Google Disobeying CCI Orders Blatantly: Digital Start-up Thinktank

The Alliance of Digital India Foundation (ADIF), the think tank of Indian digital start-ups, on Thursday claimed Google of violating the directives of the Competition Commission of India (CCI) by charging unreasonable service fees from developers using alternative billing systems.

The think tank has also requested authorities, including CCI, to look into the matter and ensure Google complies with the specific directives of the CCI, “in letter and spirit”.

According to Google Play’s policies, developers are subject to a Google Play service fee based on a percentage of the purchase price or digital purchases in their application (app).

AIDF in a statement stated: “This is nothing but another blatant attempt by Google to evade its obligation under the law. While Google claims 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.”

The CCI in October 2022 directed Google to make significant changes to its Play Store policies after it found several anti-competitive practices on the platform. The competition watchdog also ordered Google to allow app developers to use any third-party billing or payment processing services for purchasing apps, as well as in-app purchases. Google started acting on the order in January after the Supreme Court refused to grant any interim relief in the matter.

The revised policies of Play Store allowed app developers to offer alternative billing systems, apart from Google Play’s billing system. However, the app store continued to charge a service fee on the transactions with a discount of 4 per cent, compared to previous charges. Therefore, the current effective service fees on payments through an alternative billing system stand at 11 per cent for the first $1 million earned by the developer in revenue each year and 26 per cent for earnings above it.

“This exorbitant commission stifles 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 is an open-source platform but mandates the app developers to pay high commission charges for using the Google platform,” said a spokesperson for AIDF.

The spokesperson added that this would force app developers to pay commissions to Google despite not using any service of Google’s.

“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,” observed ADIF.

According to Google’s help centre, the service fee reflects the value provided by Android and Google Play and all of the developer services offered by it. These include app distribution and discovery, the commerce platform, developer tools, analytics, training, and more.

"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," a Google spokesperson told Business Standard.