NCLAT asks Google and CCI to respond to firms challenging Play Store billing policy

At the hearing on Friday, the companies asked NCLAT to instruct Google not to charge them service fees until the next hearing. However, it did not grant them this interim protection. 

Mebigo Labs Pvt Ltd, the company behind Kuku FM and Shaadi.com, the Indian Broadcasting and Digital Foundation (IBDF), and the Indian Digital Media Industry Foundation (IDMTIF), among others, have been seeking interim protection from Google’s service fees until the CCI completes its investigation into the company’s billing policy. 

Also read: Can Perplexity do to Google what Microsoft did to IBM back in the day?

They approached NCLAT after the CCI rejected their pleas on 20 March, saying there were insufficient grounds for such action. However, the CCI asked its Director General (DG) – its independent investigative arm – to continue its probe into Google’s Play Store policies.

CCI’s investigation

The CCI had launched the probe on 15 March, saying Google may have violated various parts of Competition Act, and asked the director general to complete the investigation in 60 days. The CCI order suggests that Google’s unified codebase – a monolithic software repository used by 95% of its software developers worldwide – may constitute an abuse of its dominant position.

Also read: Google in trouble with CCI again, this time for violating fair pricing rules

Companies challenging the policy said Google’s service fees of 11-26% were excessive, disproportionate and discriminatory, leading to substantial losses and denial of market access for app developers. They pointed out that while Google provides services equally to all apps on the Play Store, it charges only a small subsection of app developers.

They also said the CCI’s order ignored important facts and evidence, and said user choice billing was nothing but a repackaged version of the Google Play Billing System (GPBS).

Google vs app developers

The dispute between Google and app developers stretches back years. In March, Google removed several apps, including Bharat Matrimony, owing to disagreements over its service fee for in-app purchases. Google took the action after the Supreme Court declined to issue a temporary order protecting the apps from being removed from the Play Store on 9 February. The court said it would consider the matter at a later time.

But in March, Google restored around 140 apps, including Shaadi.com, after IT minister Ashwini Vaishnaw intervened. Initially, the apps were reinstated without in-app payments, but these was later restored, albeit with a declaration from Google that all the companies would be charged service fees.

Also read: The cost of ex-ante regulation of India’s digital markets

Meanwhile, NCLAT has also begun hearing Google’s appeal against a ₹936-crore fine imposed by the CCI in October 2022 for abusing its dominant position in the app-store ecosystem. The company argued that it was not the sole dominant player, citing other app stores and the option to side-load apps. Google also said its Play Store Billing system constituted a small share of India’s overall payments industry, and that only 3% of all Play Store apps were charged the service fee.

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Published: 10 May 2024, 02:58 PM IST