Google, according to the Competition Commission of India (CCI), utilized its “dominant position” to push app developers to adopt its in-app payment mechanism.
Alphabet’s Google should not bar app developers from utilizing third-party billing or payment processing services in India, according to the country’s antitrust commission, which fined Alphabet $113 million (approximately Rs. 932 crore) for anti-competitive conduct on Tuesday.
According to the Competition Commission of India (CCI), Google exploited its “dominant position” to compel app developers to utilize its in-app payment system, despite the fact that the sale of in-app digital products is a critical mechanism for developers to monetize their work.
The CCI’s decision is the latest setback for Google in one of its priority markets, where the watchdog fined it another $162 million (roughly Rs. 1,336 crore) on Thursday for anti-competitive practices related to its Android operating system and asked it to change its approach to its Android platform.
The US conglomerate may challenge the directives in an Indian court.
Aside from the fine, Google was ordered to implement eight remedies or operational changes within three months, including not prohibiting “app developers from using any third-party billing/payment processing services, either for in-app purchases or for purchasing apps,” according to the 199-page CCI order.
According to the CCI ruling, Google shall maintain total openness in interacting with app developers, as well as facts regarding service costs imposed.
The judgment would be a huge relief for Indian startups and smaller businesses that have long opposed Google’s strategy of forcing app developers to adopt its own payment system.
The examination of Google’s payment infrastructure began in 2020, after the filing of an antitrust action against Google. On the complainant’s request, the watchdog kept his name private.
According to Naval Chopra, an antitrust lawyer at India’s Shardul Amarchand law firm, which represented the complaint, the CCI’s judgment would assist promote healthy competition and lower costs for app developers.
“The CCI judgment requiring Google to accept other payment processing platforms would eliminate the artificial barrier that Google has constructed,” Chopra said, denying to reveal the identity of the complainant on whose behalf he brought the case.
The search engine behemoth is also under investigation for its commercial practices in the Indian smart TV sector.
It had dubbed CCI’s decision on Thursday a “significant setback for Indian consumers and companies,” adding that it will analyze the verdict and determine future measures.
Google has been chastised across the world, including in South Korea, for requiring software developers using its app store to adopt a proprietary in-app payment mechanism that charges up to 30% commission on transactions made inside an app. Google has recently began to accept other payment options in additional countries.
According to Counterpoint Research, Google’s Android operating system powers 97 percent of India’s 600 million cellphones.
“Indian developers have profited from Android and Google Play’s technology, security, consumer safeguards, and unequaled choice and freedom. Our methodology has also fueled India’s digital revolution and provided access for hundreds of millions of Indians by keeping prices low. We are still dedicated to our users and developers, and we are assessing the decision to determine the next steps “In a prepared statement, a Google representative stated.
© Thomson Reuters 2022
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