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The CCI has dismissed four petitions of Indian app companies filed against Google’s new Play Store billing policy to levy an 11 to 26% charge on in-app payments. File
| Photo Credit: Reuters

Fair trade regulator CCI on March 20 dismissed four petitions of Indian app companies filed against Google’s new Play Store billing policy to levy an 11 to 26% charge on in-app payments.

Indian-origin app firms alleged that Google’s Play Store payment policies are anti-competitive.

However, CCI made clear that nothing stated in this order shall be as tantamount to a final expression of opinion on the merits of the case, and the Director General will conduct the investigation without being swayed in any manner whatsoever by the observations made herein.

“The commission is of the view that the informants have failed to meet the necessary criteria for grant of interim relief as propounded by the Supreme Court.

“The informants have not been able to project any higher level of prima facie case warranting a positive direction as sought for by the informants at the interim stage,” CCI said in its order.

The complainants were Anupam Mittal’s People Interactive India Pvt Ltd, Mebigo Labs, the Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF).

The petitions were seeking the regulator to restrain Google from collecting any fee for transactions involving paid downloads or in-app purchases on apps offering digital products/ services.

While there may be concerns about the fairness of Google’s fee structure as outlined by the regulator in its prima facie order dated March 15, it is essential to recognise the costs and responsibilities associated with maintaining and operating app stores, CCI noted.

In its order, the regulator stated, “Informants have not been able to demonstrate a case in their favour for grant of interim relief for complete restraint on Google from the collection of its fee”.

CCI also said that no case whatsoever has been made out by the informants, which warrants a grant of interim relief. Accordingly, the applications stand dismissed.

Indian apps representative body Alliance of Digital India Foundation (ADIF) said it is concerned about the high commission imposed during in-app purchases that are not in the best interest of our nation’s digital entrepreneurs.

“These rates, ranging from 11 to 26 per cent, are significantly higher. The rates should be reconsidered and mutually favourable to both. This model will support the growth and sustainability of India’s digital economy. We trust the judicial process and await further hearings with the hope that the best interests of the Indian app development community will be prioritised by the Indian judiciary,” ADIF Associate Director Prateek Jain said.

The order came after the Competition Commission of India (CCI), on March 15, 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 CCI penalised and passed various directions against Google regarding Play Store policies.

The regulator’s 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 order also comes 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.

Government ministers on March 4 held multiple meetings with Google and startups that have been delisted from the tech giant’s Play store, but no solution seems to be on the horizon with Indian companies accusing the U.S. giant of abusing its dominant position.

In separate meetings with Minister of State for IT and Electronics Rajeev Chandrashekhar, and Union IT and Communications Minister Ashwini Vaishnaw, the troubled startups raised their concerns and sought support from the government.

The raging dispute is over Google imposing a fee of 11% to 26% on in-app payments after anti-competition body CCI ordered scrapping of an earlier system of charging 15-30%.

Google went ahead to remove apps that were not paying the fee after the Supreme Court did not provide interim relief to companies behind these apps in their battle against the search giant’s app marketplace fee.

While the Mr. Vaishnaw declined to share details on the meeting, he said, “I will share when it is finalised.” Mr. Chandrasekhar met Indian app developers’ body ADIF (Alliance of Digital India Foundation) virtually.

He said on social media platform X that the government will continue to work towards a level playing field for big and small firms alike while creating an ecosystem that will catalyze growth for startups under the leadership of Prime Minister Narendra Modi.

“Today, startups presented their concerns regarding a few policies of @google. Assured them that @GoI_MeitY will take it up with Google for a sustainable and long-term solution,” Chandrasekhar tweeted.

The Minister said there has been a deep and decisive transformation in India’s startup ecosystem over the past 10 years.

“From fewer startups in 2014, we now have more than 1 lakh startups and 113 unicorns, with the potential to add 10 lakh startups and 10,000 unicorns in the coming decade,” the Minister said.

ADIF said that its members met both ministers to voice out their concerns and seek support from the government.

“The government has assured us support for both immediate resolution and long-term framework. They extended support for our concerns, which were mainly about discriminative pricing, arbitrary revenue share, and Google misusing its dominant position in the market,” the industry body said.

Sources said that Google representatives met Mr. Vaishnaw earlier in the day and presented their version and explained the reason for the action.

Vinay Singhal, CEO of Stage OTT app, which was also delisted by Google app store Play on Friday, said that Google is misusing its dominant position in the market and price gouging to extract unnecessary exorbitant revenue from small start-ups.

“Most payment gateways charge 0.5-2% charges, whereas Google charges 15-30% for the same. Google is using its dominant position to price itself at a 30 per cent revenue share, without giving any justifications,” he said.

“The service of Google Play Store remains exactly the same for big names like Amazon, Uber and relatively smaller players like Kuku FM, Stage, Kutumb, and Truly Madly, but there is discrimination in charging where they are charging 15-30% from small apps, while they are charging nothing from the big names,” said Snehil Khanor, Co-founder and CEO of Truly Madly, a matchmaking app.

The founders said that they are obligated to use Google’s API while implementing any Google model, which gives them access to all of the company’s customer data, which is a clear violation of CCI’s order. “In the name of real-time billing, they want access to all our data. Moreover, Google has also asked for audit rights, which is an infringement of the DPDP act,” they said.

More than 200 apps have been delisted by the app store Play, out of which less than 15 apps have been reinstated.

“The apps that have been reinstated are those who have complied with Google’s policies. Most of us had to comply to get reinstated to maintain our visibility. People started considering us as fraud because they are unaware of what is actually happening”.

The troubled founders said that their revenues dropped by more than 40% in the last 3 days, since they were not acquiring any new customers.

They said that Google’s action has put a halt on our businesses.