This is the second CCI order against Google in the past week. The antitrust watchdog had on October 20
imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets with its Android mobile operating system (OS), and prescribed a set of about a dozen key measures that the company has to comply with.
People with direct knowledge of the matter said that CCI is in process of issuing orders against Google in at least two more cases.
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Why CCI has penalised Google again with Rs 936 crore penalty
At the crux of the case is a policy of Google Play store that requires app developers to exclusively use Google Play’s Billing System (GPBS) for all customer billings. This system has to be used not only for receiving payments from the apps but also for in-app purchases made by customers. Any App developer who doesn’t use GPBS is not allowed to list his product on the Google Play store.
“Making access to the Play Store dependent on mandatory usage of GPBS for paid apps and in-app purchases is one-sided and arbitrary and devoid of any legitimate business interest,” the CCI said in a press release on Tuesday.
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“The app developers are left bereft of the inherent choice to use payment processor of their liking from the open market.”
CCI directed Google to “not restrict app developers from using any third party billing/payment processing services”.
Selling of in-app digital goods constitutes an important means for app developers to monetize their creations/innovations. However, for in-app digital goods to be distributed to purchasing users, developers must configure their apps so that all purchases of the digital goods go through Google’s payment system, which processes the transactions.
In a release, the Competition Commission of India (CCI) said it has also directed to modify its conduct within a defined timeline.
In the previous order, the CCI said Google forced app developers to use its in-app payment system, noting selling of in-app digital goods makes up an important means for developers to monetize their work.
The regulator said makers of devices that run on Android shouldn’t be forced to pre-install Google services on their devices. It also asked Google to provide fair access to all stakeholders, among other things.
It had called CCI’s previous decision “a major setback for Indian consumers and businesses”, adding it will review the order and decide next steps.
Google has faced criticism globally for mandating that software developers using its app store must use a proprietary in-app payment system that charges commissions of up to 30% on purchases made within an app. Of late, the company has begun to allow alternative payment systems in more countries.
Google’s Android operating system powers 97% of India’s 600 million smartphones, according to Counterpoint Research.
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