Internet group ADIF urges CCI to review Google’s app billing system

Under this system proposed by Google, app developers need to pay a commission of 11-26% to the US-based tech giant. ADIF made a representation to the CCI last week on this issue, in which it has urged the competition regulator to “look into these abusive dominance practices of Google on an urgent basis”.

Last October, following two antitrust rulings against Google by the CCI, the Android-maker had paused the enforcement of its new billing system for in-app purchases on Android devices, which was to be effective from October 31.

“Unfortunately, there is no quorum at the CCI; and hence Google is taking advantage of an institutional lacunae, bringing in user choice billing in haste and in the process, hurting startup story and also disregarding the CCI order,” ADIF said in a press note.

Also read | Google proposals non-compliant with CCI’s remedies: ADIF

“Google, a company that has built its reputation on innovation and disruption, is resorting to these practices despite Competition Commission of India directing Google to mend its ways in a similar case and fined it Rs 937 crore for abusing its dominant position with regard to its Play Store policies. This commission is not so different from the colonial ‘Lagaan’ – it is unfair to app developers and to the millions of users who rely on digital applications for their day-to-day activities,” the ADIF said.

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It also added that Google’s policy on charging commission to app developers could “take away a huge chunk of the revenue made by Indian app developers and startups, and would render business models of many young startups unviable, especially the one relying on in-app purchases, paid apps or subscriptions”.Following the two CCI orders last year, which together saw a penalty of Rs 2,274.2 crore being imposed on the company, Google had announced this January that it was introducing around five changes to the way it operates Android and Google Play billing in India. Among these was a step to expand user choice billing to all developers.

Later in February, the company told developers that they have till April 26 to comply with the new Google Play payments policy, which permits alternative billing options.

“This is a serious issue for India’s growth-story, as it can hamper the country’s entrepreneurial zeal and hinder the development of unicorns that are capable of providing global solutions. As Google is choosing the sectors arbitrarily for which these commissions would apply, this literally means that Google would determine the winners and losers in the Indian technology ecosystem,” ADIF said.

An e-mail query sent by ET to Google did not elicit a response.

Last week, the National Company Law Appellate Tribunal (NCLAT) upheld CCI’s Rs 1,338 crore fine on Google, saying the competition watchdog’s order did not violate the principles of natural justice.

In its two orders – on October 20 and October 25 last year – the competition regulator had directed Google to make close to 20 changes in the operation of its services in India, which included providing alternative payment options to developers.

In one of its ruling, CCI had said: “Google shall allow, and not restrict app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps. Google shall also not discriminate or otherwise take any adverse measures against such apps using third-party billing/ payment processing services, in any manner”.