Google in-app billing case: No immediate relief for ADIF; next hearing tomorrow

ADIF represents Indian startups such as MapmyIndia, Paytm, Matrimony, and TrulyMadly.

The court also granted time to the parties to make additional submissions till 5 pm on Tuesday, and listed the matter for hearing on Wednesday.

In its petition, ADIF had alleged that the antitrust regulator’s “inaction” on complaints filed against Google’s user choice billing (UCB) system has resulted in the tech company engaging in anti-competitive conduct.

ADIF pitch

Arguing the case in front of Justice Tushar Rao Gedela, ADIF counsel Abir Roy said that the association was either seeking that the court asks CCI to adjudicate on the matter prior to April 26 or keep Google’s new policy’s implementation in abeyance till the CCI was able to muster a quorum to decide on the complaint.

Discover the stories of your interest

Under the system proposed by Google, app developers need to pay a commission of 11-26% to the US-based tech giant.To this, Justice Gedela said that there was a conflict of commercial interest and asked why the ADIF couldn’t challenge the UCB policy post its implementation.

“Earlier policy was also there about Google Play; you challenged it and the rectification was done. It’s not as if before it was implemented you challenged it. 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 said.

ADIF’s counsel then argued that there was not only the matter of app developers paying extra fee as commission to Google, but also that through the new policy, transaction data of users — even the ones who choose payment methods other than the Google Play billing system — would have to be provided to Google.

ADIF also sought an urgent hearing by the CCI, citing the regulator’s move to clear mergers and acquisitions despite the lack of a quorum, following an opinion from the attorney general of India.

“As an app developer, all the transaction data I have to give to Google [sic]. 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,” Roy said.

The CCI perspective

Appearing for the CCI, additional solicitor general (ASG) N Venkataraman said the antitrust regulator was seeking the court’s guidance with respect to three different provisions of the Competition Act. The ASG argued that the CCI was taking up M&A cases because the Competition Act mandated such cases to be decided within 210 days of companies filing a notice.

Further, he submitted that the Competition Act provided that no proceeding of the CCI shall be rendered invalid merely by reason of any vacancy in or any effect in the constitution of the commission. He also said that Section 22 (3) of the Act laid down a threshold of three members to answer questions that come up before any meeting of the CCI.

All questions that come up before any meeting of the commission shall be decided by the majority of the members present voting, and in the event of a tie … the chairman will have the deciding vote — provided there is a quorum of three members.

Justice Gedela also told the ASG that the appointment of a full-time chairperson at the CCI should be pushed so that the court did not have to entertain matters arising out of a lack of quorum at the competition regulator. ASG Venkataraman said that as a regulator, it did not have control over the appointment.

Google’s contention

Google, which has appealed the CCI order against the company issued last October, argued that the competition regulator did not have any power to issue an interim stay on its policy implementation.

“There is no provision for entertaining an interim application after the enquiry has resulted in a final order, and that matter is pending in appeal. There is no power to pass order pending consideration of Section 42 of the Competition Act,” senior counsel Sandeep Sethi, appearing for Google, submitted.

Section 42 of the Competition Act allows a party to raise concerns with the CCI pertaining to contravention of an order it has issued.

“So far as … present petition is concerned, it is maintainable before the Competition Commision. 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,” Justice Gedela said.

The parties then argued 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 the parties to submit one-page notes with such examples by 5 pm on Tuesday.

“At request, the parties are permitted to file one-page notes by 5pm today. List for further consultation on 19.04.2023,” he ordered.