The Alliance of Digital India Foundation (ADIF) – a think tank focused on digital start-ups – has knocked on CCI’s doors for launching a case against tech giant Google over the latter’s word of specific guidance from the competition regulator and spirit has not complied with any third-party billing system without conditions, including price-related.
Although Google has now allowed alternative billing systems, the tech giant continued to charge app developers “an exorbitant 11-26 percent commission” (in the form of service fees) for use of third-party billing systems that violated the instructions, according to ADIF’s complaint before CCI violated by CCI.”
“Although an alternative billing system will be allowed by Google, it will continue to charge service fees from developers that are 4 percent less than the normal service they would charge if the user had taken the GPBS option, i.e. the commission rate below User choice would be 11 percent or 26 percent, as the case may be. Therefore, app developers will be forced to pay commissions to Google even though they are not using any service from Google,” ADIF said.
In response to the allegations, a Google spokesman told businessline: “If a consumer opts for an alternative billing system, the standard service fee paid by the developer is reduced by 4 percent. Google Play’s service fee was never just a payment processing fee. It reflects the value that Android and Google Play bring, as well as all of the developer services we offer, including app distribution and discovery, the commerce platform, developer tools, analytics, training and more.”
Violation of CCI’s instructions
However, experts said that Google continues to violate the CCI’s 10 non-monetary directives in the Android ruling.
Google recently changed its billing requirements for app developers, mentioning that Google Play’s service fee will be reduced by 4 percent if a user pays through an alternative billing system.
This change, claimed by Google, is in response to regulatory developments in India related to orders from the CCI. “This is nothing more than another blatant attempt by Google to evade its legal obligation, and while Google claims that these changes are allegedly in response to regulatory developments, the change in question constitutes a gross violation of the IHK remedies referred to in the Regulation,” said an ADIF spokesman.
Therefore, app developers are forced to pay commissions to Google even though they are not using any service from Google. This is a clear violation of a specific directive of the CCI, which states that Google must not impose terms (including pricing-related terms) on app developers that are unfair, unreasonable, discriminatory, or disproportionate to the services rendered to the app developers ADIF.
Furthermore, there is absolutely no transparency as to why Google charges 11/26 percent even if the user engages a third-party processing service. This becomes even more problematic when you consider that most transactions in the digital app ecosystem do not use the Google Play Billing System (GPBS).
The ADIF spokesman said this “exorbitant commission” stifles innovation and business growth among Indian startups, as a significant part of revenue from subscription-based services and in-app purchases is taken over by Google without providing additional services.
Such practices are pure abuse of power, as Google claims Android is an open-source platform but requires app developers to pay hefty commission fees for using Google’s platform, the spokesman said.
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