CCI Rejects Indian App Makers' Plea Against Google's Billing Policy

It seems that Indian startups, whose apps are listed on the Google Play Store, will have to shell more money from their pockets to continue billing through the tech giant's platform. 

In a significant setback for Indian app makers, the Competition Commission of India (CCI) declined their plea for interim relief against Google concerning the contentious Play Store billing policy. The decision, made on March 20, follows closely on the heels of another ruling by the CCI on March 15, which found Google's User Choice Billing (UCB) system to potentially breach the Competition Act, 2002.

Investigation Ordered

The CCI not only rejected the plea but also directed the Director General (DG) to conduct an investigation into Google's billing policy. The DG has been instructed to complete the investigation and file a report within 60 days.

In its order, the CCI cited that the app makers failed to demonstrate irreparable harm resulting from Google's conduct that couldn't be remedied through monetary compensation. The Commission also found the balance of convenience not in favor of the app makers.

The CCI Order Date March 20, 2024 says:

 "....the Commission has been prayed to restrain Google from collecting any fee for transactions involving paid downloads or in-app purchases on apps offering digital products / services. While there may be concerns about the fairness of Google's fee structure as outlined by the Commission in its prima facie order dated 15.03.2024, it is essential to recognize the costs and responsibilities associated with maintaining and operating app stores. In relation to this relief, Google has submitted Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 8 that grant of the same would virtually amount to requiring Google to offer Play for free to developers in India. No other court or regulator has passed a similar relief despite repeated requests. This recognises that Google cannot provide its platform without any consideration, especially when developers continue to charge their users for digital in-app purchases and enjoy the services of Play.

While it is essential to ensure a level playing field and protect competition within the app store market, any measures taken should be proportionate and carefully crafted to minimize unintended consequences and preserve the overall integrity and functionality of the platform ecosystem. Based on the foregoing, the Commission is of the view that the Informants have not been able to demonstrate a case in their favour for grant of interim relief for complete restraint on Google from collection of its fee.

The Commission is further of the view that the Informants have also failed to meet the necessary criteria for grant of interim relief as propounded by the Hon’ble Supreme Court. The Informants have not been able to project any higher level of prima facie case warranting a positive direction as sought for by the Informants at the interim stage. The Informant has also not been able to demonstrate as to how the impugned conduct would result in irreparable harm that cannot be remedied through monetary compensation. The Commission is also not persuaded that balance of convenience lies in favour of the Informants.

Viewed in the aforesaid backdrop, the Commission is of the considered opinion that no case whatsoever has been made out by the Informants which warrants grant of interim relief. Resultantly, the applications stand dismissed."

Plea by Indian App Developers

The plea was filed by a group of Indian app developers, including Shaadi.com and Kuku FM, alleging that Google violated the CCI's October 2022 order with its new payment policy.

Google's Authority Upheld

With the CCI's decision, Google retains the authority to delist apps of Indian digital companies from the Play Store if they do not comply with the payment policy.

Forum for Resolution

In response to the ongoing dispute, a forum has reportedly been established between Google and prominent Indian app developers to seek a long-term solution within the next 120 days, following government intervention.

Background: Supreme Court's Involvement

Previously, Google delisted over 100 apps for non-compliance, leading to legal battles. Despite the Supreme Court's refusal to pass an interim order protecting these firms, it has agreed to hear the matter in the future.

Google's User Choice Billing System

Introduced in 2023, Google's User Choice Billing system aimed to comply with the CCI's order. However, concerns persist among local internet firms regarding its fairness, particularly regarding service fees.

CCI's Observations

In its March 15 order, the CCI criticized Google for imposing unfair prices on app developers, hindering market growth and curtailing developers' freedom to choose business models.

Google's Response

Google, while asserting compliance with local laws, stated its commitment to cooperating with regulatory processes.

Earlier CCI Order

In October 2022, the CCI fined Google for abusing its dominant position and directed corrective measures regarding Play Store policies. Google is currently appealing against the fine.

As the dispute unfolds, the future of app billing policies and the relationship between tech giants and app developers remain under scrutiny.

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