Unfortunately, there is no quorum at the CCI; and hence Google is taking advantage of an institutional lacunae: ADIF
In its statement, ADIF also cited the example of Twitter Blue which costs INR 900 on Google Play but only INR 650 if purchased through the web
Following the CCI order, Google announced that it would start allowing all Android app developers to opt for a third-party billing system for Google Play Store purchases in India starting April 26
Ahead of Google implementing the User Choice Billing System on April 26, policy think tank Alliance of Digital India Foundation (ADIF) has requested Competition Commission of India (CCI) to look into the ‘abusive dominance practices’ of Google on an urgent basis. The 11-26% service fee for in-app purchases will be a death knell for the Indian startup ecosystem, it said.
“Unfortunately, there is no quorum at the CCI; and hence Google is taking advantage of an institutional lacunae, bringing in user choice billing in haste and in the process, hurting start up story and also disregarding the CCI order,” ADIF said in a statement.
In its statement, ADIF also cited the example of Twitter Blue which costs INR 900 on Google Play but only INR 650 if purchased through the web. The 30% subscription commission charged by Google has created differential pricing.
It also said that Google will be charging 15-30% if consumers are paying through Google Pay, or 11-26% if paid alternatively, which would take away almost one-third of the revenue and would dent the pockets of OTT platforms severely.
“This would lead to a few of the OTT platforms becoming unsustainable, else remaining platforms increasing the fee for consumers, hurting millions of OTT subscribers for no fault of theirs,” the think tank said.
Last year, the CCI imposed a fine of INR 936 Cr in October for its in-app payments policy. The regulator also directed the tech giant to “not restrict app developers from using any third party billing/payment processing services.”
According to ADIF, Google is resorting to these practices despite CCI’s directions and imposing penalties for abusing its dominant position with regard to its Play Store policies.
The new billing policy will take away a huge chunk of the revenue made by Indian app developers and startups and would render business models of many young startups unviable, especially the one relying on in-app purchases, paid apps or subscriptions, ADIF said.
Google’s Changing App Billing Policy
Following the CCI order, Google said it would start allowing all Android app developers to opt for a third-party billing system for Google Play Store purchases in India starting April 26.
“In response to recent regulatory developments in India, we are now offering all developers the ability to offer an alternative billing system alongside Google Play’s for their mobile and tablet users in India. If a user pays through an alternative billing system, the Google Play service fee will be reduced by 4 per cent,” Google India wrote.
While developers are currently charged a 15-30% commission for using Google’s platform and payment, app developers who opt to use an alternate payment method or third-party payment services, for subscriptions and paid apps, will get a 4% discount commission under the new directive.
ADIF earlier also said that Google is non-compliant with the CCI’s remedy on not imposing any condition (including price related condition) on app developers despite the changes announced by the company.
The ADIF said that the tech company has limited alternative payments only to the purchase of in-app digital content and not app downloads and it is silent on ‘not imposing anti-steering provisions on app developers’.
