Google's New Payment Policy: Delhi HC Asks CCI To Take Up Plea By April 26

The Delhi High Court on Monday asked the Competition Commission of India (CCI) to decide on the plea by the Alliance of Digital India Foundation (ADIF) against Google’s billing policy on or before April 26.

The ADIF, which represents a group of digital start-ups, had filed a petition to suspend Google’s new in-app billing fee system, called the User Choice Billing (UCB) system, until the CCI investigates the tech giant for alleged non-compliance with its directives. The group alleged that despite the antitrust watchdog’s directive, which required Google to allow the use of third-party billing services for in-app payments, the UCB system would charge a high service fee.

It is to be noted that Google is looking to implement its UCB policy from April 26.

The ADIF approached the high court earlier this month with the grievance that the antitrust regulator had failed to act on its application concerning the new payment policy owing to a lack of quorum. Under the Competition Act, the quorum for CCI meetings requires at least three members to be present.

"There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 (contravention of CCI orders) of the Act, as filed by the petitioner, for hearing and considering the same in accordance with the law on or before April 26. Accordingly, the petition stands disposed of in the above terms," Justice Tushar Rao Gedela stated.

The court noted that any vacancy or defect in the constitution of the CCI would not invalidate any proceeding as far as its adjudicatory powers are concerned, and according to Additional Solicitor General N Venkataraman, the CCI was constituted in accordance with the provisions of the Competition Act and was very much functional and carrying out adjudicatory functions.

“Merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. Any interpretation, other than the aforesaid, would render the provisions of Section 15(Vacancy not to invalidate proceedings of Commission) otiose and which could not possibly be the intention of the Legislature either,” it said.

The court had reserved its orders in the case last Wednesday.

The ADIF, which represents start-ups such as Paytm, Matrimony, TrulyMadly, and MapmyIndia, submitted that under its UCB policy, Google would be charging a service fee of 11 per cent or 26 per cent in case of third-party payment processors, which is anti-competitive and an attempt to bypass an order of the CCI.

The court was informed that in October last year, the CCI, while imposing a penalty of Rs 936 crore on Google, asked it to allow and not restrict app developers from using any third-party billing service and to not impose any discriminatory condition.

The petitioner contended that the CCI must invoke the "doctrine of necessity" and look into the matter as a refusal to intervene will cause irreversible harm to it and other app developers, and lead to distortion in the market.

The implementation of the policy, in the meantime, must be kept in abeyance until the matter is looked into by the anti-trust regulator, the petitioner appealed. Google opposed the petition on several grounds, including that since there were only two members and the chairperson was yet to be appointed, the CCI was incapable of adjudicating the application filed by the petitioner.

The case pertains to a Google Play Store policy that requires all app developers to only use Google Play’s billing system (GPBS) to charge customers. GPBS was not only used for receiving payments from apps but also for in-app purchases.

After Google started charging a 30 per cent commission in 2020 for Play Store transactions, some app developers filed a complaint with the CCI, prompting the action.