CCI to inquire whether Google’s user choice billing policy violates its order

Google Vs CCI

The Competition Commission of India (CCI) on May 12 said that it needs to inquire into tech giant Google's new users’ choice billing policy and check whether the company has complied with its October 2022 order asking the tech major not to restrict app developers from using third-party billing system.

According to the order, accessed by Moneycontrol, the CCI has observed the following and asked Google to respond to the same

1.      Changes in billing system policy made only in respect of app developers offering apps to users in India and not in respect of Indian app developers offering apps to users outside India.

2.      The order notes that app developers have been allowed the option of an alternative billing system only in respect of in-app purchases, however, CCI's order was applicable for paid apps also.

3.      App developers are still required to use Google Play Billing System as one of the billing options

4.      Users Choice Billing (UCB) has been extended on a selective basis and the same has not been extended for gaming applications. Google has to clarify whether all app developers have been allowed the option of third-party billing/ payment processing services.

5.      CCI has further raised concerns about the fact that Google has not complied with its directions regarding anti-steering provisions and has noted that it continues to be part of its payment policy of Google.

The CCI order, accessed by Moneycontrol, noted that the tech giant is yet to file a detailed response to the allegations made by a bunch of Indian start-ups against the company. Google has been asked to explain in detail the policies regarding billing services separately for paid apps and in-app purchases and anti-steering provisions, before and after User Choice Billing (UCB).

Moreover, Google has been asked to furnish a copy of the amended policies after implementing various directions of the Commission in its October 2022 order.

The tech giant has been directed to provide details regarding all of CCI's queries in four weeks. The case will come up for hearing again in six weeks.

Background

On April 24, Justice Tushar Rao Gedela of the Delhi High Court asked CCI to hear applications moved by a group of Indian start-ups against Google’s new in-app user choice billing policy and take a decision on or before April 26.

The Alliance of Digital India Foundation (ADIF) moved the court against the competition regulator and the search engine giant, seeking CCI to urgently investigate Google's user choice billing system (UCB) as it violates the anti-trust watchdog's October 25, 2022, order. Google was to introduce the new billing system on April 26.

The petition sought a directive to CCI to invoke the 'doctrine of necessity' (extraordinary actions by administrative authority) to investigate Google's alleged violation of the regulator's guidelines and pass an order as CCI does not have the quorum to adjudicate anti-trust cases. It also sought a stay on Google's implementation of the UCB till the investigation was over.

ADIF, a think tank, filed the case and urged CCI to stay Google's new billing policy. Under the new policy, if a user pays through the alternative billing system (also termed user choice billing system), the transaction will still be subjected to a service fee, but at a 4 percent rate reduction.

In October 2022, CCI directed Google to not restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play besides a range of corrective measures to modify the company's app payment policies.