Responding to appeals by startups such as Bharat Matrimony, audiobook platform Pratilipi, and ed-tech platform Unacademy, the high court ruled that the issue falls under the jurisdiction of the Competition Commission of India (CCI), and as such, any decision taken by the antitrust watchdog will be binding upon all parties.

Appeals filed by Disney+ Hotstar and edtech platform Testbook are yet to be decided upon.

Industry body Alliance of Digital India Foundation (ADIF), which led the appeals against Google’s Play Store’s billing policy, will appeal the high court decision to its division bench, said Ajay Data, secretary general of ADIF.

Startups who filed petitions against Google also confirmed plans to appeal the verdict.

A senior executive at one of the companies said if Google Play’s billing policy is enforced in its present form, it will “make a very significant hit on our bottom lines.”

“It isn’t just about the financial hit—Google’s Play billing interface’s user experience design is detrimental to recurring subscriptions. Internal experiments run by us have seen returns to subscriptions reduce 10x by using Google’s own billing system, versus our own custom-designed payment interface,” the executive said.

Another executive at a fellow appellant company said, “The 4% discount on third-party billing has no significance, since Google is anyway collecting 26% as its own platform fee, and any third-party vendor would still collect at least 2% as their usage fee. This leaves us at a loss on all grounds.”

All of the appellants claimed that Google’s platform fee is high. Lawyers, however, said neither a civil court nor the CCI has jurisdictions to dictate the platform fee that a corporate firm may charge for providing a service. Google had earlier argued that startups earn significant profits by using the Google Play Store marketplace’s user base with industry estimates pegging the Play Store to reach over 2.5 billion users.

Google also controls nearly 96% of the Indian smartphone market of nearly 700 million users as of June, as per a Counterpoint Research estimate.

This highlights the strong power Play Store holds for companies offering their services through apps on the Android platform.

On 10 April, industry body Alliance of Digital India Foundation (ADIF), along with a number of startups, approached the Delhi High Court—seeking an injunction against Google’s new Play Billing policy. The companies had argued that Google’s revised commission rates, as part of the company’s new Play Store billing policy in the country, are in contravention to the Competition Commission’s October 2022 verdict that fined Google a cumulative ₹2,337 crore.

In its Thursday verdict, a copy of which was seen by Mint, the Court said that companies must seek recourse from the CCI itself. A senior lawyer with knowledge of the matter said that the verdict was largely expected due to Section 61 of the Competition Act, which forbids civil courts from hearing any lawsuit that CCI is authorized to decide on.

Appeals filed by Hotstar and ed-tech platform Testbook are yet to be decided upon.

Two legal experts who spoke on condition of anonymity said that the verdict was largely expected.

“The ADIF and startups’ appeal against Google got a temporary injunction since they involved the Reserve Bank’s payments policy, which misled the Court last month. The verdict is in line with what any civil court would adjudge, since the entire matter lies with the Competition Commission,” one of the lawyers told Mint.

The second lawyer said that the verdict essentially represents a temporary defeat for the startups, further adding that a more favourable verdict would have been for the Court to have directed the CCI to expedite its process.

To be sure, the CCI said on 12 May that it is inquiring into Google’s Play billing policy, in terms of whether the latter is not compliant with CCI’s original order against Google.

A senior official with knowledge of the matter told Mint that while the CCI has conducted an examination of the matter, the verdict on compliance lies in balance due to administrative issues.

“The CCI chairman was appointed after the Delhi HC ordered CCI to expedite its inquiry into the matter, and the three-member committee is also set to see two retirements in the coming months. This has raised administrative difficulties into executing the inquiry order, thus leaving multiple parties in the balance at the moment,” the official said.

Updated: 04 Aug 2023, 11:07 PM IST