Startup body moves CCI seeking interim relief from Google Play’s commissions

The Alliance of Digital India Foundation, on Monday, moved India’s competition watchdog seeking interim relief from Google’s policy on collecting commission on payments made on apps on its play store, until an ongoing antitrust investigation into the big tech giant is complete. 

The ADIF is a Delhi-based think tank that has membership from India’s startups and entrepreneurs. 

Google had postponed implementing its payments policy, where it will collect a 30% commission from developers for all in-app purchases, to March next year following pressure from prominent Indian internet entrepreneurs including the likes of Paytm’s Vijay Shekhar Sharma and BharatMatrimony’s Murugavel Janakiraman who spoke to the IT Ministry about the issue.

“Google’s new policy will restrict certain categories of apps to use only Google Billing System (GBS) for accepting payments. This would be an issue for app developers because GBS charges 30% commission for all transactions on the Google Play Store, compared to 2% charged by other payment processing systems,” the ADIF said in a statement. 

If this policy comes into effect, said ADIF, it would have a “destructive effect on the operating margins of a large number of startups and make their business models infeasible”. 

Google declined to comment.

The ADIF’s petition comes just weeks after the investigative arm of the Competition Commission of India had found Google guilty of adopting anti-competitive and restrictive practices in the Android operating system market. These revelations came to light in a leaked report, over which Google had also moved the Delhi High Court citing breach of privilege. 

The CCI had in November 2020 directed a probe by the Director-General into the issue of mandatory use of Google Play Store’s payment system for paid apps & in-app purchases. The commission is of the prima facie view that such a policy is unfair as it restricts the ability of app developers to select a payment processing system of their choice.

Indian app developers are also strengthened by global legislations like a South Korean which set a global precedent by passing legislation that forces Google and Apple to open their app stores to alternative payment systems.