The Competition Commission of India (CCI) on Tuesday imposed a penalty of ₹936.44 crore on Google for “abusing its dominant position with respect to its Play Store policies”, in the second such penalty on the internet giant within a week. The CCI has also issued a cease-and-desist order and directed Google to modify its conduct within three months.
The antitrust regulator had on October 20 slapped a fine of ₹1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.
The regulator noted that Play Store is by far the largest app marketplace connecting app developers with users on Android ecosystem and Google’s control over Play Store, the critical gateway between app developers and users, gives it the power to dictate terms to app developers, and compel them to mandatorily use its own payment system.
‘Discriminatory practices’
“Making access to the Play Store dependent on mandatory usage of GPBS [Google Play Billing System] 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 processor of their liking from the open market,” the regulator noted in its order, adding that during the investigation it found that Google is following discriminatory practices by not using GPBS for its own applications i.e., YouTube.
As per existing policies, Google requires application developers to exclusively and mandatorily use GPBS not only for receiving payments for apps distributed through the Google Play Store but also for certain purchases made by users of apps after they have downloaded the app. Additionally, app developers cannot, within an app, provide users with a direct link to a webpage containing an alternative payment method or use language that encourages a user to purchase the digital item outside of the app.
The CCI noted that if the app developers do not comply with Google’s policy of using GPBS, they are not permitted to list their apps on the Play Store and thus, would lose out the vast pool of potential customers in the form of Android users.
Third-party billing services
The CCI has directed Google to allow app developers from using any third-party billing services and also set out a clear and transparent policy on data that is collected on its platform, use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities.
Pointing out that there were “glaring inconsistencies” and wide disclaimers in presenting various revenue data points by Google, CCI, however, has in the interest of justice quantified the provisional monetary penalties on the basis of the data presented by Google. “Accordingly, the CCI imposed a penalty @ 7% of its average relevant turnover amounting to ₹936.44 crore upon Google on provisional basis, for violating Section 4 of the Act. Google has been given a time of 30 days to provide the requisite financial details and supporting documents,” it said.
