Play Store Policies: CCI Lands Second Blow, Google Fined Rs 936 Crore

The Competition Commission of India (CCI) on Tuesday slapped a penalty of Rs 936.44 crore — the second in a span of seven days — on search engine giant Google for “abusing its dominant position with respect to its Play Store policies”.

The regulator has issued a cease-and-desist order, suggesting eight corrective measures including providing access to third-party billing payment processing systems on its Play Store.

The CCI has given 30 days to implement the corrective measures and modify its conduct.

This comes after the CCI imposed a Rs 1,337-crore penalty on Google last week, citing a similar abuse of its dominant position “in multiple markets of the Android ecosystem”.

Regulatory sources said the CCI might soon issue some more orders against the search engine giant in different cases.

Notably, two cases are going on: One related to the smart TV segment and other to news referral services.

The policy in question in Tuesday’s order requires app developers to exclusively use Google Play Billing System (GPBS) for all customer billings.

App developers that do not use GPBS are not allowed to list their products on Google Play Store.

“Making access to the Play Store, for app developers, dependent on mandatory usage of GPBS for paid apps and in-app purchases constitutes an imposition of unfair conditions on app developers. Thus, violating the provisions of the Act,” the CCI said in the order on Tuesday.

Further, it said Google restricted choice for app providers and users by only allowing its payment offer on its app store platform.

This results in denying market access to competing mobile wallets and apps facilitating payment through the United Payments Interface (UPI).

The CCI noted Google forced app developers to use in-app payment systems because selling in-app digital goods made an important means for these developers to monetise their work.

The CCI further highlighted that Google was found to be following discriminatory practices by not using GPBS for its own applications such as YouTube.

Of eight corrective measures, it directed Google to not impose any condition (including price-related condition) on app developers, which is “unfair, unreasonable, discriminatory or disproportionate” to the services provided to app developers.

Besides, Google will ensure transparency in communicating to app developers, services provided, and corresponding fees charged.

Google was also asked to publish its payment policy in an “unambiguous manner” while ensuring that it should not discriminate against other apps facilitating payment through the UPI in India vis-à-vis its own UPI app, in any manner.

Experts say the remedies imposed by the CCI are excessive and disproportionate.

“The remedies imposed would raise significant challenges for Google and impact its incentive to innovate. A lot more clarity and certainty would be required from the Commission for Google to comply with the remedies imposed by the Commission,” said Akshayy S Nanda, partner (competition law and personal data protection practice), Saraf & Partners.

“As far as the allegations against the commission fee charged by Google, I am of the view that the CCI has taken the correct stand that it is not a price regulator or price setter. Prices must be determined by market forces and price regulation by an antitrust regulator would be the anti-thesis of competition law,” Nanda said.