NEW DELHI : Google on Tuesday paused the enforcement of a policy that mandated Indian app developers to use its proprietary Play billing system, a week after India’s antitrust regulator ruled that the policy stifles competition.
The Play billing policy, under which app developers were required to use Google’s built-in payment methods, was to be enforced from 31 October. However, on 25 October, the Competition Commission of India (CCI) ruled that Google cannot force developers to use its payment system.
“Following CCI’s recent ruling, we are pausing enforcement of the requirement for developers to use Google Play’s billing system for the purchase of digital goods and services for transactions by users in India while we review legal options and ensure we can continue to invest in Android and Play,” Google said.
If Google had enforced the policy, apps that failed to integrate Google’s billing mechanism for in-app purchases after 31 October may have been suspended or removed from Play Store, hitting their revenues as Android phones account for more than 95% of smartphone users in India.
Mint reported on 25 October that the CCI ruling would likely spur app developers and marketers to lobby regulators to force Google to cut the in-app transaction fees. Experts said it might be difficult for Google to bring back the mandatory usage of its billing instruments, and it may also be the first step towards normalizing the transaction fees that other payment merchants charge.
“Even if Google calls this a temporary move, I do not see a way for them to remain compliant with the new regulation and also bring its previously intended payment policy back. As a result, it may look to adopt a different way to continue to generate revenue,” said technology policy analyst Prasanto K. Roy.
According to data filed with the Registrar of Companies (RoC) as of FY21, Google earned ₹14.8 crore through payments on Play Store — a meagre 0.2% of its annual revenue in the fiscal.
To be sure, Google has been in the process of making changes to its policy as well. Last month, it began a pilot programme that allowed app vendors to use third-party billing systems while still distributing apps through the store. However, even when a third-party payment mechanism is used, Google offers a 4% discount on Play Store commission rate—keeping its base rate of 15% commission for the first $1 million revenue and 30% thereafter intact.
Google’s suspension of the Play Store billing compliance deadline likely signals a positive move, app developers said.
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