The Madras High Court has reserved its order regarding the suit against Google’s billing policy. The court proceedings took place on Tuesday. The court is yet to deliver its final decision on the matter.
In April, Bharat Matrimony, Shaadi.com, and other companies challenged Google’s billing policies. They sought to prevent their delisting from the Google Play Store. Unacademy, Kuku FM, TrulyMadly, QuackQuack, Aha, Stage, and Kutumb also filed similar suits. The startups believe Google’s billing policy is unfair.
Google’s counsel, PS Raman, argued that a commercial court could not decide payment amounts. Raman stated that even the Competition Commission of India cannot regulate the payment determination.
Raman informed the court that Indian startups have a contract with Google Asia Pacific. He stated that Google LLC could not be included in the matter due to the agreement. The agreement determines the applicable Google authority based on app distribution.
Raman emphasized that Google Asia Pacific is the relevant authority in this case. The tech giant argued that startups complain about its 96% market share.
They earn significant profits by distributing their apps on the Play Store. Raman pointed out that some startups are multi-billion-dollar companies.
They cannot claim unfairness in their contract with Google based on the company’s strength.
Alligations by the Startups
The startups argued that Google could modify the contract by introducing new billing policies.
They stated that courts can impose limitations when one party chooses both. Previously, the court required the startups to submit a report on their June downloads to Google. They were also instructed to pay a 4% commission to Google on Play Store revenue.
Google received directions not to delist companies that filed suits against it. These directions will remain in effect until the high court delivers its verdict. The startups believe Google can alter the contract. Courts have ruled in favour of limiting such unilateral choices in the past.
The court is currently considering these arguments and submissions.
Commission Structure
Under the previous regime, Google used to charge app developers a commission of 15-30%. The commission was for listing on the app marketplace and using the proprietary payments system.
After facing CCI penalties, Google introduced a revised user choice billing system. However, it still imposed commissions ranging from 11-26% on startups, regardless of their billing system. Indian startups filed cases in the Madras High Court and the Delhi High Court.
Their objective was to prevent Google from implementing the new policy. The Madras HC directed startups to pay a reduced commission of 4% to Google. The payment was based on the gross revenue generated via the Play Store.
The court also warned against app delisting. Google has challenged the CCI’s penalty ruling in the Supreme Court.
CCI Penalty
In October last year, the CCI imposed a penalty of ₹936.44 crore on Google for abusing its dominant position. This penalty relates to Google’s Play Store policies. The CCI issued a cease-and-desist order and instructed Google to modify its conduct within three months.
Google had previously been fined ₹1,337.76 crore for similar violations.
The CCI directed Google to allow app developers to use third-party billing services. They also demanded a clear and transparent policy on data collection and sharing. The CCI noted inconsistencies and disclaimers in Google’s revenue data presentation.
Google used to require app developers to exclusively use GPBS for payments in the Play Store. App developers couldn’t provide direct links or encourage alternative payment methods within the app. Non-compliance with Google’s policy resulted in app developers losing potential customers on the Play Store.
Google’s policy mandated the use of GPBS for both app payments and certain in-app purchases. Developers who don’t use GPBS cannot list their apps on the Play Store. Android users are a significant customer base that developers would miss out on.
