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Journalism of Courage
After a ruling by the Competition Commission of India (CCI), Google has paused the enforcement of its policy that mandated app developers to use its Google Play billing system for in-app purchases. The company said it is reviewing its “legal options” and ensuring it can “continue to invest in Android and Play”. The earlier deadline to adhere with the tech giant’s policy was October 31.
“Following the CCI’s recent ruling, we are pausing this enforcement of the requirement for developers to use Google Play’s billing system for the purchase of digital goods and services for transactions by users in India while we review our legal options and ensure we can continue to invest in Android and Play,” Google said in a support page on its blog on Tuesday.
The CCI order
The CCI passed two different orders and penalties on Google in two separate cases last month. One of these was a penalty of Rs 936.44 crore on the company for abusing its dominant market position with respect to its Play Store policies. The watchdog issued a cease-and-desist order and directed the tech firm to modify its conduct within a defined timeline, which includes allowing mobile app developers to use third-party payment services on its app store.
According to CCI, Play Store policies require app developers to exclusively and mandatorily use Google Play’s billing system (GPBS) not only for receiving payments for apps and other digital products but also for certain in-app purchases. Further, app developers cannot, within an app, provide users with a direct link to a webpage containing an alternative payment method or use language that encourages a user to purchase the digital item outside of the app.
If the app developers do not comply with GPBS, they are not permitted to list their apps on Play Store and stand to lose out on the vast pool of potential customers in the form of Android users. “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 app developers are left bereft of the inherent choice to use payment processors of their liking from the open market,” the CCI had said.
Before that, the antitrust regulator had imposed a penalty of Rs 1,338 crore on Google for abusing its dominant position in multiple categories related to the Android mobile device ecosystem in the country.
Google’s inability to implement its payment policy in India
In 2020, Google had said it would enforce its in-app payment method in India by September 2021, which led to significant backlash from the industry, which said Google was abusing its dominance. Prominent Indian internet entrepreneurs including the likes of Paytm’s Vijay Shekhar Sharma and BharatMatrimony’s Murugavel Janakiraman raised concerns about this with the IT Ministry and, as a result of the pressure, Google had to defer the implementation of the policy in India twice — once to March 2022 and then to October 2022.
As antitrust scrutiny was rising on Google and Apple’s app store payment policies, in September, Google said it will allow developers of non-gaming Android apps from several countries, including India, to offer third-party payment options under a pilot project. On these alternate payment systems, developers will see their service fee of 15-30 per cent reduced by 4 per cent.
