The two counts which the CCI is investigating include 'Exclusivity Regarding Mode of Payment for Purchase of Apps and In-App Purchases (IAPS)' and 'Pre-installation and prominence of Google Pay on Android Smartphones'
India’s antitrust regulator has initiated a probe against Google for allegedly abusing its dominant position to force app makers to exclusively use its billing system for in-app purchases and for bundling the search giant’s payments app with Android smartphones sold in the country.
While the Competition Commission of India (CCI) received complaints against Google on six counts, it has chosen to investigate only two for violations of antitrust rules. On the other four counts, the commission said the complainant hasn’t provided enough proof to launch an investigation.
The two issues, which the CCI is investigating, relate to “exclusivity regarding the mode of payment for the purchase of apps and in-app purchases" and “pre-installation and prominence of Google Pay on Android smartphones".
The CCI said complaints related to search manipulation to favour Google Pay; prominent placement of Google Pay on Play Store; search advertisement manipulation on Play Store, and exclusivity requirements imposed by Google did not merit a probe.
The regulator’s investigation follows complaints by Indian startups against Google’s policy, requiring apps to mandatorily use Google’s payment tools for selling services through the Play Store.
While the complaints centre around Google Pay, its outcome could have a broader impact on how the company enforces its Play Store rules in India.
If CCI concludes Google has indeed violated rules, it would be a shot in the arm for Indian startups, which have been protesting against Play Store’s decision to charge a 30% commission for in-app sales.
Startup founders, including Paytm’s Vijay Shekhar Sharma and Razorpay’s Harshil Mathur, have criticized Google for making it mandatory for app makers to use its own payment tools for purchases made through the Play Store.
Kanika Chaudhary Nayar, a partner at L&L Partners, said CCI has the power to penalize Google based on the average of its relevant turnover for the past three years. This is similar to the ₹135.86 crore fine levied on the tech giant in 2018 for abusing its dominance in internet search.
Nayar also said that while CCI has the power to break up Google and bar Google Pay from being bundled with Android phones, the regulator hasn’t exercised the power despite the law being there for more than 11 years now.
Google said in a statement: “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."