India’s antitrust watchdog has started an investigation into Google for reportedly misusing the dominant position of its app store for promotion of its payments service in the world’s second-biggest internet market.
Recommendation:
Announcement By Competition Commission of India (CCI)
It would review claims of whether the Android maker prominently promotes Google Pay during the setup of an Android smartphone (and whether phone vendors have a choice to avoid this); and if Play Store’s billing system is designed “to the disadvantage of both i.e. apps facilitating payment through UPI, as well as users.
The informant who has not been recognized alleged that in addition to the Google Pay app, in-app purchases for applications downloaded via Play Store are also directed to support Google Pay service “if they want to be listed on the Play Store” and they are required to pay a “high commission” for that. Along with this the informant also alleged that Google immorally skews the search results on the Play Store in regard to Google Pay app over others- CCI, therefore, is not going to investigate this claim stating there is not enough evidence to support this claim. Google put together its feature app lists like ‘User Choice Apps’, ‘Top Free apps’, and ‘Editor’s Choice Apps’ showing bias in regard to its own app, by manipulating search ads algorithm on the Play Store in favor of Google Pay.
The informant pointed out similarities between the conducts of Apple in Europe and Google in India i.e. like Apple (as set out in the Press Release of EC), as a mandatory requirement for listing on the Play Store, Google requires the app developers to exclusively use Google Play Store’s payment system and Google Play In-App Billing for charging users who purchase apps on the Play Store or buy goods/services from inside an app (i.e. IAP), and further like Apple, Google charges app developers a 30% commission for allowing them to use the Play Store’s payment system and Google Play In-App Billing.
Google responded to CCI stating that Android “is not dominant in India and it goes through huge competition from feature phones OSs (operating systems) as feature phones that are sold in India today boasts the performance and functions that the Informant attributes to smartphones. Moreover, the Indian watchdog revealed that Android is claimed to be going through huge competition from non-licensable and licensable OSs.
According To Research Firm Counterpoint
Android powers 99% of all smartphones in India. Google also disputed other allegations. For instance, it said, “Google’s 30% (and in certain circumstances, 15%) service fee is not arbitrary. It is market based, legitimate, and pro-competitive as the service fee allows Google to cover third party fees and support its significant and continued investments in Play, including the vast resources it develops for developers.
If the allegations made by the informant are claimed credible then Google’s practices might be in violation of several provisions of Section 4 of India’s Competition Act of 2002. Google Pay before knows as Tez, is one of the biggest payment services in India. Google Play Store has various payment options, including mobile wallets, credit cards, internet banking, and UPI. The UPI digital payments are more secured, easy, and economical over any other digital payment solutions. On the basis of this Indian Watchdog stated-
The Informant has averred that the market for apps facilitating payment through UPI is a separate relevant market as users do not regard apps facilitating payment through UPI as interchangeable or substitutable with other modes of digital payment.
For clarity, CCI is investigating the complaint filed in February this year and is not linked with any recent incidents.
Statement By Google Spokesperson
We are pleased that the CCI has rejected several claims made by the anonymous complainant. On the remaining concerns, first, we are confident that the CCI will find that GPay operates in an extremely competitive environment, and owes its success to its ability to offer consumers a simple and secure payments experience.
Secondly, numerous distribution channels exist for apps on the Android platform; Play is not the only app distribution option for Android. Users choose Google Play because we ensure a safe, secure, and seamless experience. Play’s billing system is a fundamental part of meeting this user expectation and helps ensure our continued investment in the many important things needed to make developers successful.
Google is going through two more antitrust investigations in India over reportedly misusing the power of dominance of Android in the smart TV market and the dominating role of Android in the mobile market.
While the incoming Biden administration is considering installing the former Google CEO on their team, the rest of the world continues to investigate the antitrust abuses of his company ??? https://t.co/BWjpTCmp03
— DHH (@dhh) November 9, 2020
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