India’s antitrust body has reportedly ordered an investigation that will look into whether Alphabet Inc’s Google has been taking unfair advantage of its market position in the country to promote its digital payments app. The tech giant has also been accused of forcing application developers to use its in-app payment system to settle transactions.
As reported by Reuters, the Competition Commission of India (CCI) had been following up on a complaint that had alleged that Google was using its dominant market position to promote its Google Pay app, which supports inter-bank money transfers and other types of digital transactions.
The CCI had noted that the tech firm’s agreements with smartphone companies to have the Google Pay app pre-installed may “disturb the level playing field.” The CCI had also recommended that local authorities should look into the matter.
The ongoing probe has now been handed over to the CCI’s investigation division. The case has reportedly been filed by an informant whose identity has not been disclosed (presumably due to security reasons).
The CCI had stated that there’s no need to look into some other allegations made against the Google Pay app.
Google’s management noted that they were satisfied with how the CCI was handling the issue and that they felt confident that the regulator would find that Google Pay already operates in a highly competitive environment.
However, the CCI pointed out that Google Play Store’s in-app billing system will require developers to pay a 30% commission for using the payment service. Developers won’t have an option to use any other payment service. The CCI confirmed that it will conduct an investigation into this new requirement (which may become effective March 31, 2022).
Google’s Android operating system is used by around 99% of India’s 500 million smartphones. Local startups have been critical of the tech giant’s dominant market position and have also expressed concerns regarding the 30% commission which they think is too high.
The CCI noted that the mandatory use of Google’s payment system limits the choices available to software developers, which is concerning. Google’s management has argued that the company’s billing system has been set up in a manner that ensures its continued investment in the “important things” required to make application developers “successful.”
This present case is notably one of many other antitrust issues that Google is dealing with in India. The tech company is also facing allegations regarding its unfair dominance of India’s smart TV market and also its mobile Android operating system (installed on most smartphones in the country).