India’s Competition Commission (CCI) has initiated an inquiry into Google after multiple companies have claimed that the service fee charged by the US firm for in-app payments violates an earlier antitrust directive. The CCI had imposed a fine of $113 million on Google in October, stating that it must allow the use of third-party billing and stop pressurizing developers to use its in-app payment system that charges a commission of 15-30 percent.
Allegations
Tinder-owner Match Group and Indian start-ups have requested the CCI to investigate Google’s new User Choice Billing (UCB) system, which they claim is anti-competitive. The companies have argued that the new system still imposes a high “service fee” of 11-26 percent, which means that Google has not complied with the earlier antitrust directive that ordered it not to impose any “unfair and disproportionate” conditions.
Order Issued by Watchdog
The CCI has issued an order stating that “it is of the opinion that an inquiry needs to be made.” In its order, the watchdog has asked Google to explain certain provisions related to the in-app payment system before and after UCB, and provide details of policies related to sharing of user and app developer data. Google needs to respond in four weeks.
Google’s Response
Google has not yet commented on the order. The company has previously stated that the service fee supports investments in the Google Play app store and the Android mobile operating system, and covers developer tools and analytic services. Google later began offering UCB to allow alternative payments alongside Google’s when purchasing in-app digital content.
India is a major growth market for Google, and the company faces other regulatory challenges, including a setback that forced it to change how it markets its Android system. The inquiry launched by the CCI is yet another challenge for the company, and it remains to be seen how Google will respond to the watchdog’s order.
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