Google’s New Payments Policy Case| Delhi HC Directs CCI To Take Up Applications Of ADIF Before April 26

The Delhi High Court while dealing with a matter relating to Google’s new payment policy, has recently directed the CCI (Competition Commission of India) to take up applications filed by the ADIF (Alliance of Digital India Foundation) on or before April 26, 2023.

The new policy of Google is permitting the use of third payment processors for paid app downloads and in-app purchases on a commission basis.

A Single Bench of Justice Tushar Rao Gedela held, “In the present case, none of the learned senior counsel appearing on behalf of the respondents, at all submitted that the members who presently comprise the CCI are disqualified for any reason. Having regard thereto, the question of examining whether the doctrine of necessity is or is not applicable to the present case does not arise at all. … there is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023.”

The Bench agreed with the submissions made by the counsel for the respondents that the doctrine of necessity is in respect of an institution and not a particular case.

Advocate Abir Roy appeared for the petitioner while ASG N. Venkataraman, Senior Advocates Sajan Poovayya, and Jayant Mehta appeared for the respondents.

Facts -

In 2020, an anonymous informant filed an information before the CCI under Section 19 of the Competition Act, 2002 against Google whereby the CCI issued a prima facie order directing the Director General to conduct an investigation against Google. Thereafter, a second informant filed information before the CCI against Google which got registered and the same was followed by an application for interim relief filed by AIDF i.e., the petitioner herein.

The petitioner sought as-interim relief restraining Google from implementing its Payments Policy under Section 33 of the aforesaid Act and after the conclusion of CCI oral hearings, Google swiftly announced a user choice billing (UCB) pilot program for non-gaming app developers in India in 2022. Google challenged the CCI’s final order before the NCLAT (National Company Law Appellate Tribunal) and hence, the petitioner filed three applications one after the other before the CCI opposing its compliance report which are still impending adjudication.

The High Court after hearing the contentions of the counsel noted, “… it is clear that any adjudicatory process wherein there is a vacancy or any defect in the constitution of the Commission would not invalidate the proceedings of CCI. It is trite that a statutory interpretation ought to be based on plain reading of the Section itself unless there is any ambiguity which would entail reliance upon extraneous materials.”

The first two issues before the Court were whether the CCI is validly constituted presently with two members to continue its adjudicatory roles and what is the effect of Section 15 of the Act. In view of the same, the Court said that the aims and objects of a particular enactment ought to be interpreted in a manner to ensure that the object desired to be fulfilled by the legislature by such promulgation is taken to its logical conclusion.

“… merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. … it is clear that there is no prescription as to what would be the minimum number of members who would constitute a valid quorum. As such, the argument that the Act prescribes a minimum number of members who would validly constitute the quorum, so far as the adjudicatory role of the CCI is concerned, is without any legs to stand”, asserted the Court.

The Court further noted that the Doctrine of Cassus Omissus cannot be applied to fill any apprehended lacuna in an enactment.

“… the provisions of Section 15 act as a saving clause in regard to a situation where a vacancy or a defect in constitution of the CCI would arise and any such vacancy or defect in the constitution would not invalidate any proceedings so far as the adjudicatory powers of the CCI is concerned. … the mechanism for compensation etc. as stipulated under Section 42A is clearly in addition to and not in derogation of any other provision of the Act. Section 42A clearly does not commence with a non obstante clause and therefore would not override the other provisions of the Act”, said the Court.

The Court concluded that the urgency as alleged by the petitioner in respect of the intended launch of the UCB Pilot system on April 26, would not entitle the petitioner from invoking the doctrine of necessity.

Accordingly, the Court disposed of the plea.

Cause Title- Alliance of Digital India Foundation v. Competition Commission of India & Ors. (Neutral Citation: 2023:DHC:2720)

Click here to read/download the Judgment