Justice Pratibha Singh recuses from the case filed by Indian startups seeking suspension of Google’s user choice billing system
The case will now be heard next week on April 18 by a new bench, just a week before Google’s new system comes into force
The plea claims that the new norms are a ‘cloaked version’ of the previous billing regime and are part of Google’s attempts to bypass CCI directions
In a day full of hectic developments, Delhi High Court Judge Pratibha Singh on Wednesday (April 12) recused herself from hearing a petition filed by a clutch of startups seeking temporary suspension of the tech major Google’s contentious user choice billing system.
While hearing a plea filed by the Alliance of Digital India Foundation (ADIF), with the backing of homegrown startups such as MapmyIndia, Paytm, Matrimony, and TrulyMadly, Justice Singh ordered the case to be heard by another bench, subject to the orders of the HC’s Chief Justice.
There was no clarity on what prompted the Justice to recuse herself from the case. The case will now be heard next week on April 18, just a week before Google’s new system comes into force.
Chief Justice of Delhi High Court Satish Chandra Sharma is now expected to assign a new bench to hear the case in the next few days.
During the course of proceedings on Wednesday, Justice Singh reportedly sought clarification on whether the matter was connected to the ongoing Google antitrust case pending before the National Company Law Appellate Tribunal (NCLAT).
In response, Google’s counsel said, “It is connected to the extent that one portion of activities was in the first order and the second portion will be (in the other order)…”
However, ADIF’s advocate argued that the facts of matter of both cases were different. Citing urgency of the matter, ADIF contended that Google was violating the competition watchdog’s October 2022 antitrust ruling through the user choice billing system, which is slated to be implemented later this month.
“The difficulty is that there is a policy, which is being implemented by Google, which is in violation with the CCI order, on April 26. This is in stark defiance of the CCI order, and that’s why there is a necessity of time,” added the digital advocacy group’s counsel.
Subsequently, Justice Singh, after hearing both sides, recused herself from the case and directed that a new bench will now hear the matter.
The Crux Of The Matter
This comes barely a couple of days after ADIF mounted a legal challenge against Google’s new billing policy in the Delhi HC. In its 744-page plea filed on April 10, ADIF urged the HC to keep in abeyance the implementation of the tech major’s user choice billing system till a probe is conducted by the Competition Commission of India (CCI) into the tech major for not complying with the antitrust directives.
The HC petition came close on the heels of a similar request made by ADIF to the competition watchdog last month, claiming that the tech major was charging high commissions from startups despite CCI directives clearly allowing the use of third-party payment services for in-app payments.
The mandates in question are from October last year when the competition panel in a sweeping order found Google guilty of abusing its market dominance in both Android devices market and with regard to its Play Store policies. As a result, the competition watchdog fined the US-based tech giant INR 1,338 Cr and INR 936 Cr in two separate penalties for engaging in anti-competitive behaviour.
However, while the hefty fines were part of the order, the CCI also mandated a slew of changes to Google’s policies in the country to comply with norms. The case in Delhi HC pertains to its Play Store policies and the app marketplace’s in-app billing system.
Prior to the directives, Google charged developers a fee of 15-30% and mandated the use of its in-app payments systems for almost all apps listed on Play Store. As the directives kicked in, Google announced sweeping changes to its policies and announced a new user-choice billing system, which allowed apps and developers to embed third-party payment systems.
Google’s new rules come into effect on April 26 and offer a rebate of 4%, charging startups in the range of 11-26%, despite ‘resentments’ and them shunning Google’s proprietary payment services. Google claims that the new commission rates will help support investments in the Android ecosystem and will cover costs associated with free distribution.
On the other hand, ADIF, in its plea, has argued that the new user choice billing norms are a ‘cloaked version’ of the previous billing regime and are part of Google’s attempts to bypass CCI directions.
The policy think-tank has termed the new system as projecting the ‘hoax of giving liberty to app developers to opt for third-party payment processors’. The plea also makes mention of inaction on account of CCI saying that the competition watchdog is yet to take note of ADIF’s many applications in the matter. Noting that the commission was yet to act on Google due to lack of quorum, ADIF contended that the market remains vulnerable to abuse of dominant position by Google due to this.
Google’s Many Battles In India
The antitrust ruling adds to a myriad of regulatory issues facing the tech giant in the country. While the Play Store saga unravels in Delhi HC, Google is also locked in a direct legal tussle with CCI in the Android antitrust ruling case. In the Android case, Google even knocked on the doors of the Supreme Court to quash the directives. However, the Apex court rejected the big tech giant’s plea and the matter is now straddling between NCLAT and reportedly other higher courts.
In the past, it has also faced heat from the Central government for failing to act on fake news and content take down orders. Besides, the big tech has also invited the ire of the Ministry of Finance, IT Ministry and the Reserve Bank of India (RBI) for its failure to curb the use of illegal digital lending apps especially on the Play Store.
Then there are a waft of central legislations recently introduced by the Union government, such as the data protection Bill or the new amendments to the IT law, which make these platforms liable for ‘safe internet’ and underline hefty fines for flouting these norms.
Then, there is the aspect of self-regulatory organisations (SROs) and appellate tribunals, which make the big tech giant answerable to all complaints raised by users. Further, it could also have run-ins with the law while implementing recent IT amendments, which empower central authorities to flag fake news regarding government bodies.
In addition, there are other legislations such as the Telecommunications Bill, the implementation of which could squarely impact platforms such as Google Meet, as the Centre has underlined plans to regulate OTT messaging apps.
Surrounding Google on another front appears to be a Parliamentary report on anti-competitive practices by big tech companies, which has squarely flagged players such as Google. The report sought the introduction of a new digital competition law to give more teeth to relevant authorities to govern the digital markets
Google appears to be dealing with a cocktail of resentment from startups, a plethora of regulations, restrictions and refusals, even as it looks to scale its presence in the country. The multi-front fight could present a challenge for Google, which is already facing bad press for reasons ranging from layoffs to renewed competition in the form of Microsoft. The world’s biggest market has thrown another monkey wrench in the path of the big tech giant that is already walking on a tightrope between regulations and operations in the country.
