Google India has unfairly blocked rival payments in the App Store

Google’s billing system for app developers is “unfair and discriminatory,” the preliminary results of a comprehensive investigation by India’s antitrust regulator said, paving the way for possible future penalties.

According to documents seen by Bloomberg News, the Competition Commission of India (CCI) has discriminated against Google in its Play Store billing policy. The findings come after a month-long investigation by developers who complained that the US Internet giant was charging unfairly high fees for using the Android App Store and its proprietary payment services.

Alphabet, Google’s parents, and Apple have come under pressure from regulators around the world to accuse the developers of the twin mobile giants of forcing them to use their payment systems, then cut off revenue. In South Korea, Google was forced to provide an alternative billing system following regulatory action. In that market, Google says it has reduced app developer fees by 4 percent.

“Google is violating the rules and imposing unfair and discriminatory conditions,” the Indian agency said in its preliminary report on March 14.

“Google’s behavior has led to denial of access to the competitive UPI app market as the market for UPI-enabled digital payment apps is multifaceted, and network effects will lead to a situation where Google Pay competitors will be completely excluded from the market. Long-term, ”he said, referring to the Unified Payment Interface or state-supported payment infrastructure.

The response has been sharp in India, suggesting how Google’s problems could slow future growth. More than 200 startup founders have teamed up for open negotiations with the government to impose a 30 percent fee on smartphone app purchases – its standard tariffs around the world. Although Google delayed implementing the rule after a shout-out in late 2021, the country’s technology industry remains determined to limit Colossus.

Representatives of non-profit organizations did not immediately respond to a request for comment. “We will engage with CCI and demonstrate that our practices benefit Indian consumers and developers, without limiting competition in any way,” Google said in a statement.

The response in India echoes the global opposition to the fee structure imposed by Google and Apple on their online app stores. Fortnite-maker Epic Games has filed a lawsuit against two companies in the United States over how they made such allegations.

Indian authorities have shown a willingness to go after larger corporations and take stronger action – when they see a clear, national interest. Companies like Apple have been banned for years from opening their own retail stores to protect local operators, while TickTock and hundreds of other Chinese apps have been banned for security reasons.

Last month, Alphabet said it would begin billing some app users directly as a payment option through Google, a discount intended to alleviate mounting antitrust concerns. The new system, which Google is developing as a test, starts with streaming giant Spotify.

Google typically charges 30 percent commission on most App Store purchases and subscriptions, but in recent years has reduced fees for media providers such as Spotify by 15 percent. Spotify is one of several companies that has complained about the inability of mobile app stores to use their own billing systems.

© 2022 Bloomberg LP

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