Madras HC To Disney+ Hotstar: Pay 4% To Google Or Lose Protections From Delisting

In a stern warning to Disney+ Hotstar, the Madras High Court (HC) has reportedly directed the streaming giant to pay 4% commissions to Google as legal proceedings play out over the tech major’s contentious user choice billing system. 

Sources told The Hindu BusinessLine that the HC also warned the OTT player that it could lose its interim protection against delisting from the Google Play Store for failure to comply with the order. Meanwhile, the HC has posted the matter for further hearing on August 16. 

In an order last month, the HC barred Google from delisting Disney+ Hotstar’s app from Play Store on a petition filed by the former. The court had also directed the streaming player to pay a lower 4% commission on in-app payments each month to Google as an interim arrangement.

So far, Disney+ Hotstar is yet to pay the amount to the tech giant. 

The new warning comes a month after the streaming player, following the suit of a dozen Indian startups, filed a petition before the Madras HC in July, seeking protection from the enforcement of Google’s new billing policy and ‘coercion’ to enrol’ in the new payments system. 

Since then, a series of directives from the court has favoured the big tech giant in the user choice billing system. Earlier this month, the HC dismissed 14 of the 16 petitions filed by Indian startups in the matter. Meanwhile, the court is yet to take a call on the petitions filed by Disney+ Hotstar and edtech platform Testbook. 

With the newest order, the streaming platform could be forced to shell out commissions to Google as per the July order. Disney+ Hotstar will also be required to furnish monthly financial information so that Google can charge commissions on the streaming player in a timely manner. 

Disney+ Hotstar has been one of the few non-local players that has actively challenged the new billing policy before the Courts. The OTT giant, through the industry body Indian Digital Media Industry Foundation (IDMIF), also moved the Competition Commission of India (CCI) last month to term the commission charged under the new billing mandates ‘unjustified.’

The saga erupted in OCtober last year after the competition watchdog found Google guilty of abusing its dominance with regards to its Play Store and imposed a fine of INR 936 Cr on the search giant. The CCI also directed the tech major to undertake sweeping changes to its existing Google Billing and Payments System (GBPS), which charged developers commissions in the range of 15-30%. 

The aftermath saw Google introducing the UCB system which reduced the commissions by 4% to 11-26%. Quickly afterwards, a clutch of Indian startups moved various Courts challenging the validity of the new payments system citing contravention of CCI’s October order.

As Google warned developers that they would be delisted from Play Store for not opting for the new system, 16 companies, largely startups, operating in India moved Madras HC seeking an injunction. Eventually, 14 pleas were rejected even as the HC contended that the matter lay within the ambit of the CCI. 

While the implementation of the UCB policy has been stalled due to various legal proceedings, all eyes are now on HC. WIth the HC set to take a call on Disney+ Hotstar and Testbook’s petitions, it remains to be seen whether Google finally receives some respite or if it opens another Pandora’s box for the tech major.