NEW DELHI/BENGALURU (Reuters) – Google said on Wednesday an Indian court’s directive ordering the company to charge a lower 4% in-app payment on Disney’s streaming service in the country was a temporary measure until the court proceedings play out.
Disney in India has gone to court in what is the latest and most high-profile challenge to Google’s policy of imposing a “service fee” of 11-26% on in-app payments. The service charge was introduced after an antitrust directive ruled against Google’s earlier 15-30% fee and forced Google to allow third-party payments.
An Indian court on Tuesday said Google should receive a lower 4% fee for in-app purchases from Disney+ Hotstar, and cannot remove Disney’s app from its India app store, in what is a significant challenge to Google’s payments business model.
“The order is interim in nature, and the temporary 4% figure is simply a fee that the developer will pay to Google each month while these legal proceedings play out,” Google said in a statement.
Google will need to comply with the court directives until it is overturned or modified.
Disney, which runs the popular Disney+ Hotstar streaming app in India, has challenged Google’s new billing system in a court in India’s Tamil Nadu state. Its lawyers had argued Google was threatening to remove the Hotstar app if it didn’t comply with new payments system.
(Reporting by Aditya Kalra, Tanvi Mehta in New Delhi and Rama Venkat in Bengaluru; Editing by Nivedita Bhattacharjee & Shri Navaratnam)
