India’s antitrust watchdog fined Google $113 million for abusing its Google Play Store’s dominance and ordered the company to allow app developers to use processing services third-party payments for in-app purchases or for purchasing apps, the second of its kind. penalty on the Android maker in as many weeks in its biggest market by users.
India’s Competition Commission, which opened the investigation into Google in late 2020, said forcing developers to use Google’s own billing system for paid apps and in-app purchases through Play Store “constitutes an imposition of unfair terms” and thus violates the provisions of Section 4(2)(a)(i) of the Act.
The regulator — who interviewed several industry players including Paytm, Zomato, Info Edge, Samsung, Vivo, Xiaomi, Microsoft and Realme as part of the investigation — said that Google not using its billing system for its own applications such as YouTube amounts to “imposition of discriminatory conditions”.
The investigation also concluded that:
Compulsory taxation of GPBS [Google Play Billing System] disrupts the incentives for innovation and the ability of payment processors and application developers to undertake technical development and innovate, which amounts to limiting technical development in the market for integrated payment processing services. in violation of the provisions of the law. Thus, Google is found to have violated the provisions of section 4(2)(b)(ii) of the Act.
The mandatory imposition of GPBS by Google also results in the denial of market access for payment aggregators as well as application developers, in violation of the provisions of Article 4(2)(c) of the law.
The practices followed by Google have the effect of taking advantage of its dominant position in the market for licensed mobile operating systems and application stores for the Android operating system, in order to protect its position in downstream markets, in violation of the provisions of Article 4, paragraph 2, point e) of the law.
Different methodologies used by Google to integrate its own UPI application vis-à-vis other competing UPI applications, with the Play Store result in violation of Sections 4(2)(a)(ii), 4(2)(c) and 4(2)(e) of the Act.
India is Google’s largest market in terms of users. The company has poured billions of dollars into the South Asian market over the past decade as it aggressively sought to find large untapped regions around the world to accelerate its growth.
The company reaches almost all of India’s 600 million internet users. Android controls 97% of the local smartphone market. Its payment app, Google Pay, is the second largest payment on the UPI network, an infrastructure built by a coalition of banks that has become the most popular way for Indians to transact online.
The antitrust watchdog has ordered Google to introduce a series of changes to its Play Store policies, which, like allowing developers to use a third-party billing system, must be brought into compliance within three months :
Google will not impose anti-steering provisions on app developers or prevent them from communicating with their users to promote their apps and offers in any way.
Google will in no way restrict end users from accessing and using any features and services offered by app developers in the apps.
Google will define a clear and transparent policy on the data collected on its platform, the use of this data by the platform as well as the potential and actual sharing of this data with application developers or other entities, including related entities.
Competitively relevant transaction/consumer data from applications generated and acquired through GPBS should not be leveraged by Google to enhance its competitive advantage. Google will also provide the app developer with access to data generated through the affected app, subject to adequate safeguards as set out in this order.
Google will not impose any condition (including a price-related condition) on App Developers that is unfair, unreasonable, discriminatory or disproportionate to the services provided to App Developers.
Google must ensure full transparency in communicating to app developers, the services provided and the corresponding fees charged. Google will also unequivocally publish the payment policy and the criteria for the applicability of charges.
Google will not discriminate against other apps facilitating payment through UPI in India against its own UPI app in any way.
“The Commission hereby orders Google to cease and desist from engaging in anti-competitive practices,” CCI said in a statement on Tuesday.
Google and Apple have faced heat from developers around the world in recent years for asking them to use their own billing systems and therefore rack up considerable commissions. In response, Google began exploring the possibility of offering developers in certain markets, including India, the option of using a third-party payment system for Play Store purchases.
Last week, the antitrust regulator fined Google $161.9 million for anticompetitive practices related to Android mobile devices and took a series of tough remedial actions.
The watchdog was investigating whether Google had gained a dominant position in five different markets: licensed operating system for smartphones, app store, web search services, non-OS-specific mobile web browsers and online video hosting platform in India. Google was dominant in all of those relevant markets, the regulator concluded.
The antitrust watchdog says device makers shouldn’t be forced to install Google’s bouquet of apps and the search giant shouldn’t deny access to its Play Services APIs and incentives monetary and other to suppliers. Amazon told the regulator that more than half a dozen hardware vendors had indicated they could not enter into TV manufacturing relationships with the e-commerce group for fear of retaliation from Google.
In response to last week’s order, Google said CCI’s decision was a “major setback for consumers and businesses”, exposed them to “serious security risks” and would increase the “cost of mobile devices for Indians”.
Google said Tuesday its legal team was evaluating the order and had no immediate comment. He expressed concerns about the evidence the regulator relied on to reach its conclusion, CCI said in the order.
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