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ADIF urges CCI to evaluate Google’s user choice billing

Alliance of Digital India Foundation (ADIF), a New Delhi policy think tank comprising prominent Indian internet companies such as Matrimony, Paytm, MapmyIndia, TrulyMadly and other local entrepreneurs, said on April 5 that it has requested the CCI (Competition Commission of India) to look into Google’s user choice billing system ‘on an urgent basis’.

In February 2023, Google had announced that it will allow app developers to offer an alternate billing system for in-app purchases within India from April 26, 2023, in a bid to comply with CCI’s directives.

As per the new policy, if a user pays through the alternative billing system (also termed as User Choice billing system), the transaction will still be subjected to a service fee, but at a 4 percent rate reduction.

This effectively means that developers will have to shell out a service fee to Google ranging from 6-26 percent for in-app purchases and subscriptions, depending on the type of app/service and the annual revenue it generates on Google Play, as compared to the regular 10-30 percent service fee.

The move was after Google had paused the enforcement of its in-app billing policy in India in November 2022, following the CCI’s antitrust order on Play billing. The policy has already been made mandatory for in-app digital content purchases for users outside of India.

In October 2022, CCI had directed Google not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play besides a range of corrective measures to modify the company’s app payment policies.

It also fined Google Rs 936.44 crore for abusing its dominant position with regard to its Play Store policies.

‘Abusive dominance practice’
ADIF terms Google’s plan to implement the user choice billing system in India as an “abusive dominance practice” by the company.

“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 start up story and also disregarding the CCI order,” the think tank said in a statement.

It also cited the recent instance of Twitter Blue, the social media platform’s subscription service, having differential pricing on the web and its mobile app, to compensate for the 15-30 percent commission fee charged by Google and Apple on subscriptions.

Twitter Blue is currently available in India for a monthly fee of Rs 650 on the web and Rs 900 on mobile devices. Facebook parent Meta’s paid subscription service Meta Verified is also expected to be available for a monthly fee of Rs 1,099 on the web and Rs 1,499 on the mobile app, Moneycontrol reported on March 29.

“This would 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,” it said.

Google however has maintained that the service fee it levies has never been simply for payment processing. “It reflects the value provided by Android and Google Play, and all of the developer services we offer, including app distribution and discovery, the commerce platform, developer tools, analytics, training, and more,” a Google spokesperson had earlier told Moneycontrol.

India is among the biggest markets for Google Play in terms of app downloads and users. The country is also emerging as a key monetisation opportunity for Google Play, driven by the rising adoption of digital transactions in the country.

NCLAT’s Android antitrust ruling
This development however comes after the National Company Law Appellate Tribunal (NCLAT) had on March 29 set aside four of the 10 remedial measures ordered by the CCI in a separate antitrust order pertaining to Google’s Android business.

As per the NCLAT ruling, Google will not need to allow hosting of third-party app stores on Play Store and can continue placing curbs on distributing apps through the sideloading process. The company also need not share its proprietary Play Services APIs with rivals, original equipment makers (OEMs) and developers or allow users from removing pre-installed apps such as Google Maps, Gmail and YouTube.

The tribunal however had upheld CCI’s Rs 1,338 crore penalty on Google, saying that the competition watchdog’s order does not suffer from any ‘confirmation bias’

In January 2023, the tribunal had also declined interim relief to Google on the Rs 936.44 crore penalty. It is set to hear the matter on April 17. MoneyControl

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