Digital start-ups and app developers have moved the Supreme Court challenging the Madras HC Ruling on Google’s new user choice billing (UCB) policy, which imposed a ‘Lagaan’ type service fee of up to 26 per cent for download of paid apps and in-app purchases on the Google Play Store.

Madras HC Division Bench had, last month, dismissed the start-ups’ appeal while re-directing their plea to the Competition Commission of India (CCI). It had allowed three weeks interim protection to them against being delisted from Google Play Store.

The SLPs, exclusively reviewed by  businessline, allege inaction by CCI and claimed that there has been ‘no adjudication by the CCI till date (more than 15 months)’ over complaints filed against Google.

The start-ups have argued that they are now left “remediless” with the Madras High Court rejecting their plea and the “issues being left non- adjudicated” by CCI. The petition is listed for hearing before SC on February 9.

Some prominent start-ups involved in the appeal before Madras HC against Google’s UCB Policy include Bharat Matrimony, Shaadi.com, Kuku FM, TrulyMadly and QuackQuack, among others.

‘Hobson’s choice’

Seeking immediate interim protection against Google delisting apps of start-ups from  the Google Play Store, the SLPs contended before the SC that if immediate protection is not granted, “Petitioners [start-ups] will suffer irreparable injury”. 

“The petitioner, being the bona fide app developer has invested significant time and resources in  building its business and would be put to great loss if the impugned judgement ( Madras HC Ruling) is not stayed. It is a situation of Hobson’s choice for the start-ups as either they have to succumb to  the illegal agreement relating to the payment policy of Google or exit the market altogether,” added the plea.

‘CCI in a supine mode’

Start-ups have refrained from approaching CCI fearing continuous non-action by the regulator. “It is futile to approach the CCI as it is in a supine mode. The CCI has gone into a long hibernation. It has kept the applications of start-ups seeking interim protection against threats of delisting from Play Store by tech giant for months forcing the developers to approach the Madras High Court on civil side, which ultimately granted interim protection to start-ups against delisting threats of Google. Not only this, there has been inexplicable delay in disposing applications filed by start-ups, alleging non-compliance of its own order. It is sad that a regulator is ceding its jurisdiction to civil courts due to inaction/ delay in deciding such issues,” said a start-up representative who spoke to businessline on condition of anonymity.

M M Sharma, Head of Competition Law Practice, Vaish Associates said, “In my view, the Madras High Court has rightly refused to entertain the civil suit filed by app developers and referred them to go to CCI as it is essentially a competition issue arising out of abuse of dominance by Google in imposing unfair and restrictive charges under its new UCB policy.”

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