In-app purchase controversy: CCI to hear charges against Google this week

The Competition Commission of India’s (CCI’s) probe into Google’ payment policy may soon be over because the antitrust regulator is set to begin a confidential hearing this week on charges against its contentious policy for Play Store developers.

The three-member CCI panel, headed by Chairman Ashok Kumar Gupta, is likely to hear the matter daily later this week and is expected to pass the final order by September.

The move is relevant because it will provide greater legal certainty to Google’s proposed payment policy, which will come into effect on October 31.

App developers have been mandated to integrate their payment systems with the Play Store billing system within the deadline.

“The proceedings are starting this month and are to be heard at a stretch,” a person privy to the development told Business Standard.

He added the commission was expected to conclude the matter in seven to 10 days.

The order could levy a penalty on the tech giant if the CCI holds its policy to be in violation of competitive conduct.

“The panel will examine the relevant findings of the case, which alleged that Google favoured its own app -- Google Pay -- over its competitors, which is unfair and discriminatory. Besides, it will review whether the proposed payments policy is in compliance with competition laws,” another person said. 

During the proceedings, the panel will hear the company’s comments on the report of the CCI director general (DG) office, which red flagged “unfair and discriminatory practices” by the search engine.

Google’s counsel and executives will be given an equal chance to present their case and reply on the allegations, the person said.

The DG office, which handles competition investigation, had submitted its initial report to the CCI in March, alleging that the key criteria under its payment policy were not for its own app but app developers.

In an email response, the Google spokesperson said: “We recently introduced a pilot to allow a small number of participating developers to offer an additional billing option next to Google Play’s billing system, starting with Spotify. We will continue to engage with the CCI and demonstrate that our practices benefit Indian consumers and developers.”

“The Google Play billing system provides a simple, safe way for consumers to transact. We charge a service fee for the extensive services we offer on Google Play: Less than 3 per cent of our developers globally pay a service fee, 99 per cent of whom qualify to pay 15 per cent or less,” the spokesperson added.

The CCI started investigating the matter following complaints in 2020 and 2021, alleging the digital giant abused its dominant position to push its in-app payments system. 

The controversy started when Google made it mandatory for app developers to use its billing system. However, after facing an outrage from app developers, it deferred the implementation to March 2022 and now to October.

Story so far

• Google announces new payment policy for in-app purchases in September 2020
• CCI launches probe following complaints against the payment policy 
• Firms defer implementation in India to March 2022, and now Oct 31
• DG submits probe findings alleging discriminatory practices