App War: Startups Get A Breather, As Google Defers Delisting

Tech Giant Google assures Madras High Court that it will not delist the startups, who have challenged its in-app billing policy, from its Playstore until August 18, 2023.

In a recent development, multinational technology giant Google given an undertaking to the Madras High Court that it will refrain from removing mobile applications of startups contesting the in-app billing policy from its Play Store until August 18, 2023. This move comes as the court has granted its consent to hear petitions filed by these startups, which challenge a prior single-judge bench ruling dismissing their grievances against Google's Play Store policies.

Google’s Undertaking to the Court

The search engine behemoth, renowned as the world's largest search giant, has presented a formal undertaking to the court, signaling its commitment to retaining the startups on the Play Store during the ongoing legal proceedings. The court, in return, has convened a two-judge bench that issued a notification to Google, setting a hearing for the startups' pleas concerning interim orders on August 18.

Legal Representatives and Background

Senior advocate Sajan Poovayya, representing Google, conveyed to the court that the company intends to submit a response explaining the grounds on which an interim order should not be granted to the startups. On the opposing side, the startups were represented by senior advocate and former finance minister P Chidambaram.

The appeals being heard are in response to the dismissal of 14 out of 16 pleas from startups and technology firms, including prominent names like Bharat Matrimony, Shaadi.com, and Unacademy. These companies contested Google's app billing policy through their petitions.

Jurisdiction and Competition Commission of India (CCI)

The court has determined that the matter falls within the purview of the Competition Commission of India (CCI). The remaining two pleas, filed by streaming service Disney+ Hotstar and exam preparation app Testbook, are also anticipated to be dismissed in due course.

The court's reasoning is rooted in the startups' allegations of Google's abuse of its dominant market position. As such, the court contends that the CCI should be entrusted with the responsibility of deciding on the issue. The CCI possesses the authority to direct any enterprise found guilty of abusing its dominant position to cease such practices, ensuring that any subsequent orders are applicable to all relevant businesses.

However, it is noteworthy that, in the ongoing proceedings, the scope of such an order would be confined to the particular company challenging Google's policy.

Order in Response to Google's Application

This course of action was prompted by Google's application under Order 7 Rule 11 of the Civil Procedure Code (CPC), 1908. The application argued that the suits filed by the startups lacked grounds for legal pursuit. Google further argued that given its headquarters' location in California, USA, these matters should be litigated in the US. The company contended that a civil court's jurisdiction was inadequate, given the allegations of anti-trust violations involved in the dispute.

The Petitioners and Earlier Injunction

The petitioners in this case comprise a range of startups and industry entities, including KukuFM, TrulyMadly, QuackQuack, Pratilipi, Crafto, Tamil publisher Ananda Vikatan, and streaming services such as Altt, Stage, and Aha. Also represented is the Indian Digital Media Industry Foundation, which advocates for notable streaming services like Zee5, SonyLIV, and SunNXT.

Earlier in the litigation process, the court granted an interim injunction favoring these companies, instructing them to remit a reduced 4 percent fee to Google for utilizing its in-app payment system. Additionally, the court directed Google not to remove any of these entities from the Play Store.

This injunction was triggered by the petitioners' challenge against Google's notice, which stipulated the adoption of the new app billing policy or the risk of delisting from the app marketplace. Google had previously announced its intent to enforce the Play billing policy in India in May 2023.