Startups v Google: Delhi High Court reserves verdict on whether CCI can deal with challenge to Google's new billing policy

The Delhi High Court on Wednesday reserved its verdict on a plea by a group of tech startups seeking directions to Google to keep its new in-app billing fee system in abeyance till the Competition Commission of India (CCI) completes its investigation into the tech giant’s alleged non-compliance with its orders..Justice Tushar Rao Gedela was dealing with a plea filed by Alliance of Digital India Foundation (ADIF). ADIF members include PaytM, Matrimony.com, TrulyMadly, MapMyIndia and several other startups. .According to ADIF, Google earlier mandated app developers to use its payment method named Google Play Billing System (GPBS) for all transactions, including paid app downloads and in-app purchases.This GPBS reportedly entailed a commission of 15-30% and had a settlement period of 45 days.However, in October 2022, the CCI slapped a fine on Google and directed it to allow use of third-party billing services for in-app payments..Before the High Court, ADIF argued that Google is attempting to bypass the CCI direction by introducing a policy called ‘User Choice Billing’ (UCB) which will come into effect from April 26.The petitioners contended that the UCB is a cloaked version of the GPBS, which projects the hoax of giving liberty to app developers to opt for third-party payment processors. But, even when a user uses such third-party payment processors, Google will be charging service fee at 11-26% from the developers, the plea stated.ADIF informed the High Court that it filed several applications before the CCI against Google’s non-compliance, but the Commission is yet to take any action owing to lack of quorum. As a result of this, the market remains vulnerable to abuse of dominant position by Google.Google is taking advantage of the lack of quorum of the CCI and are engaging in anti-competitive conducts which will cause irreversible harm to the members of the petitioner and other app developers in the market and cause distortion in the market, the plea stated..It, therefore, sought directions to Google to keep implementation of the UCB in abeyance till the CCI adjudicates on their applications. Also sought are directions to the tech company to not charge any commission when transactions happen through third-party payment processors..Advocate Abir Roy appeared for the petitioner and stated that he is seeking a declaration that the CCI can validly invoke doctrine of necessity in this case and initiate non-compliance proceedings against Google which is trying to circumvent the commission's order.He cited various judgements on the issue to argue that invoking the doctrine is necessary since, at present, the CCI lacks quorum and that the courts have held that this can be done..Senior Advocates Sandeep Sethi and Sajan Poovayya instructed Chandhiok & Mahajan and Cyril Amarchand appeared for Google and argued that the mandate under the Competition Act is that the quorum shall be three members and not less.All the questions shall be considered by the Commission on satisfaction of three members, Sethi submitted.Poovayya, meanwhile, argued that the doctrine of necessity is not an exception to quorum. "Can we use the doctrine and turn up and say that because civil court is not sitting, the criminal court must deal with a case," he contended.The senior counsel added that even in absence of quorum at the CCI, the petitioner have a remedy to approach the appellate tribunal under Section 42A of the Competition Act.Additional Solicitor General (ASG) N Venkataraman, appearing for CCI, challenged the submissions that existence of three or more members is necessary for the commission to consider the proceedings.He submitted that the language used in the Act is sweeping and it does not prescribe a qualification either at time of appointment or at the stage of meeting..AIDF's petition was drafted by Sarvada Legal.