Google under CCI lens; regulator orders probe against Google Pay

Google said the CCI would find that GPay operates in an extremely competitive environment and owes its success to its ability to offer consumers a simple and secure payments experience

CCI looks into Google Pay CCI looks into Google Pay

The Competition Commission of India (CCI) ordered an investigation against Google on Monday over allegations of abuse of dominance. The investigation will focus on two allegations out of several filed by an unnamed informant. The complaint stated that Google favours Google Pay over competing apps through its control over Play Store and Android, which is tantamount to abuse of dominant position. Pre-installation and prominence of Google Pay are also under the scanner.

The CCI said in the order that based on the information available on record, the commission is prima facie convinced that the matter must be investigated by the Director General. The DG's report would be submitted within 60 days.

The order said that the commission is of the view that the market for apps facilitating payment through Unified Payments Interface (UPI) appears to be a distinct relevant market for the assessment of allegations in the present matter. According to the regulator, it is of "the prima facie view that 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 different provisions of Section 4(2) of the Act".

Meanwhile, Google said that the tech giant is pleased that the CCI rejected several claims of the complainant. It said the CCI would find that GPay operates in an extremely competitive environment and owes its success to its ability to offer consumers a simple and secure payments experience. "Secondly, numerous distribution channels exist for apps on the Android platform; Play is not the only app distribution option for Android. Users choose Google Play because we ensure a safe, secure, and seamless experience. Play's billing system is a fundamental part of meeting this user expectation and helps ensure our continued investment in the many important things needed to make developers successful," it said.

The CCI said that the mandatory use of Google Pay's payment system for paid apps and in-app purchases restricts the choice available to app developers in selecting a payment processing system of their choice. The order said that considering that Play is the dominant source of downloading apps and the condition to use the app's payment system for paid apps and in-app purchases, Google appears to be controlling a significant volume of payments in the market. The resultant high commission fee of 30 per cent was also questioned by the CCI.

Indian app developers have been voicing concerns over Google's move to charge 30 per cent commission on paid apps and in-app purchases. Many such developers have said that Google cannot force domestic app developers and owners to sell digital services by compulsory use of its billing system.

"Such a policy of the application store may disadvantage its competitors in the downstream markets, such as music streaming, e-books and audiobooks etc. If the application developers, in response, raise their subscription fees to offset these costs or remove or reduce premium or paid subscription offers for users, it may affect user experience, cost and choice," the regulator said.

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