Google’s 10-30% Service Fee On App Purchase Hindering App Developers: CCI Tells NCLAT

SUMMARY

CCI’s comments came on the final day of its arguments at the NCLAT where Google’s parent Alphabet Inc has appealed against an earlier order of the competition watchdog

The app developers on Google Play Store are required to use the Google Play Billing System (GPBS) to receive payments for buying apps

The CCI counselsaid that GPBS seizes the choice from app developers as well as the users

The Competition Commission of India (CCI) has reportedly argued at the National Company Law Appellate Tribunal (NCLAT) that Google’s 10-30% service fee on app purchase via Play Store hinders app developers’ ability to invest in technology and service improvements.

As per ET, CCI’s comments came on the final day of its arguments at the NCLAT where Google’s parent Alphabet Inc has appealed against an earlier order of the competition watchdog.

The app developers on Google Play Store are required to use the Google Play Billing System (GPBS) to receive payments for buying apps and other digital products, including audio, video and games. Additionally, It also charges a fee for certain in-app purchases.

“If developers are given the choice to use other payment processors, they would be charged around 1%, and it would have left the app developers with more money to invest in producing better content and developing better technology,” the CCI counsel told NCLAT.

The counsel further said that GPBS seizes the choice from app developers as well as the users.

The Google vs CCI saga began back in 2022, when the competition watchdog imposed two major fines of INR 936 Cr and INR 1,337.6 Cr on the tech giant for allegedly abusing its dominant position by leveraging 15-30% service charge on its play store and for its anti-competitive practices in the Android devices market.

After the imposition of the penalty, Google made changes in its billing system which reduced its commission rates to 11-26%, giving a rebate of 4%. However, as per CCI, the fee still remained high and the authority ordered a probe into the tech giant’s contentious user choice billing system in March 2024.

Besides, a few months back, gaming startup WinZO accused Google of abusing its dominant position in the app store and digital advertising markets. The startup blamed that the tech giant’s policies unfairly harmed real-money gaming (RMG) apps. On the back of it, CCI ordered an investigation into Google.