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In a major setback for homegrown startups, a Madras High Court division bench has dismissed the appeals they preferred against tech giant Google’s new ‘User Choice Billing’ Policy.
The Bench of Chief Justice S V Gangapurwala and Justice P D Audikesavalu, however, on Friday allowed an earlier interim protection against delisting to continue for three weeks.
After the expiration of these three weeks, the existing protection will not be available. A detailed order copy of the ruling is awaited.
The only legal remedy for the Startups would be to approach the Supreme Court, say experts.
Some prominent Startups involved in the appeal include Bharat Matrimony, Unacademy, Shaadi.com, Kuku FM, Kutumb, TrulyMadly, and QuackQuack, among others.
Between April 2023 and July 2023, about 16 app developers in India approached the Madras High Court seeking relief against Google’s coercion to enrol in ‘User Choice Billing’ and accept the tech giant’s updated Payments Policy.
If not, these app developers were threatened with delisting from the Play Store.
In August last year, a Single Judge dismissed 14 petitions (out of the 16) by Indian Startups challenging Google’s new user choice billing system Google.
The latest Division Bench Ruling results from an appeal against the single-judge order that dismissed the Startups’ pleas.
Startups had argued that Google had in 2020 made the use of the Google Play Billing System (GPBS) mandatory and exclusive for processing payments for downloading paid apps and In-App Purchases. They faced fees ranging from 15% to 30% for using the GPBS.
Further, app developers cannot, within an app, provide users with a direct link to a webpage containing an alternative payment method or use language that encourages a user to purchase the digital item outside of the app (anti-steering provisions).
The Competition Commission of India (CCI) had on October 25 imposed a monetary penalty of ₹ 936.44 crore on Google for anti-competitive practices in relation to its Play Store policies. The competition watchdog had directed Google to allow third-party billing systems other than GPBS.
Tech giant Google posted CCI’s order of October 25, 2022, expanded in January 2023 its UCB policy to all developers in India and updated its UCB policy that went into effect from April 26. However, the service fee charged was as high as 26% (just 4 percentage points drop from its earlier policy). This prompted the 16 Indian Startups to file petitions against Google.
Google’s newly updated in-app billing fee system, known as UCB, went live in India on April 26 last year.
This would mean that app developers in India, even if they provide a third-party billing system, would end up paying service fees as high as 26 per cent to Google for in-app purchases made through Google Play Store.
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