The early findings of a comprehensive examination by India’s antitrust authority found Google’s invoicing structure for app developers to be “unfair and discriminatory,” setting the path for future penalties.
According to documents obtained by Bloomberg News, the Indian Competition Commission found Google discriminated against developers in its Play store charging structure. The conclusions are the result of a months-long study sparked by developer complaints that the US internet giant charges an excessively high cost for utilizing Android app stores and its proprietary payments service.
Regulators throughout the world have accused Google’s parent company, Alphabet Inc., and Apple Inc. of pushing developers to use their payment systems in exchange for a disproportionate piece of income. After regulatory action in South Korea, Google was required to develop an alternative billing mechanism. Google announced a 4% charge reduction for app developers in that market.
According to the Indian agency’s preliminary report dated March 14, Google is imposing unfair and discriminatory conditions in violation of the legislation.
As the market for UPI-enabled digital payment apps is multi-sided, and network effects will come to a point whereby Google Pay’s competitors will be completely banned from the market in the long term, Google’s actions are also culminating in the denial of market access to competing UPI apps.
In India, the reaction has been vehement, emphasizing how Google’s problems could stifle future expansion. More than 200 entrepreneurs got together to lobby the government to block it from levying a 30 percent tax on smartphone app purchases, which is its regular practice around the world. Despite an outcry in late 2021, Google’s implementation of the law was postponed, and the country’s tech industry is still determined to rein in the behemoth.
The antitrust agency’s representatives did not immediately reply to calls for comment. In a statement, Google stated, “We will continue to engage with the CCI and demonstrate that our practises benefit Indian consumers and developers without in any way restricting competition.”
The uproar in India mirrored worldwide criticism to Google and Apple’s fee structures in their online app shops. Epic Games Inc., the creator of Fortnite, has launched a lawsuit in the United States against the two firms for the way they levy such fees.
When they sense a clear national interest, India’s authorities have shown that they are willing to go after the largest firms and take tough action. To safeguard local operators, companies like Apple have been forbidden from having their own retail outlets for years, while TikTok and over a hundred other Chinese apps have been blocked due to security concerns.
Last month, Alphabet said that some apps will be able to bill consumers directly instead of through Google, as a concession meant to assuage raising antitrust concerns. The new technique, which Google is calling an experiment, begins with Spotify Technology SA, a streaming powerhouse.
Google used to charge a 30% commission on most app store purchases and subscriptions, but in recent years, the cost has been reduced to 15% for media companies like Spotify. Spotify is one of several organizations that have expressed dissatisfaction with their inability to implement their own billing systems on app stores for mobile devices.
