CCI orders investigation into Google’s alleged anti-competitive practices

CCI orders investigation into Google’s alleged anti-competitive practices
Photo Credit: Reuters
10 Nov, 2020

The Competition Commission of India (CCI) on Monday ordered an investigation into alleged antitrust practices by Google. The probe will look into pre-installation of UPI-based payments app Google Pay on devices as well as preference given to the platform for in-app purchases on Google Play.

The investigation, ordered on the basis of a complaint filed by an unnamed informant, makes US-registered Alphabet, the holding company of Google, a party to the proceedings along with Google LLC US, Google Ireland and Indian entities Google India and Google Digital Services. 

In its order, CCI has taken cognizance of the 30% service fee imposed by Google Play for all app purchases and in-app purchases and Google Play store’s directions to existing apps to switch to the Google Play billing system by September 2021. 

“..the Commission is of prima facie view that mandatory use of application store’s payment system for paid apps & in-app purchases restricts the choice available to the app developers to select a payment processing system of their choice especially considering when Google charges a commission of 30% (15% in certain cases) for all app purchases and IAPs (in-app purchases),” the CCI in the investigation order said. 

The order added that since Google Play dominates app downloads on Android OS, “it appears that Google controls the significant volume of payments processed in this market.”

The competition watchdog also said that better experience for app-purchases via Google Pay is unfair and discriminatory. 

According to CCI, the pre-installed Google Pay app on smartphones through a partnership with OEMs made it look like the option as default for users. CCI mentioned the dominant position of Google Pay in terms of processing UPI transactions and said that “Google using its market position in applications relating to licensable mobile OS, search engine, app store, browser, etc. to enter into contractual arrangements with OEMs for pre installation of GPay, may disturb the level playing field.”

This comes within weeks of digital wallet player Paytm alleging that Google was abusing its dominance in the Android ecosystem. Paytm launched a web-app store on its interface after Paytm First Games and the Paytm wallet app were taken down from Google Play Store temporarily in September. 

According to reports, a consortium of startups founders and CEOs had approached CCI to discuss their concerns on the market dominance of Google in India in October.