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Saturday, November 28, 2020

Google Pay probe over dominance: What Competition Commission is investigating

The Competition Commission of India (CCI) has announced a detailed investigation into Google's dominance around its app store, the billing commission of 30 per cent for apps, and payments system with the promotion of its UPI-based Google Pay app

By: Tech Desk | New Delhi | Updated: November 10, 2020 2:36:31 pm
Google Pay, Google Pay CCI probe, Google Pay CCI dominance, Google Pay misuse, Google Pay investigation, Google Pay IndiaGoogle Pay is facing an investigation in India by the Competition Commission of India. (Image source: Indian Express)

The Competition Commission of India (CCI) announced a detailed investigation into Google’s dominance with focus on the Google Pay app as well the company’s plan to charge 30 percent billing commission from app developers. It will also look into where Google is abusing its position with the dominance of the Play Store.

CCI will be looking at whether Google violated section 4 of the Competition Act, which relates to misuse of dominant position by an entity. The investigation is being launched based on an anonymous complaint. CCI has said it will start and complete the investigation in the next 60 days from the date of its order, which was issued on November 9, 2020.

According to the CCI order, the commission will look at whether Google “unfairly privileged” Google Pay, its UPI-based payments app.

Reacting to the order, a Google spokesperson said in a statement, “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.”

Read more: India open to launching own app store as start-ups criticise Google

Here is what the commission will be looking into when it launches investigation into Google’s dominance.

Restricting payments on Google Play to its own in-house billing system

The complaint has alleged that Google has abused its dominance by levying the 30 percent commission from app developers and by limiting the payment system for paid apps and in-app purchases to its own in-house billing system.

The Commission said that “prima facie” it appeared that the mandatory use of the Play Store payment system was restricting choice for app developers. It said that “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 for app purchases as well as in-app purchases.”

Further the probe will also examine whether Google could access data collected from users of its competitors and use it to its own advantage with such payment system conditions.

Dominance of Google Pay

The Commission rejected the claims that Google was rigging rankings of the Play Store to display its Google Pay app on top. But it will be looking into charges of the company pushing the Google Pay system to the disadvantage of other UPI-based payment options when it comes to payments on the Play platform. It is alleged in the complaint that the Google Pay system is integrated better, which gives it a distinct advantage.

The Commission noted in its order, “prima facie it appears that user experience while using Google Pay would be different / better as compared to using other UPI based apps. This difference has the potential to shift users towards adopting Google Pay over other UPI based payment apps.”

Pre-installing Google Pay on some smartphones

The complaint also raises concerns over Google Pay being pre-installed on some smartphones which they note gives it a distinct advantage over other players. It will also look at whether Google violated section 4 by pre-installing the Google Pay on some smartphones at the time of set-up, “resulting in a ‘status-quo bias’ to the detriment of other UPI-apps.”

The Commission however, rejected the charge that Google was displaying the Pay app more prominently over others and said the complaint did not have enough evidence to merit an investigation regarding this claim.

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