Novi Digital, owner of Disney+ Hotstar, is the 15th company to challenge Google’s Play Store billing system
The Madras High Court granted interim relief to Novi Digital Entertainment on Tuesday in its plea against Google Play Store's new billing system. Novi Digital is a wholly owned subsidiary of Star India Pvt Ltd and owns the popular streaming platform Disney+ Hotstar.
In its order, the Madras High Court also prevented Google from delisting the Disney+ Hotstar app from its Play Store. As per directions from the court, the streaming platform will have to pay 4 per cent commission fees to Google for the user choice billing system (UCBS) within the tech giant’s Play Store.
Novi Digital moved the high court on this matter on Monday and became the 15th company in India to legally challenge Google's contentious billing system. Previously, Bharat Matrimony, Kuku FM, and a dozen others had approached the courts, seeking relief from the Play Store’s UCBS mandate on payments.
What Is Google Play Store’s Billing System?
Earlier, Google followed a billing process on its Play Store called Google Billing and Payments System (GBPS). Under this system, developers who have their apps listed on the Play Store were liable to pay a commission fee to Google in the range of 15 to 30 per cent. This amount is calculated on the revenue generated from users’ purchase of apps or additional in-app purchases.
However, in October 2022, the Competition Commission of India (CCI) found Google guilty of anti-competition behaviour in its Play Store billing practices. In addition to a fine of Rs 936 crore, the competition watchdog forced Google to permit the use of third-party billing services by developers. According to CCI, the compulsory use of GBPS denied market access to other payment aggregators.
Following this directive, Google Play Store allowed for user choice billing system (UCBS) where third-party billing and payment services are allowed. Under UCBS, developers are liable to pay 11 to 26 per cent commission fees. This is resulting in an effective decrease of only 4 per cent commission.
As per Google, this commission charge goes into funding the various investments it makes in Android operating system and Google Play services.
Taking On Google
If app developers fail to comply with Google’s new billing mandates, they risk getting delisted from Play Store. Such a situation is unimaginable for many start-ups since their applications reach users largely through the Android ecosystem.
Matrimony.com, the parent company of Bharat Matrimony, was the first to move court against Google. Several other companies soon filed their pleas against Google, seeking an intervention against possible debarment from Play Store. This includes companies across various sectors such as Unacademy, Kuku FM, TrulyMadly, QuackQuack, Ananda Vikatan, Crafto and Pratilipi.
For many of these companies, paying 11 to 26 per cent commission fees would significantly affect their profitability since they operate on thin margins in the first place. The high courts in Delhi and Chennai have provided injuction orders in many cases and the companies have been instructed to pay 4 per cent platform fees to Google for now.
Disney’s foray into the legal battle against Google’s Play Store billing practices makes it the most high-profile player to take on the tech giant in its ongoing muddled situation in the Indian market.