New Delhi: India’s competition watchdog, the Competition Commission of India (CCI), has launched an investigation into Google’s in-app payment service fees following complaints from various companies, including the Match Group and several Indian startups. The companies have alleged that the fees charged by Google for in-app payments violate a previous antitrust directive and are anti-competitive. In response, the CCI issued a non-public order last week, calling for an inquiry into the matter.
Last year, the CCI imposed a $113 million penalty on Google, ordering the company to allow third-party billing and cease the practice of forcing developers to use its in-app payment system, which charges commissions ranging from 15 percent to 30 percent. Google responded by introducing the User Choice Billing (UCB) system, which allows users to choose different payment methods side by side Google’s for purchasing in-app digital content. However, some companies have complained that the new system still imposes a significant “service fee” which ranging from 11 percent to 26 percent.
The Alliance of Digital India Foundation and the Match Group claim that Google’s action of continuing to impose a “service fee” ranging from 11 percent to 26 percent via its UCB system violates the prior antitrust directive, which mandated that Google avoid enforcing any “unfair and disproportionate” terms and conditions. The CCI has asked Google to provide information on the provisions associated with its in-app payment system before and after the introduction of the UCB system, as well as the policies governing the sharing of user and app developer data. Four weeks has been given to Google to respond to the order.
Google has argued that the in-app payment service fee is necessary to support investments in the Google Play app store and the Android mobile operating system, allowing them to be distributed for free while also covering expenses related to developer tools and analytics services. India is a crucial growth market for Google, but the company faces additional regulatory hurdles, such as a recent setback that forced it to change how it promotes its Android system. The investigation into Google’s in-app payment service fees marks another challenge for the tech giant in India, where it has come under scrutiny from the CCI and other regulatory bodies.
It remains to be seen how this latest development will affect Google’s operations in India and its relationship with local companies and users. However, it is clear that Google will need to navigate regulatory challenges carefully as it seeks to grow its presence in India and other emerging markets. In the meantime, the investigation into Google’s in-app payment service fees highlights the importance of ensuring fair competition in the tech industry, which is critical for fostering innovation and promoting consumer choice.