OTT industry body, IDMIF, has shot off a letter to the competition watchdog, calling the commission charged by the tech giant unjustified
CCI has taken cognisance of the matter and has directed the industry body to submit a detailed report on the matter
IDMIF counts some of the biggest names in the OTT streaming space including Disney+Hotstar, Zee5, Voot, SonyLIV, among others
Mounting a multi-pronged challenge against Google’s contentious user choice billing system, some of the biggest names in the Indian OTT space have now reportedly moved the Competition Commission of India (CCI).
Sources told The Economic Times that the Indian Digital Media Industry Foundation (IDMIF), which comprises some of the biggest names in the homegrown OTT landscape, has shot off a letter to the competition watchdog. Calling itself an affected party, the industry body has called the commission charged by the tech giant ‘unjustified.’
IDMIF counts some of the biggest names in the OTT streaming space including Disney+ Hotstar, Zee5, Voot, SonyLIV, Manorama Max, SunNXT, Discovery+, among others.
Meanwhile, the CCI has taken cognisance of the matter and has directed the IDMIF to submit a detailed report on the issue. The industry body is said to be already working on a response on the directions.
Inc42 has reached out to Google for a comment. This story will be updated with the response when it is received.
As per the report, the letter to CCI states that the new user choice billing system could mean the end of ‘business operation for smaller TV channels and OTT players’, especially in the content curation space. In response, the CCI has asked IDMIF to submit the evidence with regards to this claim.
“They are doing that while also telling the court that they should be made a party to the ongoing case,” a person familiar with the development said.
Curiously, the development comes barely days after streaming giant Disney+Hotstar received a temporary injunction from Madras High Court that barred Google from delisting the streaming app from the Play Store.
Google’s Way Fraught With Challenges
Disney+Hotstar’s challenge marked a major shift in the legal tussle against the tech major as it became the first non-India OTT players to contest the new billing mandates. At the heart of the matter is the CCI’s October 2022 antitrust order that penalised Google INR 936 Cr.
The order also directed the tech major to undertake sweeping reforms within the operations of its app marketplace. Previously, Google charged app developers 15-30% for listing on Play Store and using its in-house payments systems.
After the CCI order, the company announced a new payment system under which developers were offered a rebate of 4%, and had to effectively pay commissions in the range of 11-26% to the tech giant.
When the mandates were announced, Indian startups quickly approached various Courts across the country including Delhi and Madras HC to seek injunction on the new commission slabs.
The startups that have so far approached the Madras HC include Bharat Matrimony, Unacademy, Kuku FM, TrulyMadly and QuackQuack. These players have received an injunction from the Madras HC, which bars Google from delisting their apps and temporarily caps commission payable to the tech major at 4% on the gross revenue generated via the Play Store.
Besides, local players such as streaming startup Altt, audiotech platform Pratilipi, and Tamil publisher Ananda Vikatan, have also moved the Court seeking relief from the new billing mandates from Google.
As per the report, the streaming platforms have moved the Court over concerns around Google offering web-billing as a payment option for OTTs. Critics believe that while big players have the leeway and customer traction to leverage such a move, smaller Indian players may bear the brunt of customer attrition as the users may not be well-versed with the idea of web-billing.
Indian startups fear that users would rather opt for in-app purchases, which would be liable for heavy commission and hurt their revenues.
With the ball now in CCI’s court, it remains to be seen what the competition watchdog decides. For now, Google continues to face fresh headwinds as it looks to move ahead with the implementation of its contentious user choice billing system.