or 4, 2022. The whole media and the whole world of technology is watching this matter and it will send the wrong signal, if any order is passed." He added that, "They (Google) use the order and delay the proceedings."

ASG also said that, "We have not withheld any information regarding what google has to respond to. The only redact is the app developers name who are small start-ups and are upcoming in India. Section 35 of the CCI Act mandates that the commission shall withhold the informant's name. By not giving the app-developers name, Google has no difficulty in reply to the application. They have not been prejudiced."

Following which he said that, "On Gentleman's agreement till January 4 2022, we will not precipitate, it is an oral undertaking." The court recorded the same and posted the matter for further hearing on January 5, 2022.

The plea filed through Advocate Dharmendra Chatur, Advocate Manu Kulkarni and Poovayya & Co. Sanjanthi states that, on February 20, 2020, an anonymous party filed a complaint against the petitioners in relation to their policies surrounding Google Play. On November 9, 2020, the Commission directed the Director General to initiate an investigation against Google to determine whether Google anti-competitively requires developers distributing their apps through the Play Store to use Google Play's billing system and to pay 15-30 percent on the sale of digital goods as a service fee.

Further, it is said that, on October 6, 2021, respondent No. 2, Alliance of Digital India Foundation (ADIF), filed an application under Section 33 of the Competition Act, asking the Commission to stay the petitioners' Google Play Billing Clarifications.

In its reply, Google said, "The application was filed approximately one year after the Google Play Billing Clarifications were announced in October 2020. Therefore, it is clear that ADIF itself has disproved any notion of urgency in approaching the Commission for interim relief measures."

On October 18, while the commission's investigation was ongoing, ADIF filed additional information under Section 19 of the Competition Act ("ADIF Information") informing about the non-confidential version of the ADIF Information. On November 16, the company requested that the Commission establish a confidentiality ring and share the confidential version of the ADIF IR Application, explaining that this would allow Google to understand the claims against it. It also sought additional time to respond to ADIF's allegations.

On November 30, the Commission set up a confidentiality ring, allowing 6 members to be part of the petitioners' confidentiality ring. The Commission also directed ADIF to submit a revised confidential version of the ADIF IR Application. However, the Commission, on its own accord, instructed ADIF to redact the names and identities of app developers/start-ups who had provided evidence for the ADIF IR Application.

On December 9, the petitioners again asked the Commission to disclose the identity of the app developers/start-ups who have provided certain evidence and information in the ADIF IR Application.

On December 10, it was announced that the deadline for impacted Indian developers to comply with the Google Play Billing Clarifications was extended until 31 October 2022. The same was informed to the Commission.

However, on December 14, ADIF filed Rejoinder in response to the Limited Response filed by the Company, asking the Commission inter alia to rule on the ADIF IR Application although the Google Play Billing Clarifications.

Following which the same day the company passed the impugned order refusing to disclose the app developers/start-ups' identities, stating it was satisfied with the confidential version of the ADIF IR Application. The Commission also dismissed as "thoroughly misconceived" the petitioners' argument that deferring the deadline for the Google Play Billing Clarifications rendered the ADIF IR Application infructuous. The Commission directed the Company to file its response to the ADIF IR application by December 31.

The plea says that the impugned order violates principles of natural justice. It constrains the petitioners to defend the ADIF IR Application - which is predicated on an assertion of irreparable harm, while simultaneously denying the Petitioners the right to know the identity of the parties that they are alleged to have harmed.

Further it states that, "Forcing the Petitioners to defend the ADIF IR Application blindfolded cannot comport with natural justice, such restraint is premised on mere speculation that the Petitioners would retaliate against the complainants, a theory the Commission adopted without any reasoned order or hearing."

It is also said that, "The Commission failed to appreciate that withholding information relating to the identity of the relevant app developers/start-ups denies the Petitioners their right to defend themselves effectively, including their ability to verify the particulars of the harm alleged."

The Impugned Order disables Google's ability to test the bona fides of ADIF's claim to represent the entities that are alleged to require interim relief. The Impugned Order denies Google the right to determine whether the complainant entities are in fact among the very small percentage of Indian app developers/start-ups that may be affected by the non-urgent measures that are sought to be restrained (which Google estimates to be less than 1 percent).

The plea thus prays for directions to the Commission to protect the petitioners' constitutional, statutory and due process rights and set aside the impugned order. In the interim, the petitioners seek to stay further proceedings in relation to ADIF's IR Application before the Commission and also grant a stay of the operation of the impugned order.

Case Title: Google India Private Limited v. Competition Commission Of India

Case No: WP 24277/2021