NCLAT Seeks Response from Google and CCI on Play Store Billing Policy Dispute
Following the recent appeal by two startups, Kuku FM and Shaadi.com, against the Competition Commission of India’s (CCI) ruling, the National Company Law Appellate Tribunal (NCLAT) has directed Google and the CCI to provide responses regarding the contentious Play Store billing policy. The startups contested the CCI’s decision to uphold Google’s user choice billing system, which permits the delisting of apps that do not comply with it. Additionally, the Indian Broadcasting & Digital Foundation has also lodged an appeal related to this matter. The NCLAT is set to review this issue further on May 24.
The dispute stemmed from Google’s introduction of the User Choice Billing (UCB) system in 2023, which imposed service fees ranging from 11% to 26% on paid app downloads and in-app purchases via the Google Play Store. Developers were also given the option to utilize third-party billing systems instead of Google’s payment system. Mebigo Labs Pvt Ltd, the parent company of Shaadi.com, and KuKu FM, along with other entities such as the Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMTIF), have sought interim protection from Google’s service fees until the CCI concludes its investigation into the policy.
The startups urged the NCLAT to instruct Google to refrain from charging service fees until the next hearing but were denied interim protection. In March, Google removed certain apps like Bharat Matrimony due to disagreements over service fees for in-app charges. Subsequently, the developers approached the CCI, which declined to make any alterations, citing insufficient evidence provided by the startups to warrant immediate action.
Companies challenging the CCI’s ruling argued that the order disregarded crucial facts and evidence. They asserted that the new user choice billing system essentially replicated Google Play’s existing billing system. Zeeshan Farooqui, Partner at King Stubb & Kasiva, Advocates and Attorneys, emphasized the significance of the upcoming NCLAT appeal hearings, stating that they hold the potential to either validate or annul the existing CCI directive. Given the substantial impact of competition litigation on business operations, the appeal hearings are critical, particularly concerning ongoing discussions between Google and emerging startups regarding service fee arrangements.
In summary, the NCLAT’s directive to Google and the CCI underscores the ongoing dispute over Google’s Play Store billing policy, with startups challenging the imposition of service fees and advocating for interim protection until the matter is resolved through further legal proceedings.
