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India initiates an antitrust investigation into Google’s app store payment policies.

ByYasmeeta Oon

Mar 19, 2024
India initiates an antitrust investigation into Google's app store payment policies

In a significant development, India’s antitrust authority, the Competition Commission of India (CCI), has initiated an inquiry into Google’s practices surrounding its in-app billing system. This move underscores escalating tensions between the American technology behemoth and the Indian app development community, with accusations of “unfair” and “discriminatory” policy implementations at the forefront.

The CCI’s action emanates from grievances aired by Indian app developers and various industry bodies. These stakeholders have voiced concerns over what they perceive as Google’s oppressive and unfair practices, particularly regarding the tech giant’s in-app purchase policies within the Play Store.

The friction between Google and Indian developers intensified last month when Google removed over 100 applications developed by 10 Indian entities from its Play Store. The company cited persistent non-compliance with its billing policies as the reason for this drastic step. Although Google later reinstated these apps, the incident left Indian developers with no choice but to align with Google’s Play Store billing protocols. This sequence of events led the aggrieved parties to seek CCI’s intervention, prompting the regulatory body to scrutinize Google’s practices under a legal and ethical microscope.

  • Exorbitant Service Fees: The CCI has raised concerns about Google charging app developers service fees ranging from 10% to 30%. The commission argues that such fees are not only excessive but also disproportionate to the actual value of services Google provides, labeling the pricing as inherently unfair.
  • Discriminatory Policy Implementation: Another significant accusation leveled against Google involves the alleged arbitrary distinction between apps offering digital goods and services and those dealing with physical goods and services. According to the CCI, such differentiation, especially given the similar facilities availed on the Play Store, amounts to discriminatory practice.

In its comprehensive 21-page order, the CCI articulated these concerns, mandating its investigative arm to conclude the probe within 60 days. The order meticulously outlines the perceived violations of India’s antitrust laws by Google, setting the stage for a thorough investigation into the tech giant’s billing system and policy implementations.

In response to the CCI’s allegations, Google is currently evaluating the order. A spokesperson from the company highlighted that the CCI had previously scrutinized Google’s service fee structure between 2020 and 2022, finding no illegalities. Nevertheless, Google emphasizes its dedication to adhering to India’s laws and regulations, expressing its intention to fully cooperate with the ongoing investigative process.

India stands as Google’s largest market in terms of user base, yet the company has faced multiple allegations of anti-competitive behavior in this crucial region. Google has invested over $10 billion in India, with commitments to inject billions more in the coming years, including significant investments in major Indian telecom operators like Jio Platforms and Bharti Airtel.

  • 2022 Fines: Google encountered major regulatory hurdles in 2022, with the CCI imposing a record $162 million fine for abusing its dominant position in the Android smartphone market. Additionally, a subsequent $113 million fine was levied for similar abuses related to the Google Play Store, with directives for Google to permit app developers to employ third-party payment processing services.

The app development community in India has been vocal about their discontent with Google’s policies. Lal Chand Bisu, the co-founder and CEO of Kuku FM, notably criticized Google, labeling it as “the most evil” business partner. Bisu’s statement reflects a growing sentiment among Indian startups about Google’s overwhelming control over the ecosystem, with fears that compliance with Google’s terms could jeopardize their business models and affordability for consumers.

Summary of CCI’s Allegations Against Google
AspectDescription
Excessive Service FeesCharges ranging from 10% to 30%, deemed disproportionate and unfair.
Discriminatory PracticesDistinctions between digital and physical goods/services without basis.
Investigative TimelineCCI orders completion of the probe within 60 days.

The CCI’s investigation into Google’s billing system practices marks a pivotal moment in the ongoing dialogue between Indian app developers and the global tech giant. As allegations of unfair and discriminatory practices surface, the outcome of this investigation could have far-reaching implications for Google’s operations in India and its relationship with the local developer community. With both sides poised for a legal and public relations battle, the tech industry at large watches closely, anticipating the ramifications of this dispute on global app market dynamics and regulatory practices in the digital age.


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Featured Image courtesy of Google Images

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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