SUMMARY
Google said it will be taking necessary steps to ensure its user choice billing system is applied fairly on all developers
The tech giant introduced the user choice billing system recently following the CCI slapping a fine of INR 936 Cr on it for anti-competitive practices in relation to its Play Store policies.
Indian startups are up in arms against the new billing system and the CCI recently commenced an investigation into it
In a veiled ultimatum to Indian developers who are yet to implement its user choice billing system, tech giant Google on Wednesday (May 17) said it would take ‘necessary steps’ for fair implementation of its billing mandates.
“In India, now that the deadline (April 26) has passed, we are informing developers in the country who have not yet implemented one of these options that we will be taking necessary steps to ensure our policy is applied fairly,” Google said in a blog post.
Google said it has expanded the new mandates to all developers in India in compliance with the Competition Commission of India’s (CCI’s) October 2022 antitrust order.
The development comes days after it was reported that the antitrust watchdog commenced an investigation into the tech juggernaut’s user choice billing system for allegedly flouting its antitrust rulings.
Google, in its blog post, claimed that ‘less than 60’ of its 2 Lakh Indian developers paid commissions in excess of more than 15%. It also said that it charges a service charge of 15%, or less, for a vast majority of its developers.
“To further put this in context, we estimate less than 60 of the over 2,00,000 Indian developers on Google Play currently could pay a service fee of above 15%. And this fee is further reduced by 4% if a user pays through an alternative billing system to fairly reflect that Google Play’s billing system has not been used,” the blog post said.
Making its case, Google said it has offered developers three billing options on its platform – Google’s in-app billing system, user choice payments system, and a consumption-only option, which allows users to “login when the app opens and access content paid for somewhere else”.
The US-based big tech also claimed that its service fee is only applicable when a developer sells digital goods or services in their app, adding that only 3% of Indian developers are under the ambit of such commissions.
However, the new billing policy has been facing major backlash from the Indian startup ecosystem with the likes of Paytm, Matrimony.com, and MapmyIndia urging the CCI to probe the policy.
Anupam Mittal, founder and CEO of People Group called Google ‘Digital East India Company’. On the other hand, Matrimony CEO and founder Murugavel Janakiraman said that the fight would continue till the tech giant stops its ‘monopoly behaviour’ of taxing Indian startups.
Google’s Tumultuous Present
It must be noted that Google has been at loggerheads with the CCI for a few years now over its alleged market dominance in the Android market and Play Store ecosystem. The tech giant recently introduced the user choice billing system following the competition watchdog slapping a fine of INR 936 Cr on it last year for anti-competitive practices in relation to its Play Store policies.
The Commission also directed the tech major to open up the ecosystem and enable app developers to use any third-party billing and payment processing services. The new billing policy was intended to replace the previous Google Billing Payments System (GBPS).
However, in a recent plea before the Delhi High Court, several Indian startups, under the banner of the Alliance Of Digital India Foundation (ADIF), sought directions for the CCI to look into the ‘abusive dominance practices’ of Google and called for keeping the new billing system in abeyance.
The ADIF also termed the 11%-26% service fee for in-app purchases under the new system a death knell for the Indian startup ecosystem.
As per the ADIF, the new billing policy is a ‘cloaked version’ of the previous one. The industry body said that the high commissions are in contravention of the CCI’s directives issued in October last year. Taking cognisance of the matter, the Delhi HC told the competition watchdog to take up the complaints of Indian startups.
Subsequently, the CCI directed the tech major to file a “detailed response” to a set of queries mentioned in the order, including information on its processes and internal policies regarding data sharing, data-steering provisions, and user choice billing policy. Google has been given four weeks’ time to provide its responses.
