CCI Can Look At Google's New Billing Policy, Says Delhi High Court

The Competition Commission of India can invoke the doctrine of necessity to examine if tech major Google's Play Store service fee is anti-competitive.

The high court ruling has come on a petition filed by the Alliance of Digital India Foundation against the new billing system introduced by Google.

"The CCI has no impediment to hear the matter and look into Google's policy before or on April 26, 2023," the bench said.

Responding to the order, ADIF said that CCI must adjudicate on the new billing policy by April 26. "If the regulator is in the process of adjudicating on it and doesn't come to a conclusion by April 26, it should keep the policy in abeyance. If they don't keep it in abeyance, they will be in violation of the high court order of today."

Indian startups, represented by AIDF, had approached the Delhi High Court against Google’s new User Choice Billing System. This in-app billing system is supposed to go on the floors from April 26.

Under the new policy, 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%. ADIF contended that it's unfair that developers are being asked to pay such a high service fee, even though they aren't using the Google Play Billing System. The new billing policy is no better than the previous commission regime of 15-30%, the foundation argued.

ADIF sought that the CCI should look at the new billing policy by invoking the doctrine of necessity as the regulator does not have a requisite quorum currently. If the same cannot be done, then status quo should be maintained, it said.

On the other hand, Google has maintained that 97% of developers distribute their apps via Google Play Store 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.

Google had earlier submitted before the court that this petition does not justify invoking the doctrine of necessity. ASG N Venkatraman submitted on behalf of the CCI that the appointment of new member in the quorum is under process.

In October last year, Google was found to be in violation of competition laws by the CCI. Resultantly, a penalty of Rs 936 crore was imposed on the tech giant and certain behavourial directions were passed against it.