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The Competition Commission of India (CCI) on Friday ordered a probe into Google’s Play Store billing policy for imposing an “unfair service fee” on app developers, amid concerns raised by some Indian companies.
The regulatory body directs the Director General of CCI to conduct an investigation and submit a report on it within 60 days.
“In view of the foregoing, the Commission is of the prima facie view that Google has imposed unfair price in violation of Section 4(2)(a)(ii) of the Act which warrants a detailed investigation,” CCI said.
In its 21-page order, the CCI observed that such imposition by Google resulted in app developers having fewer resources to enhance or develop their app offerings, thereby constraining the growth of the app market.
"We are examining CCI's order initiating the investigation. The CCI has previously examined our service fee in detail between 2020 and 2022 and found no illegality. However, we take our commitment to comply with local laws and regulations in India seriously and will cooperate with the process in every way," said a Google spokesperson.
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The order came after a few startups told the CCI that the tech giant was not adhering to its earlier ruling of allowing third-party billing services for in-app purchases.
“Google's imposition of unfair service fee on app developers could force them out of the market or deter them from entering due to increased operational costs, thus denying market access to these developers. This behaviour also curtails the freedom of app developers to select their business model and user engagement methods,” said CCI in its order.
Earlier this month, the tech giant removed the apps of some Indian developers from its Play Store for alleged non-compliance with its user choice billing (UCB) system. The companies, however, argued that under the new policy, even if the user pays through an alternative payment system, the transaction will still be subjected to a service fee of 11-26 per cent, marking a reduction of reduction 4 per cent.
They described it as ‘unfair’.
Shaadi.com, Bharat Matrimony, Balaji Telefilms’ Altt and Info Edge group's Naukri.com and 99acres.com were among the apps that were ‘temporarily’ taken down by Google from its Play Store for non-compliance, drawing criticism from the Indian startup community.
In February this year, the Supreme Court agreed to hear pleas filed by Indian startups challenging the tech giant’s billing policy. The court, however, refused to pass an interim order protecting these startups from being removed from Google's Play Store, following which the apps were taken down.
Story so far
Story so far
Google had tweaked its billing system to comply with CCI’s order in 2022
The company introduced user choice billing, but even then developers had to pay service fee for in-app transactions
Startups called the changes ‘unfair’ and approached the courts
The Supreme Court refused to pass an interim order against the removal of apps
Google pulled down the apps, which were temporarily reinstated, after government intervention
