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News Analysis: CCI Connects with Google to Expand In-App Billing Pilot in India?


Internet search giant Google’s decision to introduce a third-party billing system option on its Play Store, albeit on a pilot basis, is widely seen as aimed at softening the impending blow from India’s Competition Commission (CCI).

Competition law experts believe the time of the move last friday to be a dead giveaway. Google’s announcement came within 48 hours of the conclusion of the TCC hearing and reservation of its judgment in the high-profile investigation into Google’s Play Store billing. Experts interpreted Google’s announcement as a message to the competition watchdog to take a lenient stance.

“It is debatable whether this is a ploy by Google to use it as bargaining chip in the sanctions case with the Competition Commission or if it is a real correction market,” said a competition law expert.

“People have no idea of ​​the background. A lot of people look at this (ad to drive third party billing system) harmlessly. The thing is, they’re facing an impending order.

We can recall that the CCI had launched an investigation in November 2020 to investigate allegations that Google abused its dominant position to push its payment system. CCI has opened the investigation regarding the mandatory use of Google’s billing system by app developers to charge their users for the purchase of apps from the Play Store and/or for in-app purchases.

The CCI was At first glance consider that the mandatory use of the Play Store payment system limits the choices available to app developers. CCI asked its managing director to investigate the matter and provide a report. In March this year, CCI’s additional director submitted his findings, finding Google guilty.

The CEO submitted a 13,000-page report to the TCC which was also shared with Google in June 2022. The TCC also asked Google to submit its objections to the report by July 7 this year. Against this delay, Google approached the Karnataka High Court to get more time to respond to the investigation report. The High Court has extended the time for Google to submit its objections/suggestions to the inquiry report by July 30, 2022.

In December 2021, Google had pushed back the implementation of its mandatory use of its payment system for in-app purchases to October 2022.

Legal experts mainly have three shades of opinion on this major development – one that indicates CCI is now taking a lenient stance as Google is seriously trying to induce a market correction.

The second set of opinions see Google’s move as a “pure gimmick” and there is no certainty that the third-party billing system will be permanently available.

The third relates to the concept of Commitment and Settlement, which is expected to be introduced through the Competition (Amendment) Bill presented to Lok Sabha on August 5. Some see it as a commitment that Google gives. Had this undertaking and settlement provision been present in Indian competition law, Google would have come to the ICC sooner to engage and settle the matter. In the absence of such a mechanism, the ICC may have to be lenient and content to note whether or not it has committed an infringement.

According to a blog posted by Google on Friday, it allowed developers of non-gaming apps to use a third-party billing system in addition to Google’s own billing system. Now, non-gaming app developers can select a payment processor of their choice for users based in Europe, Australia, Indonesia, Japan, and India.

App developers who opt for a third-party billing system must provide customer support for their users and a process to dispute unauthorized transactions. Previously, only Google’s own billing system was allowed to be used to process payments related to paid apps as well as paid digital content within apps.

Regardless of CCI’s final order, domestic fintech companies stand to benefit from Google’s latest move, as they charge a fraction of what the tech major collects from app developers. This will also benefit consumers, who pay less for their in-app purchases!

Published on

September 05, 2022