CCI orders probe into Google for unfair business practice via Google Pay

New Delhi: India's statutory monopoly monitoring authority, the Competition Commission of India (CCI) on Monday ordered a detailed probe into alleged unfair business practices by internet giant Google with respect to Google Pay as well as Google Play''s payment system.

Google Pay is a popular digital payments platform while Google Play is the app store on its Android operating system.

"... the Commission is of the prima facie view that the Opposite Parties have contravened various provisions of Section 4 of the Act... These aspects warrant a detailed investigation," CCI said in a 39-page order.

CCI's Director General (DG), which is the investigation arm, will conduct the probe as per the order.

Section 4 of the Competition Act pertains to abuse of dominant market position.

The Commission sees that the market for apps facilitating payment through the Unified Payments Interface (UPI) appears to be a distinct relevant market for the assessment of allegations in the present matter, the order says to effect.

According to the regulator, it is of "the prima facie view that said conduct of Google amounts to imposition of unfair and discriminatory condition, denial of market access for competing apps of Google Pay and leveraging on the part of Google, in terms of different provisions of Section 4(2) of the Act."

Indian app developers have been voicing concerns over Google''s move to charge 30 per cent commission on paid apps and In-App Purchases (IAPs). Many such developers have said that Google cannot force domestic app developers/ owners to sell digital services by compulsory use of its billing system.

However, a Google spokesperson said in a late evening statement, "We are pleased that the CCI has rejected several claims made by the anonymous complainant".

On the remaining concerns, the spokesperson said it was 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", he continued.

"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," the spokesperson added.

On its part CCI explains that mandatory use of the application store's payment system for paid apps and in-app purchases (IAP) restricts the users' choice to the Google Pay channel, because of Google's charging of a commission of 30 percent (15 percent in certain cases) for all app purchases and IAPs through other payment options.

"The resultant market power being enjoyed by Google due to its grip over Android ecosystem apparently resulted in ''allegedly'' high commission fee of 30 per cent." it added. Thus the watchdog deems the high fee as a deterrent for users choosing Google's competitors thereby stifling competition.

The probe has been ordered against five entities -- Alphabet Inc, Google LLC, Google Ireland Ltd, Google India Pvt Ltd and Google India Digital Services Pvt Ltd.

In 2018, CCI had penalised Google for anti-competitive practices in the Indian market for online search.

(With input from PTI)