On Wednesday, Google announced that an Indian court’s ruling mandating the company to impose a reduced 4 percent in-app payment on Disney’s streaming service was a provisional measure while legal proceedings continue.
Disney has initiated legal action against Google in India, marking a significant and high-profile challenge to the tech giant’s policy of enforcing a “service fee” ranging from 11-26 percent on in-app transactions. This service fee followed an antitrust ruling that rejected Google’s previous fee structure of 15-30 percent and compelled the company to permit third-party payment options.
The recent court decision ordered Google to accept a lower fee of 4 percent for in-app purchases from Disney+ Hotstar and prohibited the company from removing the Disney app from its app store in India. This ruling represents a notable challenge to Google’s payment business model.
In a statement, Google clarified, “The order is interim in nature, and the temporary 4 percent figure is simply a fee that the developer will pay to Google each month while these legal proceedings play out.”
The tech company is obligated to adhere to the court’s directives until they are either overturned or amended.
Disney, which operates the highly-trafficked Disney+ Hotstar streaming service in India, has contested Google’s new billing system in a Tamil Nadu court. The company’s legal representatives have claimed that Google threatened to remove the Hotstar app if the new payment system was not followed.
© Thomson Reuters 2023
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