As Google Challenges Payment Policy Order, High Court Seeks Start-Ups' Stand

The Delhi High Court today sought the stand of the Competition Commission of India and Alliance of Digital India Foundation (ADIF) on Google's challenge to an order asking the regulator to look into the tech giant's policy of allowing use of third-party payment processors for paid app downloads and in-app purchases on a commission basis.

A bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad issued notice on Google's appeal against the single judge's order, which asked the Commission to consider the plea of ADIF, an alliance of individuals and an industry representative body of innovative start-ups in the country, against the new billing system on or before April 26.

Senior advocate Sajan Poovayya, appearing for the appellant entity, said he was "not asking for an interim order" at this stage.

"Issue notice," said the bench.  On Tuesday, the court had refused to grant urgent hearing to Google on the appeal on the same day.  Google had mentioned the appeal before the bench for urgent listing, saying the Commission was scheduled to take up the matter in the afternoon itself pursuant to the order of the single-judge bench.

The ADIF had approached the single-judge earlier this month with the grievance that the anti-trust regulator had failed to act on its application objecting to Google's new payment policy owing to a lack of quorum.

Google had opposed the petition before the single-judge bench on several grounds, including that since there were only two members and the chairperson was yet to be appointed, the Commission was incapable of adjudicating the application filed by the petitioner.

However, Justice Tushar Rao Gedela, in its 38-page order passed on Monday, noted that any vacancy or defect in the constitution of the Commission would not invalidate any proceedings so far as its adjudicatory powers are concerned and according to Additional Solicitor General N Venkataraman, the Commission was formed in accordance with the provisions of the Competition Act and was very much functional and carrying out adjudicatory functions.

"There is no impediment, legal or otherwise, in directing the CCI to take up the applications under section 42 (contravention of CCI orders) of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023. Accordingly, the petition stands disposed of in above terms," the single-judge bench had said.

The ADIF had earlier submitted before the single-judge bench that under its "User Choice Billing" policy, which is slated to come into force from Wednesday (April 26), Google would be charging a service fee at 11 per cent or 26 per cent in case of third-party payment processors, which is anti-competitive and an attempt to bypass an order passed by the Commission.

It had said the US technology giant operates a mobile application marketplace for android devices called "Play Store", which enjoys supreme dominance in that market and under the present framework, there is no requirement to pay any commission for third-party payment processors.

The single-judge bench was informed that in October last year, the Commission, while imposing a penalty of Rs 936 crore, asked Google to allow and not restrict app developers from using any third-party billing service and not impose any discriminatory condition.

The ADIF had said its grievance was that the Commission had failed to act on its plea in relation to the new policy owing to a lack of quorum to consider the issue.

It had contended that the Commission must invoke the "doctrine of necessity" and look into the matter as a refusal to intervene will cause irreversible harm to the petitioners and other app developers, and lead to distortion in the market.

The implementation of the policy, in the meantime, must be kept in abeyance till the matter is looked into by the anti-trust regulator, the petitioner had prayed.
 

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