Indian startups vs Google: The battle begins at Delhi HC

The Delhi High Court bench comprising Justice Tushar Rao Gedela heard the petitions filed by several startups, saying that the compliance report required to be filed by Google LLC—according to the CCI order—has not been scrutinized yet.

Until that happens, the U.S. tech major’s new billing system should be kept in abeyance, the Alliance of Digital India Foundation told the Delhi High Court on Tuesday.

In October last year, the Competition Commission of India found Google’s Play Store policies to be anti-competitive. Besides a Rs 936 crore penalty, the regulator’s order had several behavioural directions as well.

Google was asked to submit a compliance report within three months, which it did. But, due to a lack of functioning quorum at the CCI, the report has not been examined by the regulator.

AIDF’s petition is prompted by the Google Play Store’s new payment policy, which will come into effect on April 26, 2023.

Under the new policy, called the User Choice Billing System, a commission of 11-26% will be charged, and users will be able to pay via alternate channels like UPI, etc. But if the payment is made via Google Play’s billing system, the levy will be 15–30%.

To be sure, Google has maintained that 97% of developers distribute their apps via Google Play at no charge. Of those developers that are subject to a service fee, 99% are eligible for a fee of 15% or less. It’s the remaining 1%, whose revenue is more than $1 million, who have to pay a 30% service fee.

In its arguments on Tuesday, the ADIF said that either the CCI should examine Google’s compliance report before April 26 or the status quo should be maintained until the regulator takes up the matter.

It also highlighted that Google will have access to user data on other means of payment. Such policies are likely to result in a reduction in revenue and profitability, which could hamper the growth and sustainability of many Indian startups, AIDF said in a media note.

In response, the counsel for the CCI submitted that currently, the regulator has only a two-member quorum. While the doctrine of necessity was invoked to approve merger and acquisition filings, no such decision has been made for enforcement cases.

The high court has asked the counsels to submit brief notes of the submissions they wish to make before the court. The hearings in the matter will continue on Wednesday. Bloomberg