The Madras High Court has dismissed 14 out of the 16 pleas filed by Indian startups and tech companies, including Bharat Matrimony, Shaadi.com, and Unacademy, against Google’s app billing policy. The court order, viewed by Moneycontrol, revealed that the issue falls within the jurisdiction of the Competition Commission of India (CCI). It is anticipated that the remaining two pleas, submitted by Disney+ Hotstar and Testbook, will also be dismissed.
CCI Empowered to Adjudicate on Allegations of Abuse of Dominant Position
The High Court ruled that since the startups have alleged abuse of dominant position by Google, the CCI is the appropriate authority to adjudicate on such matters. The court emphasized that the CCI authorized to direct any enterprise found guilty of abusing its dominant position to cease such practices. Therefore, any order issued by the CCI in such circumstances would be applicable to all businesses. However, in the present proceedings, such an order will only apply to the company that challenged Google’s policy.
Court Rejects Google’s Plea to File Cases in California
The court rejected Google’s contention that the company should file the cases in California since it is headquartered there. It cited the Competition Act enacted by the Indian legislature, which aims to prevent practices adversely affecting competition in the Indian market. The court stressed that the Act upholds the freedom of trade enjoyed by Indian citizens under Article 19 of the Constitution of India.
Petitioners and Interim Injunction
The other petitioners in the case include startups like KukuFM, TrulyMadly, QuackQuack, Pratilipi, Crafto, Tamil publisher Ananda Vikatan, and streaming services like Altt, Stage, and Aha. Additionally, the Indian Digital Media Industry Foundation, representing streaming services like Zee5, SonyLIV, and SunNXT, is also part of the case.
Earlier, the court had granted an interim injunction to these companies, directing them to pay a reduced 4 percent fee to Google for using its in-app payments system. It also prohibited Google from delisting any of them from the Play Store.
Google’s App Billing Policy Changes and CCI’s Inquiry
In February, Google announced that it would allow app developers in India to offer an alternate billing system for in-app purchases starting April 26, 2023, in compliance with CCI directives. The new policy introduced a User Choice billing system, reducing the service fee to 4 percent for transactions made through this alternative system.
However, in April 2023, Alliance of Digital India Foundation (ADIF) deemed this new billing system an “abusive dominance practice” by Google and requested the antitrust watchdog to investigate it urgently. CCI responded in May, stating that it needed to inquire whether the policy complies with its previous directives. The case is still pending for further hearing.
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