On Tuesday, an Indian court said that Google can’t remove Disney’s streaming service from its app store in the country and that it should get a lower 4% fee for in-app sales. This is a big challenge to Google’s way of making money from payments.
Disney’s lawsuit is the latest and most high-profile challenge to Google’s strategy of charging a “service fee” of 11–26% on in-app payments in India.
It started doing that after an antitrust order ruled that Google’s 15–30% fee was unfair and forced Google to accept payments from third parties. Companies have said that Google’s new way of charging for services is just a disguised version of its old way.
Disney took Google’s new billing system to court in India’s Tamil Nadu state. Disney runs the famous streaming app Disney+ Hotstar in India. Its lawyers said that Google had said it would take down the Hotstar app if it didn’t use the new payment method.
At a meeting on Tuesday, the court said that Disney needs to pay Google a 4% service fee and that the streaming app shouldn’t be taken off of Google’s app store.
No one knows more about the order or why it was made because the written order has not been made public.
Google didn’t answer when asked for a response.
It says that the new service fee system helps pay for investments in the Google Play app store and the Android mobile operating system so that they can be given away for free. It also pays for developer tools and services that look at data.
In October, India’s competition watchdog fined Google $113 million and told it it had to stop pushing developers to use Google’s in-app payment system.
In May, the agency began looking into Google after some companies said that the service fee it charges for in-app payments goes against an order from last year.
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