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Google asks Karnataka High Court to quash CCI order in relation to Play Store probe

At the centre of the probe is Google’s new billing policy which kicked up a storm in India when it was first announced.

Google has filed a writ petition in the Karnataka High Court asking it to quash the December 14 order issued by the Competition Commission of India (CCI), LiveLaw reported on December 27, 2021.

CCI’s order, which sought a response from Google by December 31, was prompted by a plea filed by the Alliance of Digital India Foundation (ADIF) in October seeking interim relief from Google’s new billing policy. In the same order, the Commission also rejected the company’s request to reveal the identity of app developers and start-ups on whose behalf ADIF filed the plea.

“We have filed a writ in Karnataka High Court regarding the interim relief application in the Google Play probe by the CCI, seeking to move forward in line with established due process principles. We respect the CCI’s investigative process and will continue to engage cooperatively and constructively in the interest of a fair investigation.” — Google spokesperson to ET

CCI on December 29 submitted an oral statement to the Court saying that no precipitative action will be taken against Google until the next date of hearing, which falls on January 5, 2022.

What does Google argue in its petition?

  1. No urgency since billing policy delayed: In its petition, Google argued that there is no urgency in the matter since the company has voluntarily delayed the new billing policy to October 2022 instead of March 2022, the report said. Furthermore, Google argued that since ADIF filed its plea one year after the billing policy clarification was announced, “ADIF itself has disproved any notion of urgency in approaching the Commission for interim relief measures.”
  2. Identity of the complainants: Google has asked for the identity of the complainants to be disclosed in order for the company to respond adequately, the report added. While ADIF filed the plea, the names and identities of app developers and start-ups who had provided evidence were redacted as per instructions of the CCI. Google’s petition argues that this violates principles of natural justice because it denies the company the right to know the identity of people who claim to be irreparably harmed by its practices.”Forcing the Petitioners to defend the ADIF IR Application blindfolded cannot comport with natural justice, such restraint is premised on mere speculation that the Petitioners would retaliate against the complainants, a theory the Commission adopted without any reasoned order or hearing” — Google petition

ADIF response to Google petition

In a statement to Business Standard, Sijo Kuruvilla George, the executive director, ADIF, accused the company of delaying the probe:

“The only commitments that have been consistent on the part of Google throughout this entire antitrust process has been their commitment to a) delay the process in every way possible and b) protecting their super profits from the app economy (by) abusing its dominance. We exhort Google to comply with the antitrust process in good faith and as per the directives of the CCI.”

What is the new billing policy?

According to Google, there is no real change in policy, but rather a clarification on the applicability of its billing rules. In its blog post published in September 2020, the company said:

“We’ve always required developers who distribute their apps on Play to use Google Play’s billing system if they offer in-app purchases of digital goods, and pay a service fee from a percentage of the purchase. […] We want to be sure our policies are clear and up to date so they can be applied consistently and fairly to all developers, and so we have clarified the language in our Payments Policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play’s billing system.” (emphasis ours)

Google likely issued this clarification because many apps, particularly gaming apps, used alternative payment systems and avoided paying commission to the company because of loose wording in the policy and lack of strict enforcement by Google.

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What is CCI investigating?

Google’s update to its Play Store billing policy kicked up a storm in India as many start-ups and developers objected to the high rate of commission. Bowing to pressure, Google deferred the enforcement of its billing system policy to March 2022. Notwithstanding this, start-ups approached the Competition Commission of India (CCI), which ordered a detailed investigation into the Play Store in November 2020.

In launching its investigation, the CCI said that there was prima facie evidence that Google may be abusing its dominant position in India, with regards to Play Store’s exclusivity and Google Pay services. It ordered an investigation into the following aspects of Google’s practices:

  • High commissions 
  • Exclusivity regarding the choice of payment systems for app purchases
  • Preference to Google Pay for payments
  • The advantage gained from data collection

Separately, CCI also launched an investigation into Apple App Store on December 31, 2021.

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