The Alliance of Digital India Foundation (ADIF) — a think tank focusing on digital start-ups — has knocked on CCI’s doors for initiating proceedings against tech giant Google for latter’s non-compliance in both letter and spirit with the competition watchdog’s specific directions on allowing third party billing system without any conditions including price related ones.
Although Google has now permitted alternative billing system, the tech giant continued to charge app developers, according to the ADIF’s complaint before CCI, “exorbitant 11-26 per cent commission” (in the form of service fee) for use of third-party billing systems in violation of CCI’s directions.”
“While an alternative billing system will be permitted by Google, it will continue charging service fees from the developers which will be 4 per cent less than the normal service which they would charge if the user had availed of the GPBS option i.e., the commission rate under user choice would be 11 per cent or 26 per cent, as the case may be. Therefore, despite not using any service from Google, app developers will be forced to pay commissions to Google,” ADIF has said.
Meanwhile, reacting to the allegations, Google spokesperson told businessline that “When a consumer chooses to use an alternative billing system, the standard service fee the developer pays will be reduced by 4 per cent. Google Play’s service fee has never been simply a fee for payment processing. It reflects the value provided by Android and Google Play, and all of the developer services we offer, including app distribution and discovery, the commerce platform, developer tools, analytics, training, and more.”
Violation of CCI’s directions
However, experts said that Google continues to be in violation of complying with CCI’s 10 non-monetary directions in the Android ruling.
Google had recently changed its billing requirement for app developers wherein it has mentioned that if a user pays through an alternative billing system, the Google Play service fee will be reduced by 4 per cent.
This change claimed by Google is in response to regulatory developments in India, which refers to orders of the CCI. “This is nothing but another blatant attempt by Google to evade its obligation under the law and while Google claims that these changes are ostensibly in response to the regulatory development, the said change is in gross violation of the remedies mentioned in the CCI Order,” an ADIF spokesperson said.
Therefore, despite not using any service of Google, app developers will be forced to pay commissions to Google. This is a clear violation of a specific direction of the CCI that Google shall not impose any condition (including price related condition) on app developers, which is unfair, unreasonable, discriminatory, or disproportionate to the services provided to the app developers, according to ADIF.
Further, there is absolutely no transparency as to why Google will charge 11/26 per cent even when the user avails of a third-party processing service. This becomes all the more problematic considering that most of the transactions carried out in the app digital ecosystem do not use Google Play Billing System (GPBS).
ADIF spokesperson said that this “exorbitant commission” stifles down innovation and business growth in Indian start-ups, as a major component of the revenue for subscription-based services and in-app purchases is taken by Google, without providing any additional service.
Such practices are sheer abuse of dominance, as Google claims Android an open-source platform, but mandates the app developers to pay high commission charges for using the Google platform, the spokesperson alleged.
