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CCI slaps Rs 936-cr penalty on Google for abusing its dominant market position

Last week, the antitrust regulator had imposed a penalty of Rs 1,338 crore on Google for abusing its dominant position in multiple categories related to Android mobile device ecosystem in the country.

GoogleThe CCI said Google leveraged its dominant position to protect the position of apps like Chrome and YouTube. (Image Source: Reuters)

The Competition Commission of India (CCI) on Tuesday imposed a penalty of Rs 936.44 crore on Google for abusing its dominant market position with respect to its Play Store policies. It also 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.

“Google has been given 30 days to provide the requisite financial details and supporting documents,” the CCI order said.

Last week, the antitrust regulator had imposed a penalty of Rs 1,338 crore on Google for abusing its dominant position in multiple categories related to Android mobile device ecosystem in the country.

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.

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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 processor of their liking from the open market,” the CCI said.

Interestingly, Google is not applying the same policy on its own apps like YouTube. This amounts to imposition of discriminatory conditions as well as pricing as YouTube is not paying the service fee as being imposed on other apps covered in the GPBS requirements, the antitrust regulator said.

The CCI launched an investigation into Google’s Play Store policies in 2020 upon complaints by domestic app developers.

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It also examined the allegations of exclusion of rival UPI payment apps such as PhonePe, Paytm and BharatPe as alternative payment options on Play Store. The Commission found that Google’s own UPI payment service ‘Google Pay’ has by default been integrated with the “intent flow” payment methodology whereas other UPI apps can only process transitions through the “collect flow” methodology.

The intent flow payment methodology is widely considered superior and user-friendly in comparison to collect flow technology, with intent flow offering significant advantages to both customers and merchants. The success rate with the intent flow methodology was also found to be higher due to lower latency, according to the order.

Google, however, informed CCI that it recently changed its policy and allowed rival UPI apps to be integrated with the superior intent flow methodology. FE

First published on: 25-10-2022 at 17:35 IST
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