CCI to probe Google’s ‘abuse’ of position

Issue concerns payments app GPay

November 09, 2020 10:18 pm | Updated 10:52 pm IST - NEW DELHI

FILE - In this Monday, Nov. 5, 2018 file photo, a woman walks past the logo for Google at the China International Import Expo in Shanghai. By U.S. standards, the Justice Department's move to sue Google this week for abusing its dominance in online search and advertising was a bold move. But it treads on ground already broken years before by EU officials in Brussels. (AP Photo/Ng Han Guan, File)

FILE - In this Monday, Nov. 5, 2018 file photo, a woman walks past the logo for Google at the China International Import Expo in Shanghai. By U.S. standards, the Justice Department's move to sue Google this week for abusing its dominance in online search and advertising was a bold move. But it treads on ground already broken years before by EU officials in Brussels. (AP Photo/Ng Han Guan, File)

The Competition Commission of India (CCI) ordered a detailed probe against Google for ‘abuse’ of its dominant position, primarily with regard to its digital payments application GPay.

The order follows a complaint by an ‘informant’ alleging multiple instances of abuse of dominant position by Google, with CCI deciding to carry forward the investigation into two of these instances — pre-installation of GPay on Android OS smartphones and use of Google Play’s in-app billing as the method of payment by developers.

“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,” the order said. Section 4 of the Competition Act pertains to abuse of dominant market position.

The Commission has directed the Director General to finish the probe and submit the report in 60 days.

This comes at a time when Paytm, along with several other Indian start-ups, have been rallying against the U.S.-based tech giant’s requirement that apps use the Play Store’s billing system for in-app purchases of digital goods and pay a 30% transaction fee.

On mandatory use of Play’s payment system, the Commission in its 39-page order said it is of prima facie view that mandatory use of application store’s payment system for paid apps and in-app purchases restricts the choice available to the app developers, especially considering when Google charges a commission of 30% (15% in certain cases) for all app purchases. It added that such ‘allegedly’ high fee would increase the cost of Google’s competitors.

Further, it added, “the Commission 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.”

Similarly, on the issue of pre-installation and prominence of Google Pay on Android Smartphones, the Commission agreed with the contention of the informant and said that it was prima facie of the view that the alleged conduct on the part of Google merit detailed investigation.

However, it added that “nothing stated in this order shall tantamount to a final expression of opinion on the merits of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein”.

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