The National Company Law Appellate Tribunal (NCLAT) is set to resume on September 10-11 its final hearing on Google’s appeal against the Competition Commission of India’s (CCI) ₹936 crore penalty. The tech giant was penalized in October 2022 for allegedly abusing its dominant position through restrictive billing practices on Google Play Store.
The CCI’s order required Google to permit third-party billing systems, effectively breaking the monopoly of the Google Play Billing System (GPBS). The NCLAT’s principal bench has scheduled the appeal for continued arguments, as per a recent order, following a request from Google’s counsel.
Google, facing a hefty fine and strict directives from CCI, initially challenged the decision in January 2023. However, the NCLAT did not provide any immediate relief, setting the stage for final arguments in April 2023. Google subsequently approached the Supreme Court for intervention but withdrew the appeal shortly after.
This case marks Google’s second major regulatory challenge in India, following the Android case, where similar penalties and directives were imposed for anti-competitive conduct.
Billing differences
The core issue in the Play Store case is Google’s mandatory use of GPBS for app payments and certain in-app purchases. The CCI deemed this an unfair imposition on app developers, violating competition laws. Furthermore, Google’s “anti-steering” provisions, which prevent developers from directing users to alternative payment methods outside the app, were also ruled anti-competitive.
In response to the CCI’s directives, Google introduced a User Choice Billing (UCB) system in India in 2023, allowing developers to use alternative billing options. However, UCB transactions incur a maximum service fee of 26 per cent, which is only slightly less than the 30 per cent incurred earlier, leading to dissatisfaction among Indian developers.
Between April and June 2023, 16 Indian startups filed petitions against Google, citing the high service fees under the UCB system as a continuing barrier to fair competition. Matters escalated after Google delisted over 100 apps from prominent domestic developers such as Matrimony, Shaadi.com, Kuku FM, and Info Edge, citing non-compliance with its billing policy. This prompted government intervention, forcing Google to temporarily reinstate the apps on Play Store.
As the NCLAT gears up for what could be a decisive hearing, the outcome could significantly impact Google’s operations and its approach to app store policies in India. The tech giant remains under scrutiny as stakeholders await a ruling that could reshape the competitive landscape of India’s digital ecosystem, economy watchers said.
