The Calcutta High Court, yesterday (6th April), stated that Google Play is not inherently a Payment Aggregator, but the final decision will be made by the RBI. According to the Calcutta High Court, Google Play is not fundamentally classified as a Payment Aggregator, although the ultimate determination rests with the RBI. Justice Sabyasachi Bhattacharyya provided an ex facie (on the face of it) finding when denying the Bengali over-the-top (OTT) platform Hoichoi’s request for safeguarding against removal from the Google Play Store due to its refusal to adopt the Google Play Billing System (GPBS).
Calcutta: The recent ruling by The Calcutta High Court emphasized that the Google Play Store does not function as a Payment Aggregator (PA) because it merely offers various payment options and does not manage complete payment transactions between apps and their users.
Justice Sabyasachi Bhattacharyya provided an ex facie (on the face of it) finding when denying the Bengali over-the-top (OTT) platform Hoichoi’s request for safeguarding against removal from the Google Play Store due to its refusal to adopt the Google Play Billing System (GPBS).
Nevertheless, the Court specified that the final judgment on Hoichoi’s complaint, which accuses Google Group companies of breaching the Payment and Settlement Systems Act, 2007 by utilizing GPBS for managing payment transactions on Play Store, rests with the Reserve Bank of India (RBI).
The Court in its order stated,
“The raised issues are subject to debate and are under the purview of the RBI, which acts as the designated regulatory and adjudicatory body according to the PSS Act. The Act has its own framework for addressing violations,”
The Court reviewing a writ petition filed by Hoichoi, alleging that the RBI had not yet made a decision regarding its complaint against the Google group of companies.
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At the same time, Hoichoi claimed it pressured to accept the GPBS.
Seeking protection from its app being removed from the Play Store, Hoichoi clarified that according to RBI’s Guidelines on Regulation of Payment Aggregators and Payment Gateways, PAs defined as entities providing e-commerce sites and merchants with a payment system that eliminates the need for a separate payment integration system.
As per this system, PAs receive payments from customers and then transfer them to the merchants, as explained to the Court.
Hoichoi claimed that the Google Group companies violating the law by using their GPBS without authorization. On the other hand, counsel for the Google group argued that according to the Developers Distribution Agreement (DDA) between Hoichoi and Google Asia Pacific Private Ltd, only a service fee charged, not a charge as outlined in the PSS Act.
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The RBI, however, sought dismissal of the petition as it received the representation against Google on February 19, a day before the petition was filed. The RBI informed the Court that Google had already been notified on February 22, and two meetings had taken place.
The RBI was looking into whether there had been any breach and requested 12 weeks for a final decision.
Taking into account the arguments, the Court noted that while the primary relief sought was directions to the RBI, the “actual reliefs” related to protection from being delisted from the Play Store.
The Court declined interim protection, noting that a similar challenge was pending before the Competition Commission of India (CCI), , presented in a distinct approach. Referring to the prayer for a restraint order against Google, the Court stated that,
“The CCI had already rejected a similar relief, equivalent to reliefs (f) and (g) sought in the writ petition.”
Regarding the alleged violations by Google, the Court observed that since the matter was before the RBI, it could not take over the regulatory body’s jurisdiction.The Court also acknowledged that the petition had been filed promptly after the representation to the RBI.
The Court stated,
“The petitioners could not have reasonably expected the RBI to address the raised issues and conclude the adjudication process within 24 hours,”
However, the Court decided to examine the specific question of whether the Google Group of Companies functioning as PAs. Initially, it acknowledged that Google India Digital Services Private Limited was a registered PA.
Upon reviewing the Google Play Developer Distribution Agreement, the Court determined that service charges only applicable when apps or merchants utilize the Google Play platform “to gain commercial benefit by charging for their own products available on the platform.”
The Court also expressed the view that the passages from the relevant web pages provided by Hoichoi demonstrate that the Google Play platform simply provides various payment methods but does not operate as a PA itself.
The Court observed,
“One of the payment methods is GPay, operated by respondent no. 6. Various other popular payment modes, including credit/debit cards, are also available on the platform. The web page also lists Google Play as a payment mode, referred to as Play Billing.”
Hence, the Court concluded that Google Play services established a reasonably convincing prima facie argument for imposing solely service charges for hosting applications such as Hoichoi, where the apps generate revenue by utilizing Google’s platform.
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The Court explained,
“It solely facilitates users of the online platform across devices for the purpose of hosting developers and app operators. There is no tangible evidence or apparent indication to definitively establish that Google acts as a payment aggregator by managing end-to-end payment processes from merchants to customers beyond reasonable doubt. The inclusion of various payment apps on its platform, including respondent no.6, a recognized entity incorporated in India as a payment aggregator, does not inherently categorize Google or its affiliated companies, aside from respondent no.6, as payment aggregators themselves,”
Nevertheless, the Court deferred the ultimate decision to the RBI and deemed the requested 12-week timeframe as adequately reasonable, given the complexity of the issues at hand.
In line with this, the Court dismissed the petition, expressing its expectation and confidence
“That the RBI will resolve the issues raised by the petitioners before it as swiftly as possible, ideally within 12 weeks from today.”
Hoichoi legally represented by advocates Sabyasachi Chowdhury, Rudraman Bhattacharya, Shuvasish Sengupta, Shyantee Datta, and Vivek Pandey.
Advocate Suchismita Ghosh represented the RBI.
The Google group of companies was represented by Senior Advocate SN Mookherjee, along with advocates VP Singh, Sayobani Basu, Asif Ahmed, Mini Agarwal, Ratnanko Banerji, Shubhangi Jain, Pubali Sinha Chowdhury, Naman Chowdhury, Dhruv Chawla, Sayyan Poovayya, and Chetan Chawla.
Read Judgement: [Hoichoi Technologies Private Limited v RBI and Ors].