HC refuses urgent hearing to Google against order asking CCI to look into new payment policy

The Delhi High Court on Tuesday refused to grant an urgent hearing to Google on its challenge to a single-judge order asking the Competition Commission of India (CCI) to consider a plea against the tech giant's policy of allowing the use of third-party payment processors for paid app downloads and in-app purchases on a commission basis.

The matter was mentioned for an urgent listing by senior advocate Sandeep Sethi, who appeared for Google before a division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad.

The single-judge bench had, on Monday, asked the anti-trust regulator to consider the plea of the Alliance of Digital India Foundation (ADIF), an alliance of individuals and an industry representative body of innovative startups in the country, on or before April 26.

Sethi sought an urgent hearing against the direction and informed the court that the CCI would take up the matter in the afternoon pursuant to the order of the single-judge bench.

He emphasised that while the requisite quorum of the CCI is the chairperson and two members, presently it has only two members and thus, it cannot proceed with the ADIF's plea.

The ADIF approached the court earlier this month with the grievance that the anti-trust regulator had failed to act on its application objecting to Google's new payment policy owing to a lack of quorum.

Google had opposed the petition before the single-judge bench on several grounds, including that since there were only two members and the chairperson was yet to be appointed, the CCI was incapable of adjudicating the application filed by the petitioner.

However, Justice Tushar Rao Gedela had in its 38-page order noted that any vacancy or defect in the constitution of the CCI would not invalidate any proceedings so far as its adjudicatory powers are concerned and according to Additional Solicitor General N Venkataraman, the CCI was formed in accordance with the provisions of the Competition Act and was very much functional and carrying out adjudicatory functions.

"There is no impediment, legal or otherwise, in directing the CCI to take up the applications under section 42 (contravention of CCI orders) of the Act, as filed by the petitioner, for hearing and considering the same in accordance with the law on or before 26.04.2023. Accordingly, the petition stands disposed of in above terms," the single-judge bench had said.

The ADIF had earlier submitted before the single-judge bench that under its "User Choice Billing" policy, which is slated to come into force from Wednesday (April 26), Google would be charging a service fee of 11% or 26% in case of third-party payment processors, which is anti-competitive and an attempt to bypass an order passed by the CCI.

It had said the US technology giant operates a mobile application marketplace for Android devices called "Play Store", which enjoys supreme dominance in that market and under the present framework, there is no requirement to pay any commission for third-party payment processors.

The single-judge bench was informed that in October last year, the CCI, while imposing a penalty of Rs 936 crore, asked Google to allow and not restrict app developers from using any third-party billing service and not impose any discriminatory condition.

The ADIF had said its grievance was that the CCI had failed to act on its plea in relation to the new policy owing to a lack of quorum to consider the issue.

It had contended that the CCI must invoke the "doctrine of necessity" and look into the matter as a refusal to intervene will cause irreversible harm to the petitioners and other app developers, and lead to distortion in the market.

The implementation of the policy, in the meantime, must be kept in abeyance till the matter is looked into by the anti-trust regulator, the petitioner had prayed.