SUMMARY
The HC also granted interim injunction to Matrimony.com and termed the high commissions 'unconscionable’
Matrimony would be put to an ‘irreparable loss and hardship’ if it was delisted from Play Store for failing to ‘toe the line’ on Google’s new policy mandates, observed the HC
Google’s new payment mandates are a death-knell for Indian startups and the injunction a great relief, said Matrimony CEO
In a major blow to Google, the Madras High Court (HC) has temporarily barred the tech major from delisting Matrimony.com’s app from its Play Store until June 1.
In an order issued on April 24, the HC granted an interim injunction to the matrimonial platform and restrained Google from removing the app for non-compliance of its new user choice billing system.
This comes a few days after Inc42 reported that the Madras HC had granted interim relief to the platform. The startup’s subsidiary Bharat Matrimony had approached the HC, arguing that Google was forcing app developers to adopt the new billing system and was charging high commissions, even if the payments were routed through third-parties.
Terming the 11%-26% fee ‘unconscionable’, a single-judge bench of Justice S Sounthar observed that Matrimony would be put to an ‘irreparable loss and hardship’ if the startup was delisted from the app marketplace for failing to ‘toe the line’ on the new policy mandates.
“Therefore, the balance of convenience is also in favour of the applicant for grant of an order of injunction against delisting, till the respondents are heard,” the HC noted.
Hailing the order, Matrimony’s CEO Murugavel Janakiraman called the injunction a ‘great relief’.
“…Google forcing app developers to use alternative billing system or user choice billing along with its billing system and terming it as a new policy and charging App developers ridiculously high 11-26% on the revenue is unconscionable and not acceptable. We will continue to fight legally until Google stops its monopoly behaviour of taxing Indian startups,” Janakiraman added.
Terming Google’s new payment system a death knell for Indian startups, Janakiraman also said that the tech major was charging high service charges without providing any service. Lashing out at the US-based big tech, he added that Google was trying to circumvent the CCI’s October 2022 antitrust directives.
Speaking with Inc42 earlier this week, Janakiraman said that the matrimonial platform had built its case on the premise that Google violated provisions of the Payments and Settlement Act, 2007.
Leveraging Section 10A, the matrimonial platform argued that the PSS Act prohibited intermediaries from charging commissions on UPI payments. However, the startup contended that the new billing system flouted RBI rules and charged commissions from homegrown developers.
The Matrimony CEO had earlier also slammed Google and had termed the tech major a threat to Indian startups.
Google’s Legal Troubles Galore
The ruling could make matters worse for Google, which is already locked in another legal tangle with Indian startups in the Delhi High Court over the contentious billing mandates. The Delhi HC has also, more or less, sided with the startups and directed the competition watchdog to entertain the complaints of Indian startups to probe the payment system.
At the centre of the fracas is the new user choice billing system instituted by Google to comply with CCI’s antitrust directives The commission has fined Google INR 936 Cr for abusing its dominance with regards to Play Store policies and directed Google to undertake reforms and allow third-party payment processors for developers.
While the tech major charged companies 15-30% in the previous regime, it offered a rebate of 4% for those looking to use non-Google payment systems under the new policy. Fighting back, a clutch of Indian startups, including Matrimony, under the banner of ADIF, filed a case in the Delhi HC and sought to keep the new system in abeyance until CCI probed allegations of flouting of antitrust directives.
With the Madras HC backing Matrimony, Google has been left scrounging for ways to deal with the fallout of a flurry of legal cases. While the system was set to come into effect by April 26, developers were quoted as saying that the policy has not been implemented yet. Amid all this, Google has been left isolated in a market that it touts as one of its biggest.
