NEW DELHI/BENGALURU (Reuters) -An Indian court on Tuesday said Google cannot remove Disney’s streaming service from its app store in the country and should receive a lower 4% fee for in-app purchases, a significant challenge to its payments business model.
Disney’s lawsuit is the latest and most high-profile challenge to Google’s policy of imposing a “service fee” of 11-26% on in-app payments in India.
It introduced that after an antitrust directive ruled against Google’s earlier 15-30% fee and forced Google to allow third-party payments. Companies have argued that Google’s new service fee system is just a cloaked version of its earlier system.
Disney, which runs the popular Disney+ Hotstar streaming app in India, challenged Google’s new billing system in a court in India’s Tamil Nadu state. Its lawyers argued Google was threatening to remove the Hotstar app if it didn’t comply with new payments system.
The court in a Tuesday hearing said Disney should now pay a 4% service fee to Google, and said the streaming app should not be removed from Google’s app store.
Further details of the order or the rationale of the decision are not known as the written order has not been made public.
Google did not respond to a request for comment.
The new service fee system, it says, supports investments in Google Play app store and the Android mobile operating system, ensuring it distributes it for free, and covers developer tools and analytic services.
In October, India’s competition watchdog imposed a $113 million fine on Google and said it must allow the use of third-party billing and stop forcing developers to use its in-app payment.
The agency in May started an inquiry into Google after some companies alleged the service fee it charges for in-app payments breaches last year’s directive.
(Reporting by Arpan Chaturvedi in New Delhi, Munsif Vengattil and Indranil Sarkar in Bengaluru ; Editing by Savio D’Souza, Nivedita Bhattacharjee and Conor Humphries)
