Google is now under investigation by India’s competition watchdog, as per a regulatory order viewed by Reuters on Friday. The investigation was initiated in response to complaints filed by certain companies alleging that the service fees charged by the American tech company for in-app payments are in violation of a previous antitrust directive.
The Match Group, which owns Tinder, along with various Indian startups, has requested that the watchdog look into Google‘s recently implemented User Choice Billing (UCB) system, which they claim to be anti-competitive.
On Friday, the Competition Commission of India (CCI) issued a non-public order, stating that an inquiry should be conducted regarding Google’s in-app payment service fees, following complaints from certain companies. There has been no response from Google regarding this development.
Last October, the CCI imposed a $113 million penalty on Google, mandating that the tech giant permit third-party billing and put an end to the practice of compelling developers to use its in-app payment system, which charges commissions ranging from 15 percent to 30 percent.
After facing criticism, Google introduced the User Choice Billing (UCB) system that permits users to choose alternative payment methods alongside Google’s for purchasing in-app digital content. However, some companies have lodged complaints, claiming that the new system still imposes a significant “service fee” ranging from 11 percent to 26 percent.
According to the Match Group and the Alliance of Digital India Foundation, Google’s action of continuing to impose a “service fee” ranging from 11 percent to 26 percent via its UCB system indicates non-compliance with the prior antitrust directive, which mandated that Google refrain from enforcing any “unfair and disproportionate” terms and conditions.
The competition watchdog has requested that Google clarify specific provisions linked to its in-app payment system before and after the introduction of the User Choice Billing (UCB) system, as well as provide information on the policies governing the sharing of user and app developer data. Google has been given four weeks to respond to the order.
Google has maintained that the in-app payment service fee is necessary to support investments in the Google Play app store and the Android mobile operating system, allowing them to be distributed for free while also covering expenses related to developer tools and analytics services. The tech giant regards India as a crucial growth market; however, it faces additional regulatory hurdles, such as a recent setback that forced it to modify how it promotes its Android system.
(With inputs from Reuters)
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