CCI denies interim relief to local cos in Google service fees case

The Competition Commission of India (CCI) has rejected an interim relief order that would have prevented Google from charging service fees to local app developers until a final decision is reached by the regulator. The CCI stated that no compelling case has been presented by the informants to justify granting interim relief, and therefore, the applications have been dismissed.

Last week, CCI initiated an investigation into Google's Playstore billing policy following complaints from Indian companies, citing an unfair service fee imposed on app developers. The CCI's order highlighted that Google's fee structure hindered app developers' ability to improve their offerings, thus impeding the growth of the app market. The dispute revolves around Google charging a service fee ranging from 11% to 26% for select developers using its in-app billing services.

Furthermore, the CCI mentioned that the Director General (DG) will continue with the investigation as per the commission's earlier order issued on March 15.

“The Commission is of the considered opinion that no case whatsoever has been made out by the informants which warrant the grant of interim relief. Resultantly, the applications stand dismissed,” the CCI stated while dismissing the appeal from app developers in its ruling.

“The DG shall investigate without being swayed in any manner whatsoever by the observations made herein,” the order reads.

While acknowledging concerns regarding the fairness of Google's fee structure, the regulator highlighted the importance of recognising the costs and responsibilities involved in maintaining and operating app stores. Google argued that being restricted from charging fees temporarily would require them to offer their Playstore services for free to developers in India.

“No other court or regulator has passed a similar relief despite repeated requests. This recognises that Google cannot provide its platform without any consideration, especially when developers continue to charge their users for digital in-app purchases and enjoy the services of Play,” the CCI states in its order.

The plea was brought forward by People Interactive India, which owns brands like Shaadi.com and Sangam.com, along with Mebigo Labs Pvt Ltd owning Kuku FM along with the Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF).

Anupam Mittal, founder & CEO, People Group says, “I think the more important news is the CCI’s earlier order which has ordered an investigation to be completed in 60 days. Getting an interim order would have provided immediate relief to struggling startups but nothing really changes from a longer-term perspective. We remain confident about our case against large tech companies attempting to extract rent from India through extreme monopolistic practices.”

While advocating for a level playing field and competition within the app store market, the CCI emphasised the need for proportionate measures to avoid unintended consequences and preserve the integrity of the platform ecosystem.

Efforts to reach out to People's Group, ADIF, and others for comments were unsuccessful.