Google under the Radar by CCI
The Competition Commission of India (CCI) fined Alphabet Inc.’s Google Rs 936.44 crore for abusing its dominant position with regard to its Android Play Store policy. The Commission also issued a cease-and-desist order and gave Google a deadline to change its behaviour. Google Play must execute eight corrective actions that the regulator specified in order to stop the anti-competitive behaviour. It’s interesting to note that Google has now received a fine from India’s competition commission twice in less than a week.
The First Fine
The US-based tech giant was fined Rs 1,337.76 crore by the competition commission on October 20 for abusing its dominant position in certain areas to push its payments app and in-app payment system. The internet giant was also told to stop engaging in a number of unfair commercial practices by the watchdog.
Crux of the Case
The regulation of the Google Play store, which mandates that app developers only use Google Play’s Billing System (GPBS) for all consumer billings, is at the heart of the dispute. This system must be utilised for client in-app purchases and payments received from the apps. It is forbidden for any app developer to list their software on the Google Play store without using GPBS.
Making access to the Play Store reliant on the requirement to use GPBS for in-app and paid app purchases is arbitrary, one-sided, and lacking in any genuine commercial purpose, according to the CCI.
For app developers, the sale of in-app digital items is a crucial way to commercialise their inventions and creations. Developers must set up their apps such that all digital goods purchases go through Google’s payment system, which handles the transactions, in order for in-app digital goods to be given to customers who make purchases.
The Competition Commission of India (CCI) stated in a release that it has also been instructed to adjust its behaviour within a specific timeframe.
Google has also come under fire for requiring software developers using its app store to adopt a proprietary in-app payment system that levies fees of up to 30% on sales made within an app. This practice has drawn ire across the globe, including in South Korea. Google has recently started to accept other payment methods in more nations.
Investigation
According to its evaluation, the commission declared that requiring app developers to use the Google Play Billing system for paid applications and in-app purchases on the Google Play Store “constitutes an imposition of unfair conditions on app developers” and is therefore in violation of its rules.
The investigation also revealed that the tech giant was not using its billing system for its own applications, such as YouTube, which amounted to “implementation of prejudiced conditions as well as pricing” because its own applications are not paying the app commission that is imposed on other applications.
The mandatory adoption of this billing system, according to the commission, “impairs innovation incentives and the capacity of both the payment processors and the app developers to undertake technical development and innovate,” and is thus equivalent to stifling technical advancement in the market for in-app payment processing services.
The commission stated in its order that this breaches its terms because it prevents payment aggregators and app developers from accessing the market.
CCI’s Measures
The tech giant was further advised not to discriminate against or take any negative actions against such apps that make use of third-party invoicing or payment processing services.
It’s important to keep in mind that Google is presently launching a pilot programme in India and a few other countries that allow participating developers to provide consumers with a different billing system in addition to Google Play for a lower service cost ranging from 6-11 percent. Game creators are not included in this pilot, though.
In its order from today, CCI also stated Google should guarantee total openness with regard to the service it offers and the associated price it charges app developers. No “unfair, unjustified, discriminatory, or disproportionate” requirements, including those that are price-related, shall be placed on app creators.
Indian app developers have been strongly critical of Google’s app restrictions in recent years, especially after the firm said in October 2020 that it will start imposing a requirement for the integration of its Play payment system.
Since then, Google has several times delayed the policy deadline, with the most recent postponement just applying to the Indian market. While it is already required in other countries, app makers in the nation now have until October 31, 2022, to abide by the Play charging policy.
Conclusion
According to the decision, the internet giant must establish a clear and open policy about the data that is collected on its platform, how it uses that data, and whether it ever shares that data with app developers or other parties, including connected parties.
Google shouldn’t “advance its competitive advantage” by using the “competitively relevant” transaction or consumer data collected and acquired through the Google Play billing service. Subject to appropriate controls, it added, app developers should also have access to this data created about their own apps.
The competition commission has also opened similar antitrust investigations against Google in addition to Android and Google Play because of its alleged monopoly in a number of industries, including news aggregation and smart TVs.
Apple, a competitor of Google, is also under investigation for antitrust violations by the CCI for the operations of its app store.
