India Slashes Antitrust Case Against Google on its Payment App

The Competition Commission of India (CCI) has ordered a detailed probe against Google alleging unfair business practices pertaining to Google Pay as well as Google Play’s payment system.

Google Pay may be a popular digital payments platform while Google Play is that the app store on its Android ecosystem. The CCI is of the prima facie view that the opposite parties have contravened various provisions of Section 4 of the Act. These aspects warrant a detailed investigation.

The watchdog has ordered an in-depth probe by its Director General (DG), which is that the investigation arm, for alleged anti-competitive practices with reference to Google Pay.

According to the regulator, “the said conduct of Google amounts to imposition of unfair and discriminatory condition, denial of market access for competing apps of Google Pay and leveraging on the part of Google, in terms of various provisions of Section 4(2) of the Act. Mandatory use of the application store’s payment system for paid apps and in-app purchases restricts the choice available to the app developers to select a payment processing system of their choice especially considering when Google charges a commission of 30 percent (15 percent in certain cases) for all app purchases and IAPs.”

The CCI is of the prima facie view that the market for apps that enabling payment through the Unified Payments Interface (UPI) appears to be a distinct relevant market apt for the assessment of allegations in the present matter, states the order.

Considering that play is the dominant source of downloading apps in the Android OS (90 percent of the downloads) and its condition that is required to use the application store’s payment system for paid apps and IAPs, it appears that Google controls the many volumes of payments processed during this market.

The resultant market power has been enjoyed by Google due to its grip over the Andriod ecosystem apparently has resulted in allegedly high commission fees at 30 percent. However, the Indian app developers have been revealing their concern regarding Google’s move to charge a 30 percent commission on paid apps and IAPs. Similarly, many such developers have stated that Google cannot force a domestic app developer to sell digital services by compulsory use of its billing systems.

The probe has been ordered against five entities namely Google Ireland, Alphabet Google, Google India, and Google India Digital Services.