Google Play not itself a Payment Aggregator but RBI will take final call: Calcutta High Court

The Calcutta High Court recently said that the Google Play Store in itself is not a Payment Aggregator (PA) as it only provides different payment methods and does not handle end-to-end payments between apps and their customers [Hoichoi Technologies Private Limited v RBI and Ors]..Justice Sabyasachi Bhattacharyya gave the ex facie (on the face of it) finding while rejecting Bengali over-the-top (OTT) platform Hoichoi's plea for protection against de-listing from Google Play Store over its non-acceptance of Google Play Billing System (GPBS)However, the Court clarified that the Reserve Bank of India (RBI) shall take the final decision on Hoichoi's complaint which alleged that Google Group companies by employing the GPBS for facilitation of payment transactions on Play Store, were violating the Payment and Settlement Systems Act, 2007"The issues raised are at best arguable and are to be decided by the RBI, which is the designated regulatory and adjudicatory authority under the PSS Act which has its own ecosystem for dealing with contraventions of the said Act," the Court said in the order. .The Court was hearing a writ petition by Hoichoi alleging that RBI had not yet taken any decision on its complaint against the Google group of companies. Meanwhile, Hoichoi said it was being forced to accept the GPBS.Seeking protection against the de-listing of its app from the Play Store, Hoichoi explained that RBI's Guidelines on Regulation of Payment Aggregators and Payment Gateways define PAs as entities that provide e-commerce sites and merchants with a payment system which eliminates the need for a separate payment integration system by them.In the process, the PAs receive payments from customers and then transfer them on to the merchants, the Court was told.Hoichoi alleged that the Google Group companies were flouting the law by employing their GPBS without any authorisation..However, the counsel for the Google group of companies argued that in terms of the Developers Distribution Agreement (DDA) between Hoichoi and Google Asia Pacific Private Ltd, only a service fee was being charged and not a charge as contemplated under the PSS Act.The RBI on the other hand sought dismissal of the petition on the ground it received the representation against Google on February 19, a day before the petitioner moved the Court.It also submitted that Google had already been served notice on February 22 and two sittings had been held.Whether or not there is any breach was already being looked into, RBI told the Court while seeking 12 weeks time for a final decision..Considering the arguments, the Court said that although the primary relief sought was directions to the RBI, the "real reliefs" were embedded in the prayers for protection from being delisted from the Play Store. While declining the plea for interim protection, the Court noted that an overlapping challenge was pending before the Competition Commission of India (CCI) as similar reliefs had been sought by the petitioners, although couched in a somewhat different language."The intended end-relief which has been refused by the CCI is equivalent to reliefs (f) and (g) sought in the present writ petition," the Court said with regard to the prayer for restraint order against Google..On the question of alleged violations by Google, the Court opined that since the matter was pending before RBI, it cannot usurp the regulatory body's jurisdiction.It also took note of the submissions that the petition had been filed within a day of filing of representation to the RBI."The petitioners, by no stretch of imagination, could have expected the RBI to decide the issues raised by the petitioners and complete the adjudicatory process within 24 hours," said the Court..However, the Court proceeded to consider the limited question of whether Google Group of Companies were acting as PAs. At the outset, it noted that Google India Digital Services Private Limited was a registered PA .Looking into the Google Play Developer Distribution Agreement, the Court found that the service charges are applied only when an app or merchant use the platform of Google Play "to extract commercial benefit by charging for their own products carried by the platform".It further opined that the extracts of the relevant web-pages furnished by the Hoichoi themselves go on to show that the Google Play platform merely offers different payment methods but does not itself Act as a PA. "One of the payment methods is GPay, which is operated by respondent no. 6. There are other popular payment modes, even including credit/debit cards, which are offered on the platform. The same web page also shows Google Play as a payment mode. The same is captioned as Play Billing," the Court noted.Therefore, the Court concluded that the Google Play services has made out a reasonably satisfactory prima facie case of charging only service charges for hosting the Applications like Hoichoi when the apps earn money by using the platform provided by Google."It only provides user of the online platform across devices for the purpose of hosting developers and App operators. There is nothing palpable or ex facie evident to clinch beyond reasonable doubt that Google acts as PA by handling end-to-end payment mechanisms from merchants to customers. Displaying various payments Apps on its platform including respondent no.6, which is an accredited body incorporated in India as a PA, does not make Google itself or its group of companies other than respondent no.6 a PA per se.".However, the Court left the final decision to the RBI and said that 12 weeks time sought by it was sufficiently reasonable, considering the intricate issues involved.Accordingly, the Court dismissed the petition with "the hope and trust that the RBI shall decide the issues raised by the petitioners before it as expeditiously as possible, preferably within 12 weeks from date".Hoichoi was represented by advocates Sabyasachi Chowdhury, Rudraman Bhattacharya, Shuvasish Sengupta, Shyantee Datta and Vivek Pandey.RBI was represented by advocate Suchismita Ghosh.The Google group of companies was represented by Senior Advocate SN Mookherjee and advocates VP Singh, Sayobani Basu, Asif Ahmed, Mini Agarwal, Ratnanko Banerji, Shubhangi Jain, Pubali Sinha Chowdhury, Naman Chowdhury, Dhruv Chawla, Sayyan Poovayya and Chetan Chawla..[Read Judgment]