The Competition Commission of India (CCI) fined Google Rs 936.44 crore on October 25 for abusing its dominant position with regard to its Play Store policies, in addition to issuing a cease-and-desist order.
It has directed the tech giant not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play apart from a series of measures to modify the company's app payment policies within three months.
This is the competition watchdog's second such penalty in as many weeks. On October 20, it fined the tech giant Rs 1,337.76 crore for abusing its dominant position in multiple markets in the Android Mobile device ecosystem.
At the time, Google had stated that this decision is a "major setback for Indian consumers and businesses" and they will review the decision to evaluate the next steps. It is yet to respond to CCI's latest order.
Google has been given 30 days to provide the requisite financial details and supporting documents, CCI said.
The investigation
In November 2020, the CCI ordered an investigation into the mandatory use of Google Play Store's payment system for paid apps and in-app purchases. The commission had then said it is of prima facie view that such a policy is unfair as it restricts the ability of app developers to select a payment processing system of their choice.
Based on its assessment, the commission said on October 25 that mandating app developers to use Google Play Billing system for paid apps and in-app purchases on Google Play Store "constitutes an imposition of unfair conditions on app developers" and thus violates its provisions.
The investigation also found that the tech giant was not using its billing system for its own apps such as YouTube, which amounts to "imposition of discriminatory conditions as well as pricing" because its own apps are not paying the app commission that is imposed on other apps.
The commission said the mandatory imposition of this billing system "disturbs innovation incentives and the ability of both the payment processors as well as app developers to undertake technical development and innovate," and therefore is equivalent to limiting technical development in the market for in-app payment processing services.
It also results in the denial of market access for payment aggregators as well as app developers, which violates its provisions, the commission said in its order.
CCI's measures
CCI has directed Google not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing.
It added that the tech giant should not discriminate or take any adverse measures against such apps using third-party billing or payment processing services.
It's worth noting that Google is currently running a pilot programme in India and a few other countries, wherein participating developers can offer an additional billing system to users in addition to Google Play for a reduced service fee ranging from 6-11 percent. This pilot, however, excludes game developers.
In its order today, CCI also noted Google should ensure complete transparency in terms of the service it provides and the corresponding fee it levies from app developers. It should not impose any "unfair, unreasonable, discriminatory or disproportionate" conditions on app developers including price-related conditions.
In recent years, Google has faced intense backlash from Indian developers over its app policies, particularly after the company's announcement in October 2020 that it will begin enforcing a mandatory integration of its Play billing system.
Google has since then extended the policy deadline a few times, with the last extension restricted to the India market. App developers in the country now have to comply with the Play billing policy by October 31, 2022, while it has already been made mandatory in other markets.
CCI also noted in its order today that Google cannot restrict app developers from communicating with their users or direct them outside the Google Play ecosystem (anti-steering) to promote their apps and offerings.
In addition, the order states that the tech giant should set out a clear and transparent policy on data that is collected on its platform, use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities, including related entities.
The "competitively relevant" transaction or consumer data generated and acquired by Google Play billing service, should not be used by Google to "further its competitive advantage". App developers should also get access to this data generated about their respective apps, subject to adequate safeguards, it added.
Further, Google should not discriminate against other UPI apps facilitating payments vis-à-vis its own UPI app in any manner, CCI said in the order.
Apart from Android and Google Play, the competition watchdog has also initiated similar antitrust investigations against Google over its alleged dominance in smart TV business, and news aggregation, among others.
Google rival Apple is also facing a similar antitrust probe by the CCI over the business practices of its app store.
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