In a relief for Android app developers and innovators, an Indian court has rejected Google's appeal against the order of the Anti-Equaling Court, which does not instruct Google to impose his own payment system on the app developers that forces them to cough as 30% and prevent them from offering cheap users.
While maintaining the order of the Competition Commission of India (CCI) passed on 25 October 2022, the National Company Law Appellate Tribunal {NCLAT) also reduced the fine of Rs.936.5 crore (USD 1.094 billion) imposed by CCI (USD 1.094 billion).
NCLAT accepted the Google controversy that a penalty of 7% can only be calculated on the “relevant revenue” generated from Google Play Store, not Google's total revenue in India ..
However, the NCLAT has upheld the most part of the Competition Commission order which determines “practical treatment” for acceptable conduct in the Indian market with the largest number of smartphones users.
Before NCLAT, Google challenged the CCI's findings. This allegedly incorrect test has been applied by CCI to assess its market practices and payment models. It said with a share of less than 1% in India's UPI payment system, it can hardly be accused of competitive practices. “The Commission failed to note that Google Play forms only a minimum part of less than 1% of comprehensive digital payment ecosystems in India.”
Google joined WhatsApp in India's Steel Regulatory Gridlock and the market competition Watchdog CCI to earn a hard-hitting order with heavy fines. WhatsApp imposed a fine of Rs 214 crore (USD Rs 25 million) to make its users use their personal data for advertisements, or to accept their policy of leaving their policy of leaving the platform. WhatsApp appeal is being heard in NCLAT which has temporarily lifted the ban on data sharing for advertising purpose. But both are not alone. Another Bigtech Openi has questioned the very location of Indian courts when Indian media companies have challenged using their dataset to develop their chat Artificial Intelligence (AI) model.
What was CCI order?
In particular, before the order, the Competition Commission received an inquiry conducted by a Director -level officer.
In its order, the Competition Commission noticed that Google was found in violation of the provisions of the Competition Act 2002 in the following:
- “For app developers, access to the play store, depending on the compulsory use of GPBS (Google Play Billing System) for purchasing apps and in-apps, the app imposes a improper (status) on developers.”
- “Google is followed by discriminatory practices by not using GPBS for its own applications, ie youtube. It is also not paying the YouTube service fee as the GPBS requirements are not paying the discriminatory practices. Along with implementing discriminatory conditions as well as pricing.”
- “The compulsory implemented innovation of GPBS, to encourage innovation and both payment processors as well as app developers' capacity to technical development and innovation and thus, bothers the tentmount to limit technological development in the market for in-app payment processing services.”
- “Due to compulsory implementation of GPBS by Google, there is also a denial of reaching the market for the app developers with payment aggregators.”
- “Downstream is the result of practices by Google to take advantage of their dominance in the market for licensed mobile OS and app store to protect their position in markets.”
- “Different functioning used by Google to integrate its own UPI app with the Play Store to one-E-Visi other rival UPI app.”
- “The Commission considers Google to be prominent in the first two relevant markets, IE, market for licensed OS for smart mobile equipment in India and market for app store for Android Smart Mobile OS in India. In addition, Google has also misused its main position.”
Google Instructions: Behavior Treatment
- Prohibition on blocking third party billing Google will not allow the app developers using any third party billing / payment processing services, and will either restrict in-app purchases or to buy the app. Google will not take any adverse measures against such apps using third -party billing/ payment processing services in any way or otherwise no adverse measures will be taken.
- Prohibition on anti-stering provisions The Google app will not make any anti-stering provision on developers and will not ban them from communicating with their users to promote their apps and offerings in any way.
- App prohibition on the control of app users The Google app will not restrict the last users in any way, to reach and use the apps, features and services offered by the developers.
- Transparency in data policy Google will determine a clear and transparent policy on the data collected on its platform, the use of such data by the platform and the potential and real sharing of such data along with app developers or other institutions including related institutions.
- No benefit of transaction data Competitive relevant transactions/ consumer data of apps generated through GPBS/ consumer data will not be benefited by Google to further its competitive advantage. Google will also provide access to the app developer of data generated through the respective app, subject to adequate safety measures, highlighted in this order.
- No unfair situation on app developers The Google app will not apply any position (including value related status) on developers, which is inappropriate, inappropriate, discriminatory or ratioless for services provided to the app developers.
- Publish payment policy The Google app will ensure complete transparency in communicating for developers, services provided, and corresponding fees. Google will also publish the criteria for the payment policy and the prevention of fees in a vague manner.
- No discrimination to get out of Google UPI Google will not discriminate against other apps that facilitate payment through UPI in India, which in any way looks at its own UPI app. ,
Commission comments and counters for goggles appeal
“Why no GPBS not on your own YouTube?”
“It has also been found during the investigation that Google is following discriminatory practices by not using GPBS for its own applications, YouTube. Therefore, Google, along with the discovery of DG, has said with the commission that the Act has imposed unfair and discriminatory circumstances in violations. The need,” the commission noted.
“Google should be the main market for the market for licensing OS for smart mobile devices in India and app stores for Android Smart Mobile in India. Google charge service fee which increases up to 30% revenue in some cases which is unfair and discriminatory. Google is also adopting discriminatory practices.”
“Google is only paying a fee of 2.35% for the payment processor in relation to its app 'YouTube', while it imposes 15 to 30% service fee on other apps. Results resulted in a competitive loss to Google's competitor by increasing their cost as a result of discriminatory practices.”
“People who do not use GBPS cannot list their apps on the play store”
The Commission said that Google has made it mandatory and exclusive to use GPBS for processing payment for apps and in-app purchases. If the app developers do not comply with Google's demand to use GPB, they are not allowed to list their apps on the play store and thus, will lose the huge pool of potential customers as Android users. In addition, access to the compulsory use of GPBS for paid apps and in-app purchases, access to the play store “is” one-sided and free from arbitrary and any legitimate business interest. ” App developers are left before the underlying option to use the payment processor of their choice from the open market. The Commission admitted that Google's conduct app implements inappropriate condition on developers.
Compulsory GPBS limits innovation, competition, costs cost
“GPBS essentially limits innovation in the market. Evidence before DG was kept before DG by other market players, for the effect that charging of 15 to 30% of excessive service fee is a cascading effect. The developer has a cascading effect. Increased cost to release a low amount for research to improve the quality of the application by the developer.
Google's data collection policy suggests that “it” has access to the category of “significant volume and app users' granular data, including complete individual as well as financial transactions. By controlling data, Google is in a position to place its rivals in a dissatisfied position in the downstream market. Google has improperly provided long settlement period which is ending through compulsory GPBS. ,
“Conversely, the industry practice of paying in 2-3 days, Google provides itself a route in which the payment is issued after a gap of 15 to 46 days from the day of payment transactions, these app developers are particularly inappropriate for small app developers. If the app developers will have the freedom to choose their choice, they will be able to receive payments in a short time.
“Non-up and UPI mode are not the same market”
“To submit the appellant that other digital payments like wallets, debit cards, credit cards, net banking are replaceable with payment through UPI app. Transfer through replacement and net banking between payment through UPI.
“CCI cannot wait for real loss to competition”
While dismissing the Google dispute that no damage was visible, on which such an order could be passed, the Commission said that “the Commission would always have to wait for the actual damage to the market deformation and the loss of the consumer and prevent the consumer from protecting before such damage.” “… A overall reading of the Competition Act 2002 shows that it aims not only to combat the evils of pre-exploited losses that have already happened, but also to prevent the possibility of causing such competitive losses.”
