The investigation is with respect to “discriminatory” Play Store pricing policy
Fair trade watchdog CCI, on Friday, ordered a probe against Google for alleged discriminatory practices with respect to its Play Store pricing policy after finding a prima facie violation of the competition law. The order for detailed investigation comes less than two years after the Competition Commission of India (CCI) penalised and passed various directions against Google regarding Play Store policies.
The regulator’s latest decision came on a raft of complaints that Google’s updated payment policies in relation to its proprietary app store—Google Play Store—which is alleged to be in violation of the competition law.
The complainants are Anupam Mittal’s People Interactive India Pvt Ltd, Mebigo Labs Pvt Ltd, Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF).
The order also comes less than two weeks after Google removed some apps from the Play Store over payment issues and later reinstated them.
In their complaints, they alleged that the payment policies are stated to be impacting several stakeholders, including app developers, payment processors and users alike.
A Google spokesperson said it is examining the CCI’s order to initiate the investigation. “The CCI has previously examined our service fee in detail between 2020 and 2022 and found no illegality. However, we take our commitment to comply with local laws and regulations in India seriously and will cooperate with the process in every way,” the spokesperson said.
The CCI noted that there were concerns regarding the revenue distribution model within the Google Play Store app developers potentially facing substantial costs, with nearly half of their chargeable value, towards the service fee of Google (up to 30 per cent) and an additional 20 per cent spent on advertising across Google’s platforms and third-party apps.
However, Google claimed that 97 per cent of developers pay no service fee at all.
According to the regulator, Google has other revenue streams from the ‘free apps’ listed on Play Store, in the form of advertisement-related revenue or otherwise.
Therefore, the watchdog said it appears that these 97 per cent of apps also contribute to the recoupment of the costs associated with the Play Store and Android ecosystem, in addition to the service fee.
In its 21-page order, the regulator stated that Google has claimed that the service fee has been charged for a multitude of services provided by Play Store to app developers.
If the fee is for the services rendered to app developers, then the reasoning given by Google does not appear to be reasonable, the watchdog n.
Further, it said the issue assumes importance in view of the fact that various physical delivery apps are very large in size and yet do not contribute towards recoupment of Google’s investment in Play Store (as claimed by Google).
“Extending this further, it is not clear as to why consumption-only apps have been allowed relaxation when their content is consumed within the app. On the whole, the applicability of service fee seems to be arbitrary and discriminatory,” the CCI said.