The country’s antitrust body has stated that Google used its ‘dominant position’ to restrict app developers from using third-party billing or payment processing services in India and made mandatory the use of its in-app payment system, noting that selling in-app digital goods is a key means for monetising developers’ work.
The CCI’s move marks the latest setback for Google when it comes to one of its priority markets, where it was fined an additional USD 162 million by the watchdog, fine related to its Android operating system anti-competitive practices, and was requested to make changes to its Android platform approach.
As cited by Reuters, a Google spokesperson stated that by keeping costs low, their model helped power India’s digital transformation and expanded access for an increased number of Indians, continuing with the fact that, being committed to their users and developers, they are reviewing the decision to evaluate what the next steps to be taken are.
The orders can be appealed by the US giant in an Indian tribunal.
Additionally, Google was asked to adopt within three months eight remedies or operations adjustments, including no longer restricting ‘app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps’, as per the 199-page CCI order. The CCI also added that Google should ensure complete transparency when it comes to communicating with app developers and details about charged service fees.
For Indian startups and smaller companies, the order would come as a relief, as they have long objected against Google’s policy of imposing on app developers the use of its own payments system.
Google’s payment ecosystem investigation started in 2020, following an antitrust case that was filed against Google, with the identity of the complainant having been kept confidential by the watchdog at their request. An antitrust partner at the law firm which represented the complainant stated for Reuters that CCI’s order will help ensure healthy competition and reduce costs for app developers, continuing to say that ‘the CCI order directing Google to allow alternate payment processing systems will remove the artificial barrier that Google had erected’.
Google responded and stated that CCI’s move represents ‘a major setback for Indian consumers and businesses’, adding that they will be reviewing the order and decide on its next steps.
Furthermore, the search engine giant is facing a separate business conduct probe in the Indian smart TV market.
With mandating software developers to use a proprietary in-app payment system when using its app store, Google has faced criticism globally, including South Korea, as purchases made within an app are charged commissions of up to 30%.
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