CCI to probe allegations against Google for Google Pay being preinstalled on Android phones, Play Store rules

The Competition Commission of India (CCI) has sought an investigation into a case against Google alleging that the company has abused its dominant position in the market. The Mint reports that while the complainant has made six allegations against Google, the CCI has chosen to investigate only two of those counts.

These two counts that CCI wants to probe includes Google’s policy that requires app developers to use their own tools for content and services sold through the Play Store and the fact that Google Pay is a default app that comes pre-installed on Android smartphones.

The CCI wants to look into “Exclusivity Regarding Mode of Payment for Purchase of Apps and In-App Purchases (IAPS)" and “Pre-installation and prominence of Google Pay on Android Smartphones".

For the other four allegations, the CCI said that the informant has not provided enough proof to require a probe and these include “Search manipulation and Bias by Google in favour of Google Pay", “Prominent placement of Google Pay on the Play Store", “Search advertisement manipulation on the Play Store" and “Exclusivity Requirement Imposed by Google Resulted in Unfair Terms Being Imposed on Users".

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The Mint reports that the case includes salient points that have been raised by Indian startups founders against Google’s policy that has apps using their own payment tools for selling services and content on the Play Store. The complaint is focused around Google Pay but the outcome could have an impact on how Google enforces some of its polices in the Play Store in India.

Post the probe, if the CCI rules against Google, it could work in favour of Indian startups who have been protesting against the Play Store commissions for a while now. Startup founders like PayTM’s Vijay Shekhar Sharma, Razorpay’s Harshil Mathur and others have criticised Google for making it mandatory for app makers to use their payment tools for purchases made through the Play Store.

Kanika Chaudhary Nayar, Partner at L&L Partners, told Mint that “in dominance cases the CCI has the power to penalise Google on the average of its relevant turnover for the last three years”. This is similar to the ₹135.86 crore fine levied on Google in 2018, for abusing dominance in Search.

Also Read: Google faces new antitrust case in India over abuse in smart TVs market

Nayar added that the CCI can theoretically also has the power to break up Google and disintegrate Google Pay from Google. However, the CCI has never used this power in India despite the law being around for over a decade. The CCI also has the power to issue a cease and desist order which it could use either “simpliciter or in addition to asking Google to pay a penalty too”.

As per reports, this is one of the three antitrust cases with the CCI against Google. The commission had fined Google ₹135.86 crore in 2018 for abusing dominance in Search, and it is also looking into cases alleging abuse of dominance with AndroidTVs and smartphones as well.

“We are pleased that the CCI has rejected several claims made by the anonymous complainant. On the remaining concerns, first, we are confident that the CCI will find that GPay operates in an extremely competitive environment, and owes its success to its ability to offer consumers a simple and secure payments experience. Secondly, numerous distribution channels exist for apps on the Android platform; Play is not the only app distribution option for Android," Google said responding to CCI's probe plans. 

"Users choose Google Play because we ensure a safe, secure, and seamless experience. Play's billing system is a fundamental part of meeting this user expectation and helps ensure our continued investment in the many important things needed to make developers successful," Google added.