India’s antitrust watchdog has hit Google with a $113 million fine for abusing the dominant position of its Google Play Store and ordered the firm to allow app developers to use third-party payments processing services for in-app purchases or for purchasing apps, the second such penalty on the Android-maker in just as many weeks in its largest market by users.
The Competition Commission of India, which opened the probe into Google in late 2020, said mandating developers to use Google’s own billing system for paid apps and in-app purchases through Play Store “constitutes an imposition of unfair condition” and thus violates provisions of the nation’s Section 4(2)(a)(i) of the Act.
The regulator — which 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 apps such as YouTube amounts to “imposition of discriminatory conditions.”
Different methodologies used by Google to integrate, its own UPI app vis-à-vis other rival UPI apps, with the Play Store results in violation of Sections 4(2)(a)(ii), 4(2)(c) and 4(2)(e) of the Act.
India is Google’s largest market by users. The company has poured billions of dollars in the South Asian market over the past decade as it aggressively searched to find major untapped regions worldwide to supercharge its growth.
The company reaches nearly all of India’s 600 million internet users. Android commands 97% of the local smartphone market. Its payments app, Google Pay, is the second largest payments on the UPI network, an infrastructure built by a coalition of banks that has become the most popular way Indians transact online.
Directive to allow third-party payments
The antitrust watchdog has directed Google to introduce a series of changes to its Play Store policies, which as with allowing developers to use third-party billing system, requires compliance within three months.
“The Commission hereby directs Google to cease and desist from indulging in anti-competitive practices,” CCI said in a statement.
Last week, the competition regulator fined Google $161.9 million for anti-competitive practices related to Android mobile devices and made a series of stringent redressal measures.
The watchdog was investigating whether Google had assumed dominant position in five different markets: licensable OS 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 said that device manufacturers should not be forced to install Google’s bouquet of apps and the search giant should not deny access to its Play Services APIs and monetary and other incentives to vendors. Amazon told the regulator that over half a dozen hardware vendors had indicated that they could not enter into a TV manufacturing relationship with the e-commerce group over fear of retaliation from Google.
Google said Tuesday its legal team is evaluating the order and had no immediate comment. It expressed concerns about the evidence the regulator relied on to reach its conclusion, CCI said in the order.
In a statement Wednesday, a Google spokesperson said: “Indian developers have benefited from the technology, security, consumer protections, and unrivaled choice and flexibility that Android and Google Play provide. And, by keeping costs low, our model has powered India’s digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate the next steps.”
