Google has paused its payment policy in India; here's why

Google has halted the implementation of its policy that required app developers to utilise its Google Play billing system for in-app purchases in response to a ruling by the Competition Commission of India (CCI). The business declared that it is examining its "legal options" in order to "continue to invest in Android and Play." The IT company's policy had deadline of October 31 earlier.

"Following the CCI's recent ruling, we are pausing this enforcement of the requirement for developers to use Google Play's billing system for the purchase of digital goods and services for transactions by users in India while we review our legal options and ensure we can continue to invest in Android and Play," Google said in a support page on its blog on Tuesday.

In two separate incidents last month, the CCI issued Google two distinct directives and sanctions. One of them involved the corporation paying a fine of Rs. 936.44 crores for violating the Play Store standards while abusing its dominating market position. The watchdog issued a cease-and-desist order and instructed the tech company to change its behaviour within a predetermined time frame, including enabling third-party payment options for mobile app developers on its app store, Indian Express reported.

According to CCI, Play Store standards mandate that app developers utilise Google Play's billing system (GPBS) alone and exclusively for certain in-app purchases as well as for payments for apps and other digital goods. Additionally, app developers are not permitted to utilise wording that entices users to buy a digital good outside of the app or include a direct link within an app to a website that accepts an alternate payment method.

The large pool of prospective clients represented by Android users will be lost if the app developers do not abide by GPBS, which prevents them from listing their apps on Play Store. "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 processors of their liking from the open market," the CCI had said.

Prior to that, the antitrust regulator fined Google Rs 1,338 crore for abusing its dominant position in a number of segments of the domestic Android mobile device ecosystem.

Google's inability to implement its payment policy in India

When Google announced in 2020 that it will implement its in-app payment system in India by September 2021, the sector reacted strongly, accusing Google of abusing its position of dominance. Famous Indian internet entrepreneurs like Murugavel Janakiraman of BharatMatrimony and Vijay Shekhar Sharma of Paytm voiced their concerns to the IT Ministry about this, and as a result, Google was forced to postpone the policy's implementation in India twice, first to March 2022 and then to October 2022.

In September, Google announced that, as part of a pilot project, it would permit non-gaming Android app developers from a number of nations, including India, to provide third-party payment options. This announcement came as antitrust scrutiny of Google and Apple's app store payment policies was growing. Developers will notice a 4 per cent reduction in their service cost, which typically ranges from 15% to 30%, on these alternative payment channels.