Delhi High Court in Google vs. ADIF: Refuses to Stay on Google’s New Billing System

Delhi High Court in Google vs. ADIF: Refuses to Stay on Google’s New Billing System

The Delhi High Court has refused to grant interim relief to the Alliance of Digital India Foundation (ADIF), which sought the suspension of Google’s new user choice billing system. The Court had directed the parties involved to file additional submissions before it and shall hear the plea on 19th April, 2023 ahead of the 26 April deadline for the implementation of the new payment system.

This comes nearly a week after Justice Pratibha Singh recused herself from hearing the plea without specifying any reason.

Arguing before the Court on 18 April, the ADIF counsel Abir Roy vehemently sought the High Courts’s directions for the Competition Commission of India (CCI) to adjudicate on the matter prior to 26 April or keep the implementation of the new billing system in abeyance till the competition watchdog reaches a consensus on the complaint that alleges flouting of antitrust norms by Google.

Under the new system, which comes into effect later this month, app developers will have to pay a commission of 11-26% as against 15%-30% earlier.

Reacting to the submission, Justice Tushar Rao Gedela remarked that there is a conflict of commercial interest and sought clarification as to why the ADIF cannot challenge the new billing policy after its implementation.

“Earlier policy was also there about Google Play; you challenged it and the rectification was done…. Here also, if they do this, subject to the fact that the Competition Commission is not able to look at it before 26th of April, then you can always challenge it subsequently,” the judge asked.

Abir Roy, the ADIF counsel, argued that apart from paying commissions, the new billing system mandates submission of transaction data of users to Google, including of those who opt for third-party payment options.

Citing the CCI’s antitrust ruling from October last year, Roy argued that Google could use all the data flowing into its system post April 26 to push its own apps.

“As an app developer, all the transaction data I have to give to Google. The competition commission has found in the October order that since Google would have got all the data, it would have used it for their own apps. It’s a classic case of ‘operation successful, patient dead’ from the 26th if there is no intervention. So, what we’re asking today is the status quo,” stated the counsel.

He also sought an urgent hearing before the competition watchdog in the matter, citing a recent move by the CCI which allows it to clear Merger and Acquisition (M&A) deals without quorum. In its plea, the ADIF alleged that there is no quorum at the regulator and Google is taking advantage of the institutional lacunae.

Appearing for the CCI, Additional Solicitor General (ASG) N Venkataraman argued that the watchdog is taking up M&A cases as per the Competition Act, which calls for resolution of such matters within 210 days of firms filing a notice.

Countering to the charge of lack of quorum, the ASG submitted that the Competition Act provides for no proceeding of the watchdog to be rendered invalid on account of any vacancy in or any effect in the constitution of the commission. Citing Section 22 (3) of the Competition Act, the ASG noted that the law has set a threshold of three members to answer questions that come up before any meeting of the CCI.

Noting the same, Justice Gedela vociferously told the ASG that the appointment of a full-time chairperson at the CCI should be pushed so that the Court do not have to entertain matters arising out of a lack of quorum at the competition regulator.

To this, Venkataraman said as a regulator, it did not have control over the appointment.

Meanwhile, Google contended that the competition watchdog is not empowered to issue an interim stay on the implementation of the user choice billing policy.

Citing Section 42 of the Competition Act, Google’s counsel Sandeep Sethi contended that there is no provision for entertaining an interim plea once an enquiry has led to a final order, adding that the matter is still pending referring to the October antitrust ruling of Google.

The Court reckoned, “So far as … present petition is concerned, it is maintainable before the Competition Commission. They have a right to raise their grievance before the Competition Commission under Section 42. The only thing now is whether the quorum is complete or not — the learned ASG is saying it is not complete.”

It was the contention of the parties that there were cases that had precedents of the provisions of the Competition Act being read in a way that would either allow or not allow for the CCI to decide on a matter despite a lack of quorum.

Justice Gedela asked them to submit one-page notes with such examples by 5 pm on 18th April.