SUMMARY
The competition watchdog directed the tech giant to ‘not restrict app developers from using any third party billing/payment processing services’
CCI also ruled that Google limited technical development in the in-app payment processing services market via its mandatory billing policy
This is the second fine slapped on the tech giant in a week. Earlier, the competition watchdog slapped a penalty of INR 1,337 Cr last week
As part of its ongoing crackdown against Google, the Competition Commission of India (CCI) has slapped a second penalty of INR 936 Cr on the tech giant in an antitrust probe.
“The Competition Commission of India (Commission) today imposed a penalty of INR 936.44 Cr on Google for abusing its dominant position with respect to its Play Store policies, apart from issuing a cease-and-desist order. The Commission also directed Google to modify its conduct within a defined timeline,” said CCI in a statement.
The fine was imposed on Google for its in-app payments policy on the app marketplace, Play Store. The competition watchdog directed the tech giant to “not restrict app developers from using any third party billing/payment processing services.”
“Indian developers have benefited from the technology, security, consumer protections, and unrivaled choice and flexibility that Android and Google Play provide. And by keeping costs low, our model has powered India’s digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate next steps,” said a Google spokesperson.
CCI, in its ruling, found Google guilty of flouting multiple provisions of the Competition Act. Here is what CCI noted:
- By making Google’s in-house payment and billing system mandatory for paid apps and in-app purchases, the tech giant imposed unfair conditions on app developers
- Google did not mandate the use of its payment service for its own applications, such as YouTube. This amounted to the imposition of discriminatory conditions as YouTube is not paying the service fee as being imposed on other apps listed on the Play Store
- Mandatory imposition of Google’s in-house billing system disturbs innovation incentives and the ability of both the payment processors as well as app developers to undertake technical development and innovation
- Google limited technical development in the market for in-app payment processing services
- The compulsory usage of Google’s payment system also results in the denial of market access for payment aggregators as well as app developers
- Google violated competition norms by deploying different methodologies to integrate its own UPI app with the Play Store results and excluding other UPI platforms
This comes barely days after CCI imposed a hefty penalty of INR 1,337.76 Cr on tech giant Google for its anti-competitive practices in the Android devices market.
CCI Looks To Curb Dominance
The ruling has come as a big win for Indian app developers. Over the last few years, Indian developers have rued high commissions charged by Play Store and near-total monopoly exercised by Google in the space.
The CCI order has more or less confirmed the suspicions of the ecosystem which has been reeling under the weight of up to 30% commissions on Play Store. The result has been a stifled competition, as Google’s app marketplace continues to operate as a monopoly in the country.
Back to the story, CCI, in its order, directed the tech giant to not restrict app developers from using any third-party billing and payment processing systems. In the ruling, CCI also warned the tech conglomerate to not discriminate against apps using third-party payments, in any manner.
“Google shall not impose any anti-steering provisions on app developers and shall not restrict them from communicating with their users to promote their apps and offerings, in any manner,” said CCI.
Anti-steering provisions bar developers from embedding their apps with a direct link to a web page or using language that encourages a user to purchase the digital item outside of the app. Essentially, these mandates prevent app developers from steering their customers to an external payments system, rather than opting for Google’s in-app payments system.
CCI also directed the tech giant to not restrict users from accessing any features and services offered by app developers. It also directed Google to spell out a clear and transparent policy on data collection, usage and sharing of such data.
Siding with developers, the competition watchdog also issued a diktat to Google to provide access to the data generated through the app to the concerned app developer.
The CCI probe adds to the heightened scrutiny that Google is facing in the country. While the CCI has already reprimanded Google for its dominance in the Android devices market, the new ruling has turned up antitrust heat on the US-based Alphabet.
Besides, the company is also facing other antitrust investigations for alleged abuse of dominance in news aggregation space, digital payments market, among others. Being Google’s largest market by users, India continues to be an area of focus for the tech major. It enjoys near total monopoly across its multiple verticals including video streaming, search and email services.
Even as CCI has slapped a second penalty on the tech giant in under a week, it looks highly likely that the tech giant would approach appellate authorities against the decision. The move will, however, bring much-needed respite for the Indian app developers which have been fighting the giant for years.
(This story has been updated to include Google’s statement.)
