India’s antitrust regulator has fined Google with a $113million penalty for abusing its dominant position in Google Play Store. The firm was ordered to allow developers to use third party payments processing services to make in-app purchases and purchase apps. This is the second such sanction on Google in as many weeks, in India’s largest market by users.
The Competition Commission of India opened the investigation into Google in late 2020,. It stated that requiring developers to use Google’s billing system for paid apps, in-app purchases via Play Store and other services “constitutes a condition of unfairness” and violates Section 4(2)(a(i) of Act.
The regulator, who interviewed several industry figures, including Paytm and Zomato, Info Edge and Samsung, Vivo as part of the investigation, stated that Google’s use of its billing system to pay for apps like YouTube amounts “to imposition of discriminatory terms .”
The investigation also revealed that:
The mandatory imposition of GPBS (Google Play Billing System) disrupts innovation incentives as well as the ability of both payment processors and app developers to engage in technical development and innovate. This is tantamount to limiting technical developments in the in-app payment processing market. In violation of the Act. Google is therefore found to have violated Section 4(2)(b),(ii) of Act.
Google’s mandatory imposition of GPBS results in the denial of market access to payment aggregators and app developers. This is in violation of Section 4(2)(c), of the Act.
Google’s practices result in it leveraging its market dominance in mobile OS licensing and app stores for Android OS to preserve its position in downstream markets. This is in violation of Section 4(2)(e), of the Act.
Google’s use of different methods to integrate its UPI app with other UPI apps on the Play Store is a violation of Sections 4(2) (a), 4(2) (c), and 4(2) (e) of this Act.
India, Google’s biggest market by users, is India. Google has invested billions of dollars into South Asia over the past decade, as it aggressively sought to locate major untapped areas worldwide to boost its growth.
The company has reached almost all of India’s 600 millions internet users. Android dominates 97% the local smartphone market. Google Pay, its payments app, commands 97% of the local smartphone market. It is the second-largest payment on the UPI network. This infrastructure was built by a group of banks and has been the most popular way Indians transact online.
The antitrust watchdog directed Google to make a number of changes to its Play Store policies. These include allowing third-party billing to developers. Compliance must be completed within three months.
Google will not impose anti-steering requirements on app developers, and they shall not limit their ability to communicate with their users in any way to promote their apps or offerings.
Google will not limit end users’ access to and use of apps, features and services offered in any way by app developers.
Google will establish a clear policy regarding data collection and use on its platform. This policy will also include the possibility and actual sharing of such information with app developers and other entities.
Google shall not use the competitively relevant consumer/ transaction data from apps that were acquired through GPBS to enhance its competitive advantage. Google will also give access to the app developer to any data generated by the affected app. However, this must be done with the appropriate safeguards as highlighted in the order.
Google will not impose any condition (including price-related condition) on app developers that is unfair, unreasonable or discriminatory in relation to the services provided.
Google will ensure transparency when communicating with app developers about the services received and the corresponding fees charged. Google will also publish clearly the payment policy and the criteria for determining the applicable fee(s) in plain English.
Google will not discriminate against any other app that facilitates payment via UPI in India, vis-a-vis its UPI app.
” The Commission directs Google to stop engaging in anti-competitive activities,” CCI stated in a Tuesday statement.
Google has been criticized by developers around the world for making it mandatory that they use their billing systems, and thus racking up significant commissions. Google is exploring the possibility of offering third-party payment systems to developers in certain markets, including India, for purchases on Play Store.
Last Wednesday, the competition regulator fined Google $161.9million for anti-competitive behavior related to Android mobile phones. It also made a number of strict redressal steps.
The watchdog investigated whether Google held a dominant position in five markets: India, India, India, app store, search services, non-OS mobile web browsers, and India’s online video hosting platform. The regulator concluded that Google was the dominant player in all relevant markets.
The antitrust watchdog stated that device manufacturers shouldn’t be forced to use Google’s apps. It also said that Google should not refuse access to its Play Services APIs or monetary incentives to vendors. Amazon informed the regulator that more than half a dozen hardware suppliers had stated that they were unable to enter into a manufacturing relationship with the ecommerce group for TVs due to fear of being retaliated by Google.
Google responded to the order last week by saying that CCI’s decision was “a major setback for consumers, businesses,” open them to “serious cybersecurity risks” and will increase the “cost for mobile devices for Indians .”
Google stated Tuesday that its legal team was evaluating the order. It did not have any immediate comments. CCI stated in the order that it expressed concern about the evidence used by the regulator to reach its conclusion.
Google’s pushback on the evidence the competition regulator relied on to reach its conclusion. The 177 order page.
A spokesperson for Google said Wednesday that Indian developers have enjoyed the technology, security and consumer protections offered by Android and Google Play. Our model has enabled India’s digital transformation, and provided access to hundreds of millions more Indians by keeping costs low. We are committed to our developers and users, and we will continue to review the decision to determine the next steps .”
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