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Saturday, December 05, 2020

Google to be probed for alleged abuse of dominance

This is the third major antitrust probe ordered by the Indian competition regulator against Google and the various services it offers in the country.

Written by Aashish Aryan | New Delhi | November 10, 2020 2:15:29 am
Google to be probed for alleged abuse of dominanceActing on an anonymous complaint filed in February this year, the CCI in its 39-page order said prima facie, Google had abused its dominant position in the Indian market to unfairly push Google Pay on two accounts. (File photo)

IN YET ANOTHER setback for Google, the Competition Commission of India (CCI) Monday initiated a Director-General (DG)-level probe into alleged abuse of dominant position by the company to promote its payments app, Google Pay.

It called for investigations to be completed and a report submitted within 60 days.

This is the third major antitrust probe ordered by the Indian competition regulator against Google and the various services it offers in the country.

Acting on an anonymous complaint filed in February this year, the CCI in its 39-page order said prima facie, Google had abused its dominant position in the Indian market to unfairly push Google Pay on two accounts.

The first one was Google’s policy of “mandatory use of Google Play’s payment system for purchasing the apps and IAPs (in-app purchases) in the Play Store”. The second was “excluding other mobile wallets/ UPI (Unified Payments Interface) apps as one of the effective payment options in Google Play’s payment system”.

The probe against Google Pay comes just four days after the National Payments Corporation of India (NPCI) allowed rival Facebook-owned WhatsApp to go live on the UPI in the multi-bank model.

In its order on Monday, the CCI also came down heavily on Google’s policy to charge 30 per cent commission for all app and in-app purchases and said since its Play store cornered about 90 per cent of all downloads, a significant volume of payments being processed in the market would thus be controlled by it.

“If the application developers, in response, raise their subscription fees to offset these costs or remove/ reduce premium/ paid subscription offers for users, it may affect user experience, cost and choice. Such conditions imposed by the app stores limit the ability of the app developers to offer payment processing solutions of their choice to the users,” the CCI noted in its order, asking a detailed investigation to be made.

Google’s plan to charge a 30 per cent commission had come under severe fire from several Indian developers who accused the company of adopting a “take it or leave it” policy.

Following this uproar, Google delayed the implementation of the policy by six months from September 2020 to March 2021. The company has, however, made it clear it intends to charge the commission.

Earlier this year in October, CCI had received reports of Google abusing its dominant position in the Android-television market by creating barriers for companies which wanted to use or modify its Android operating systems for their smart televisions. It is, however, not clear, whether the anti-trust body has initiated a probe into the issue.

Similarly, in June 2019, the CCI had prima facie formed an opinion that Google had abused its dominant position in the domestic smartphone market by reducing the ability of original equipment and mobile phone markers to opt for alternate versions of its Android mobile operating system. It had then asked for a detailed investigation into the issue.

The CCI had in 2018 also launched a probe and fined the global software conglomerate Rs 136 crore for “search bias” and giving “undue” space to its Flights option on its search homepage, over and above other rivals in the market. The CCI order was, however, stayed by the National Company Law Appellate Tribunal, where the case is pending.

India is not the only country where the search-to-software giant is facing an antitrust probe. Apart from facing regulatory scrutiny in the European Union for anti-competitive behaviour, Google has also faced the ire of regulators in the US. A bi-partisan panel of US senators had included it in the list of companies to be broken up into smaller companies.

Following the probe, the United States Department of Justice (DoJ) also sued Google alleging the company had abused its dominant position in a way that had harmed its competitors as well as customers. Eleven states in the US have joined the DoJ in the anti-trust lawsuit against Google “for unlawfully maintaining a monopoly in general search services and search advertising”.

The last time Google faced legal action for allegedly abusing its dominance in the search market was almost a decade ago — in 2011 — when the Federal Trade Commission (FTC) was acting on a complaint filed by a Washington-based non-profit research agency, Electronic Privacy Information Center. Although the five commissioners eventually voted not to pursue a case against Google, the company had to, as a part of a settlement process, implement a strict user data security policy and agree to independent privacy audits for the next 20 years.

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