Madras HC directs Disney to pay up 4% of in-app payments

Madras High Court has cautioned Disney+Hotstar that it may lose its interim protection against delisting from Play Store in Google Play Billing case if it does not pay up the 4 per cent commission on in-app payments to Google as directed by the Court as an interim arrangement.

While making this direction to Disney+ Hotstar, the Madras High Court has posted the matter for August 16, sources said.

It may be recalled that Disney+Hotstar was one of the 16 companies that had approached Madras High Court seeking relief against Google’s “coercion” to enrol in ‘User Choice Billing’ system and accepting its updated Payments Policy.

While restraining Google from delisting Disney+Hotstar’s app from its Play Store, the Madras High Court had in its interim order directed Google to charge the streaming service in India 4 per cent of the in-app payment received by the developer.

The temporary 4 percent is a fee that the app developer (Disney+Hotstar in this case) will have to pay to Google each month while the legal proceedings play out in court.

However Disney+Hotstar had till date not paid this 4 per cent fee to Google.

Madras HC had also directed Disney +Hotstar to provide monthly financial information so that Google can collect this fee in a timely manner.

The matter is now posted for further hearing on August 16.

Google Play billing case
CCI had on October 25 last year passed an order in Google Play billing policy case where Google was directed to allow third party billing system other than Google Play Billing System (GPBS).

Domestic start-ups lauded the CCI’s move as the Google used to charge 30 percent commission for its billing system against the then prevailing market rate of 2-5 percent.

Post the CCI order, Google had in January this year expanded its User Choice Billing (UCB) policy to all developers in India and updated its UCB policy that went into effect from April 26. However the service fee charged was as high as 26 per cent (just 4 percentage points drop from its earlier policy).

Start-ups had moved CCI stating that Google is not complying with its October 25 order in true spirit.

Meanwhile, Google issued notices to start-ups to either accept UCB or else they would be delisted.

Between April 2023 and July 2023, about 16 app developers in India had approached the Madras High Court seeking relief against Google coercion to enrol in ‘User Choice Billing’ and accepting Google’s updated Payments Policy.

Also read: Google unveils NFT policy for Play Store as token interest wanes

If not, these app developers have been threatened to be delisted from the Play Store.

The Madras High Court granted interim protection to these app developers by prohibiting Google from delisting their apps from the Play Store, in lieu of a payment of 4 per cent monthly gross revenue to Google from their Play Store apps.

In response, Google filed applications with the Madras High Court seeking rejection of various commercial suits (primarily on grounds of lack of jurisdiction).

Madras High Court on August 3, 2023 ruled on Google’s application(s) and dismissed the commercial suits filed by 14 app developers (along with the interim protection). The court ruled that the matter squarely fell in the domain of the Competition Commission of India.

Disney+Hotstar and Testbook are the two other suits (out of the total 16 suits) where Madras HC is yet to pass final orders. The Hindu BusinessLine