CCI Orders Probe into Google's Billing System Over Alleged Dominance Abuse

Mainstream
18-Mar-2024
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The Competition Commission of India (CCI) has initiated an investigation into Google's User Choice Billing (UCB) system, suspecting the tech giant of exploiting its dominant market position by imposing exorbitant charges on app developers.

Based on a prima facie view, the CCI directed its Director General (Investigation) to scrutinize Google's practices, citing internal documents revealing a significant disparity between the company's cost and the service fees levied on developers.

"Google is charging 4 to 5 times its cost to the app developers which on a prima facie level appears to be disproportionate to the economic value of services being rendered to the app developers and appears to be an abuse of dominant position by Google," the Commission stated.

The investigation stems from a complaint lodged by Indian Broadcasting and Digital Foundation (IBDF), the Indian Digital Media Industry Foundation (IDMIF), and several companies, alleging that Google's revised payment policies on the Google Play Store violate antitrust regulations.

Google's UCB system, introduced in September 2022, allows app developers to offer alternative billing systems alongside the Google Play Billing System (GPBS). However, the commission raised concerns over the disparities in service fees between GPBS and alternative billing systems, positing that it may favour Google's apps and stifle market competition.

The Commission emphasized that antitrust regulators must intervene to prevent unfair pricing practices, particularly in markets dominated by significant barriers to entry.

"While the long-term solution continues to be ensuring a competitive marketplace, in the short term the intervention by the antitrust regulators to prevent unfair pricing assumes importance in critical internet based economic activities," the Commission noted.

Furthermore, the investigation will probe Google's additional charges for advertising across its platforms, indicating a potential imbalance in the digital ecosystem.

The Commission's decision to investigate underscores the need for regulatory scrutiny to maintain a fair and competitive digital marketplace, particularly in industries characterised by dominant players wielding significant market power.

As the investigation unfolds, it is expected to shed light on Google's practices and their implications for app developers and consumers alike, shaping the future landscape of digital commerce in India.

Author: Anushka Taraniya

News Writer, MIT ADT University