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Google faces fresh antitrust probe from CCI over market abuse, Google Pay promotion

The Competition Commission of India has launched a probe against Google over multiple aspects, including the invariable promotion of Google Pay app in India.

twitter-logoShubham Verma | November 10, 2020 | Updated 10:14 IST
Source: Reuters

Highlights

  • The Competition Commission of India has launched an antitrust probe against Google.
  • Google is alleged to have misused its market dominance to promote Google Pay.
  • The filing also brings Google under scrutiny over the Play Store 30 per cent fee.

Google is facing another antitrust scrutiny over its Android dominance, Google Pay payments app, and 30 per cent cut on Play Store apps. After the US, India is going after the tech giant with the fresh probe launched by the Competition Commission of India (CCI). Under this case, the government body has alleged that Google is using its market power to charge the 30 per cent fee while giving fewer chances to competitors in India. One of the aspects of this case is majorly against Google Pay and its omnipresence in the Android ecosystem.

The first instance of the antitrust case emerged back in May when CCI had ruled against Google over the anti-competitive promotion of its payments app. But the fresh probe goes beyond Google Pay. The antitrust watchdog has made several enquiries regarding Google Play's in-app purchase system, market abuse, and the "take it or leave it" condition for developers if they want to operate inside the Play Store ecosystem on Android devices in India. This is a trailing case over Google's 30 per cent cut that first sparked a conflict between Google and many developers, including Fortnite maker Epic Games, in the US.

In India, Paytm and over 150 other developers decried Google's mandate that forces them to pay a 30 per cent fee on all purchases made using the Play Store billing system last month. In case, a developer refuses to comply, Google removes the app associated with the developer from the Play Store. In fact, Google had previously said that a large fraction of developers already complies with the rules. Google had given a September 2021 deadline for enforcement of the Play Store billing policy but it postponed it to April 2022 for Indian developers who are still to come to terms with the policy.

CCI is launching a probe on Google's rule that all developers will have to abide by over a year later. "...Google has imposed an unfair condition on both sides of the platform, i.e., app providers as well as users. The condition imposed by Google is unfair to the app providers as it restricts their choice in terms of preferred payment partners and preferred modes of payment. The condition being imposed by Google is unfair to users as their choice regarding the mode of payment is being restricted," said the filing (via MediaNama).

Another aspect is that Google is collecting data on competing apps that are available to users as a part of the Play Store. The probe has alleged that Google is keeping tabs on its rivals for downstream services, such as music streaming and ebooks, and using the data to improvise its own services. That 30 per cent cut plays a role here, as well. The services of rival platforms are competitively charged while Google can undercut the rival services using free trials and discounts.

This aspect also involves the Google Pay payments app that comes preloaded on Android smartphones. According to the filing with the Competition Commission of India, this move leaves no choice but to agree to the terms and conditions of Google. The biggest allegation here is that Google promotes its Google Pay on the top of results for a payment-related search term. The first result is never Paytm or PhonePe. Google is also alleged to have "rigged" the "User Choice" and "Editor's Choice" sections for the payment app category on Play Store.

The filing has, however, cited Google refuting some of the allegations. CCI has noted that Google has said that the Google Pay installations on Android devices is a part of separate agreements. It has also rebuffed that Android is not "dominant" in India and that it faces "significant competition" from the feature phone operating systems, such as KaiOS available on JioPhone which is a popular device in its segment. The investigation encompasses these claims made by Google, as well.

"We are pleased that the CCI has rejected several claims made by the anonymous complainant. On the remaining concerns, first, we are confident that the CCI will 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," a Google spokesperson told India Today Tech.

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