The Madras High Court is set to determine the outcome of civil suits challenging service fees imposed on owners of mobile apps available on Google Play.
As per reports, allegations by the litigants claim that Google, leveraging its dominant market position, enforces ‘unconscionable and arbitrary’ conditions. The cases presented before the first Division Bench, presided over by Chief Justice S.V. Gangapurwala and Justice P.D. Audikesavalu, pertain to the service fees charged on business establishments utilizing Google Play to showcase their Android applications providing digital goods/services to consumers.
P. Chidambaram, Sriram Panchu, Satish Parasaran and Srinath Sridevan are some of the senior counsels representing the litigants against Google. Alphabet Inc, is being defended by senior counsel P.S. Raman and Sajan Poovayya.
As per allegations made by the litigants, they they are left with no alternative but to accept the “one-sided” and non-negotiable terms of the Google Play Developer Distribution Agreement.
Reports say, in 2020, Google mandated the use of the Google Play Billing System (GPBS) for processing customer payments for both paid apps and in-app purchases. With GPBS, Google introduced a sister concern to serve as a payment aggregator. This entity collected all online payments made by customers for digital goods/services, consolidated the funds, and subsequently transfered the money to the respective app owners after deducting necessary charges, a process that takes a considerable amount of time.
Following the Competition Commission of India (CCI)’s directive on October 25, 2022, that urged Google not to prevent the app owners from using third-party payment aggregators like Razor, the came up with an alternative, titled User Choice Billing System (UCBS), in addition to GPBS.
Under UCBS, a service fee of 15 percent is being charged for up to $1 million dollar in revenue earned by an app owner per year and any earnings beyond $1 million are being charged 30 percent under the GBPS.
Google contended that the civil suits brought against it, invoking the provisions of the Commercial Courts Act, 2015, are entirely non-maintainable. They argued that such suits are prohibited under Section 61 of the Competition Act, 2002. According to Google’s stance, the matter can only be addressed before the Competition Commission of India (CCI) and is not within the purview of the High Court.