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    ETtech Explainer: How complaints by Indian startups against Google question CCI’s adjudicatory authority

    Synopsis

    The Alliance of Digital India Foundation (ADIF) approached the Delhi HC in a matter pertaining to Google's new in-app purchase billing system. However, the issue quickly evolved into ascertaining whether India’s competition watchdog, given its lack of quorum, could take up the complaints.

    DELHI HC TO HEAR ADIF CASE VS CCI, GOOGLE_Google Play store_THUMB IMAGE_ETTECHETtech
    Earlier this month, the Alliance of Digital India Foundation (ADIF) approached the Delhi High Court, seeking its intervention into complaints that the startup industry body filed with the Competition Commission of India (CCI) against Google. The matter was pertaining to the tech giant’s new in-app purchase billing system.

    However, the issue quickly evolved into ascertaining whether India’s competition watchdog, given its lack of quorum, could take up the complaints.

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    ADIF’s complaint: The group, representing startups such as Paytm, MapmyIndia, Matrimony, TrulyMadly, wrote to the CCI thrice – on January 31, March 6 and March 28 – this year urging the regulator to look into Google’s user-choice billing (UCB) policy.

    What are the allegations? ADIF alleged that by implementing UCB, Google was engaging in anticompetitive conduct. As per ADIF, Google’s policy on charging commission to app developers could “take away a huge chunk of the revenue made by Indian app developers and startups, and would render business models of many young companies unviable, especially the ones relying on in-app purchases, paid apps or subscriptions''.

    What is Google’s policy: Following two orders by CCI in October last year against how Google ran its Android mobile operating system, the company had announced it was introducing around five changes to the way it operates Android and Google Play billing in India.

    Among these was a step to expand user choice billing to all developers. Later in February, the company told developers they have till April 26 to comply with the new Google Play payments policy, which permits alternative billing options.

    What’s the new policy? Under the new policy, users would have a choice in making in-app purchases using Google’s own billing system, or through other methods like UPI, net banking, wallets, among others. However, non-Google payment options would attract 11-26% commission.

    Plea in Delhi High Court: After having approached the CCI thrice in three months, the ADIF filed a petition in the Delhi High Court asking the courts to order the antitrust watchdog to take up its complaints before April 26. At the root of this case was the fact that CCI has only two members since its chairperson Ashok Kumar Gupta retired in October. As per the Competition Act, a quorum of at least three members is needed for the regulator to adjudicate on antitrust matters.

    The proceedings: The single-judge bench of the court ordered there was “no impediment, legal or otherwise, in directing the CCI to take up the applications” under the Competition Act. The order also noted that merely because “of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it”.

    What’s next? Even as Google has appealed the matter before a division bench of the Delhi High Court, the competition watchdog has taken the matter up and has asked the parties to submit relevant documents to put forth their arguments. It is noteworthy that Google brought in the UCB system after its mandatory deployment of Google Play Billing System (GPBS) for developers was considered anti-competitive by the CCI. The ADIF, however, alleges that UCB is Google’s way of implementing GPBS in a different way. Google, on the other hand, has said that it has “fully complied with the CCI’s order” issued in October.
    The Economic Times

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