Madras HC Restricts Google From Delisting Apps Of Indian Startups

SUMMARY

The Madras HC’s interim order will be applicable if the startups pay 4% of the gross revenue of the downloads from Play Store to Google

As per the order, the startups will also have to share data with the tech giant on the 15th of every month

Earlier this month, the HC dismissed 14 of the 16 petitions filed by homegrown players against tech major Google’s new user choice billing system

In a relief to Indian startups, a division bench of Madras High Court on August 18 passed an interim order restraining Google from delisting apps of a number of startups from its Play Store.

The interim order would be applicable if the startups pay 4% of the gross revenue of the downloads from Play Store to Google and share data with the tech giant on the 15th of every month.

Earlier this month, the Madras HC dismissed 14 of the 16 petitions filed by homegrown players against Google’s new user choice billing (UCB) system.

The pleas filed by startups such as Matrimony, Shaadi.com, Unacademy, Kuku FM, TrulyMadly, QuackQuack, Aha, Stage, and Kutumb, among others, were dismissed.

The HC ruled that the cases fell under the Competition Commission of India’s (CCI’s) jurisdiction and the lawsuits were barred by Section 61 of the Competition Act. The court emphasised that the remedies available under the Competition Act were ‘more comprehensive than that before a civil court’.

In the past, the HC barred Google from delisting homegrown players from its Play Store for not complying with the tech major’s contentious UCB policy till the matter was decided.

The conflict started in October last year when the CCI slapped a fine of INR 936 Cr on Google for abusing its dominance in the app marketplace segment. The competition watchdog flagged the Google Billing and Payments System (GBPS), which levied 15-30% commissions on developers and companies.

Subsequently, Google introduced a new commission structure offering a rebate of 4%, effectively setting the stage for 11-26% commission rates. Aggrieved by this, Indian startups approached the Delhi and Madras HCs and sought to keep the new payments system in abeyance until the CCI looked into the billing policy.

Other than Indian startups, international streaming platform Disney+Hotstar has also challenged the new billing policy before the courts. The Madras HC reportedly directed the streaming giant to pay 4% commission to Google and also warned the OTT player that it could lose its interim protection against delisting from the Google Play Store if it failed to comply with the order.