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News Analysis: CCI connect to Google extending third party in-App billing pilot to India?


Internet search giant Google’s move to introduce an option of third party billing system on its play store, albeit on a pilot basis, is largely being perceived to be aimed at softening the impending blow from the Competition Commission of India (CCI).


Competition law experts believe the timing of the move last Friday to be a dead giveaway. Google’s announcement came within 48 hours of the CCI concluding its hearing and reserving judgment on the much talked Google’s Play Store Billing probe. Experts interpreted Google’s announcement to be a message to the competition watchdog to take a lenient view.

“It is a moot point as to whether it is a ploy by Google to use it as a bargaining chip in the penalty issue with the Competition Commission or whether it is a genuine market correction,” said a competition law expert.

“People are clueless about the background. Many people are looking at this (announcement to pilot third party billing system) innocuously. The point is they are facing an imminent order.”

It may be recalled that the CCI had initiated a probe in November 2020 to look into allegations that Google abused its dominant position to push its payment system. CCI initiated the investigation in relation to mandatory use of Google billing system by app developers for charging their users for purchase of apps on Play Store and/or for In-App purchases. 

The CCI was of the  prima facie view that mandatory use of Play Store’s payment system restricts the choices available to the app developers. CCI directed its Director General to investigate the matter and furnish a report. In March this year, the Additional Director of CCI submitted findings, holding Google guilty.

The Director General submitted a 13,000 page report to the CCI which was also shared with Google in June 2022. CCI also directed Google to submit its objections to the report by July 7 this year. Against this deadline, Google approached the Karnataka High Court seeking more time to respond to the investigation report. The High Court extended the time for Google to submit its objections/suggestions to the investigation report by July 30, 2022. 

In December 2021, Google had pushed the implementation of its mandatory use of its payment system for in-app purchases to October 2022.

Legal experts primarily have three shades of opinions on this major development—one that points towards CCI taking a lenient view now as Google is making an earnest attempt to bring about market correction.

The second set of opinions view the Google’s step as a “pure gimmick” and there is no certainty on the third party billing system being available on a constant basis.

The third relates to the concept of commitment and settlement, which is sought to be introduced through the Competition (amendment) Bill introduced in Lok Sabha on August 05. Some view it as a commitment that Google is giving. Had this commitment and settlement provision been there in Indian competition law, Google would have come to CCI earlier to give a commitment and settle the issue. In the absence of such a mechanism, the CCI may be prompted to take a lenient view and just give a finding as to whether they have done a contravention or not. 

As per a blog published by Google on Friday, it has allowed non-gaming app developers to use third party billing system in addition to Google’s own billing system. Now, non-gaming app developers can select a payment processor of their choice for the users based in Europe, Australia, Indonesia, Japan and India.

App developers opting for third party billing system need to provide customer support to its users and a process to dispute unauthorised transactions. Earlier, only Google’s own billing system was allowed to be used for processing the payments related to paid apps as well as paid digital content within the apps.

Irrespective of CCI’s final order, domestic fintech companies likely to benefit from the Google’s latest move as they charge a fraction of what the tech major collects from app developers. This will ultimately benefit consumers, too, who pay less for their in-app purchases!

Published on

September 05, 2022



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