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CCI slaps Rs 936 Crore fine on Google for Play Store policy, second penalty in a week

The Competition Commission of India has imposed a fine of Rs. 936.44 crore on the tech giant.

Google has been given 30 days to provide the required financial details and supporting documents.

The committee found that Google occupies a dominant position in the licensable operating system for smart mobile devices and app stores for the Android market for smart mobile operating systems and has reaped the benefits of indirect network effects.

“The app stores have become a necessary medium for the distribution of applications to the end users and the availability of app store(s) is directly dependent on the operating system installed on a smart device,” the CCI order said.

The committee noted that the Play Store policy requires app developers to make exclusive and mandatory use of Google Play Billing System (GPBS). Such a billing system is used not only for the purchase of the app, but also for the in-app purchases inside, and the developers cannot provide a separate link to a web page for the payments for in-app purchases, it says.

The committee called such practice arbitrary and devoid of any legitimate business interest, noting that if app developers did not follow Google’s policies, they were not allowed to put their apps on the Play Store, resulting in the loss. from a huge pool of customers in the form of Android users.

The committee also investigated allegations of excluding competing UPI apps as effective payment options in the Play Store.

The committee argues that the intent flow technology is superior and easier to use than the collect flow technology, providing significant benefits to both customers and merchants, and has a higher success rate due to lower latency, and found that Google Pay is integrated with intent flow methodology, while other UPI apps can be used via the collect flow methodology.

Google informed the committee that it recently changed its policy and allowed competing UPI apps to integrate with intent flow.

However, the CCI concluded that the mandatory use of GPBS for app purchases and in-app purchases constitutes the imposition of unfair terms on app developers as it results in the denial of market access for payment aggregators and app developers.

For example, the committee passed the order that Google cannot prohibit app developers from using third-party billing processing services for app purchases and in-app purchases.

Google will not impose anti-driving restrictions or restrict app developers from communicating with their users to promote their apps and offerings in any way, as the CCI has ordered.

Furthermore, it has ordered that Google must not in any way restrict end-users to access and use within apps, the features and services offered by app developers and that it must formulate a policy regarding data collected from its platform and the like. will share data with app developers and related entities.

Further, Google may not “impose” any term (including price-related terms) on app developers that is unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers and ‘discriminate’ other apps that make payment through UPI in India versus its own UPI app, one way or the other.

Last week, CCI imposed a fine of Rs. 1,300 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.

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