Play Store: CCI imposes Rs 936 crore penalty on Google for anti-competitive practices

The Competition Commission of India (CCI) on Tuesday imposed a penalty of Rs 936.44 crore on Google for “abusing” its dominant position in relation to its Play Store policies. This is the second such penalty on the internet giant in a week.

Based on the above assessment, CCI found Google to be dominant in the markets for licensable OS for smart mobile devices & market for app stores for Android smart mobile OS, in India.

“Google’s Play Store policies require the App developers to exclusively and mandatorily use Google Play's Billing System (GPBS) not only for receiving payments for Apps (and other digital products like audio, video, games) distributed/sold through the Google Play Store but also for certain in-app purchases i.e. purchases made by users of Apps after they have downloaded/ purchased the App from the Play Store. Further, 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 (anti-steering provisions). 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 on the vast pool of potential customers in the form of Android users. 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 processor of their liking from the open market,” the regulator mentioned.

Google’s intent flow methodology more prevalent to the customers

According to CCI, It was found that Google Pay has been integrated with intent flow methodology whereas other UPI apps can be used through collect flow methodology. It was noted that the intent flow technology is superior and user friendly than collect flow technology, with intent flow offering significant advantages to both customers and merchants and the success rate with the intent flow methodology being higher due to lower latency. Google has informed the CCI that it has recently changed its policy and has allowed rival UPI apps to be integrated with the intent flow.

“In relation to the computation of penalty, the CCI noted that there were glaring inconsistencies and wide disclaimers in presenting various revenue data points by Google. However, in the interest of justice and with the intent of ensuring necessary market correction at the earliest, the CCI quantified the provisional monetary penalties based on the data presented by Google.” Said CCI in the Press release. 

Past setbacks

Earlier on Thursday, CCI imposed a fine of Rs 1338 crore on the search giant for anti- competitive practices related to its android operating system, and was asked to change its approach to its android platforms. This came a couple of weeks after CCI ordered investigation in a similar case where News Broadcasters and Digital Associations (NBDA) alleged Google’s parent entities Alphabet Inc, Google LLC, Google India Pvt Ltd, Google Ireland Ltd, and Google Asia Pacific Pte Ltd. for dictating terms and conditions that favoured itself, not justifiable for content writers associated with news organizations.