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Industry body ADIF moves CCI against Google’s upcoming PlayStore policy for in-app purchases

Industry body Alliance of Digital India Foundation (ADIF) has moved the Competition Commission of India (CCI) seeking interim relief against Google's upcoming PlayStore policy changes

By: Tech Desk | New Delhi |
Updated: October 11, 2021 2:28:22 pm
Google, play store, Apple, Spotify,Google halves Play Store fees for subscription apps (Image source: AP)

Industry body Alliance of Digital India Foundation (ADIF) has moved the Competition Commission of India (CCI) seeking interim relief against Google’s upcoming PlayStore policy changes. In October 2020, Google had said it was delaying its new policy that would force app developers to only use the Google Billing System (GBS).

The policy comes into effect from March 2022 and it will mean that app developers will be dependent on Google’s systems. It would also mean that the 30 per cent commission will apply for all transactions on the Google Play Store.

In a statement, ADIF said they have filed a petition before CCI through their lawyers at Sarvada Legal and sought interim relief. The matter is already being looked into by the CCI for potential abuse of dominance by Google in the app market. Previously, a similar petition has been filed against Apple, alleging anti-trust violations over the issue of in-app payments and purchases. The Apple petition was filed by another group called “Together We Fight Society”

According to ADIF, Google’s policy will see developers paying 30 per cent fee to the search giant, compared to 2 per cent charged by other payment processing systems. The group says the new policy will have a “destructive effect on the operating margins of a large number of startups and make their business models infeasible.”

“ADIF foresees that barring an order passed by this Hon’ble Commission to maintain status-quo until the completion of the ongoing inquiry, Google shall proceed to enforce its terms on the Play Store, thereby leading to adverse and irreversible consequences on India’s fledgling startup ecosystem,” Sijo Kuruvilla George, Executive Director, Alliance of Digital India Foundation said in a press statement.

ADIF, in its petition, has said that the policy will have “a disastrous effect on India’s digital ecosystem by reducing choices available in the hands of app developers and users as well as harming the country’s innovation ecosystem by disrupting the cost structures and margins of multiple industries.”

The core issue for startups and app developers is the mandatory imposition of the Google Play Billing system and the exclusion of other methods of payment.

“The matter is not as much about the percentage of commission charged as it is about the anti-competitive practice of forcing a payment option as well as of forcing out other payment providers. If not kept in check, such anti-competitive policies and gatekeeper commissions will be imposed on more and more categories, causing a disastrous effect on competition and prices in India,” Murugavel Janakiraman, founder and CEO of Matrimony.com, said in a statement.

CCI had already started a probe into Google’s payment systems for paid apps and in-app purchases in November 2020. The commission is of the prima facie view that such a policy is unfair as it restricts the ability of app developers to select a payment processing system of their choice.

We have reached out to Google for a statement on the same and will update when made available.

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