Google moves Karnataka High Court against CCI probe into Play Store billing policy

Google has filed a writ petition with the Karnataka High Court, asking the court for more time to respond to the allegations against the company. The Alliance of Digital India Foundation (ADIF), an industry body of 422 Indian startups, filed a petition before the CCI in October seeking interim relief from Google’s Play Store billing policy, which was set to go into effect from March 2022.

In turn, the CCI had asked Google to file its response by December 31, 2021. While Google hasn’t filed its response yet, the company extended the deadline for the policy to October 2022 earlier this month. Now, Google has filed a writ petition with the HC asking for more time to file its response.

“Indeed, the measures sought to be restrained will not take place until 31 October 2022 at the earliest. The Petitioners emphasise that - due to the October 2022 Implementation Announcement - the impacted developers do not presently need to change any of their current business practices or incur any additional fees on account of the Google Play Billing Clarifications,” the company argues in its petition. It also accuses the CCI of proceeding with a “rushed full submission” on the ADIF’s petition.

“We have filed a writ in Karnataka High Court regarding the interim relief application in the Google Play probe by the CCI, seeking to move forward in line with established due process principles. We respect the CCI’s investigative process and will continue to engage cooperatively and constructively in the interest of a fair investigation,” the company said in a statement.

Google also asked for the inclusion of a judicial member in the CCI panel hearing the case, and for the identity of the complainants to be revealed. While the October petition came from the ADIF, the complaint itself has been filed by anonymous complaints. 

“Forcing the Petitioners to defend the ADIF IR Application blindfolded cannot comport with natural justice. That is doubly true where - as here - such restraint is premised on mere speculation that the Petitioners would retaliate against the complainants: a theory the Commission adopted without any reasoned order or hearing,” the petition said. “The Commission did so even though ADIF had not justified - or even requested - that the identities of the relevant app developers/start-ups should be withheld from the Petitioners' confidentiality ring members,” it added.

It said that the order “denies Google the right” to find out whether the complainants in the case are “among the very small percentage” of Indian app developers/startups who are affected by Google’s policy.

However, competition lawyers said that Google will have to prove that not knowing the identity of the complainants affects its ability to defend itself, while the CCI will have to prove that revealing the identity of the complainants could hurt said complainants. 

“Natural justice encompasses fairness of procedure,” said Anisha Chand, partner, competition and antitrust, at law firm Khaitan and Co. “Anonymity can be granted by the CCI save for cases where it is expedient to disclose the name of the informant. Typically anonymity is granted where there is expectation of harm to the informant in case of disclosure of its identity,” she added.

Further, Chand also said that the Competition Act says that no proceedings of the CCI would be invalid by reason of any vacancy or any defect in its constitution. “Accordingly, absence of a judicial member doesn't invalidate the decision of the CCI. This has been upheld in Cadd Systems Delhi High court order of 2019,” she said. 

The Act also doesn’t have provisions for a judicial member to be appointed compulsorily to a CCI panel, though there’s precedence for this in the Mahindra and Mahindra vs CCI case from 2019, which Google has cited in its petition. “The Mahindra order of the Delhi High court had urged the central government to appoint a judicial member within six months, which still remains unaddressed,” said Chand.

The Play Store billing policy requires app developers to use its built-in payment modes for selling apps and services through the Play Store. The policy was announced earlier this year and Google had given Indian startups time till March 2022 to comply with the same, after widespread criticism from Indian startups, including PayTM’s Vijay Shekhar Sharma, RazorPay’s Harshil Mathur and Matrimony.com’s Murugavel Janakiraman.

“This legal challenge by Google is yet another delay tactic and an attempt to frustrate the antitrust process. It also calls into question their good faith. The only commitments that have been consistent on the part of Google throughout this entire antitrust process has been their commitment to a) delay the process in every way possible and b) protecting their super profits from the app economy abusing its dominance. We exhort Google to comply with the antitrust process in good faith and as per the directives of the CCI,” ADIF’s Executive Director, Sijo Kuruvilla George, said in a statement.

“Natural justice encompasses fairness of procedure,” said Anisha Chand, partner, competition and antitrust, at law firm Khaitan and Co. “Anonymity can be granted by the CCI save for cases where it is expedient to disclose the name of the informant. Typically anonymity is granted where there is expectation of harm to the informant in case of disclosure of its identity,” she added.

Further, Chand also said that the Competition Act says that no proceedings of the CCI would be invalid by reason of any vacancy or any defect in its constitution. “Accordingly, absence of a judicial member doesn't invalidate the decision of the CCI. This has been upheld in Cadd Systems Delhi High court order of 2019,” she said. 

The Act also doesn’t have provisions for a judicial member to be appointed compulsorily to a CCI panel, though there’s precedence for this in the Mahindra and Mahindra vs CCI case from 2019, which Google has cited in its petition. “The Mahindra order of the Delhi High court had urged the central government to appoint a judicial member within six months, which still remains unaddressed,” said Chand.