Google faces antitrust investigation in India over Google Pay

Indian competition authorities are investigating Google over complaints it has abused its market power.

The Competition Commission of India (CCI), the country's antitrust watchdog, is looking into charges that Google gained an unfair advantage in payment services.

It is said to have taken advantage of the Play Store's dominant position in the app ecosystem to promote its Google Pay service on Android smartphones.

The CCI's investigation, which will last 60 days, comes after a complaint "pointed out similarities between the conducts of Apple in Europe and Google in India."

Google is accused of forcing app developers to use the Play Store's payment system and in-app billing when they charge customers.

The "informant," as described but not identified by the CCI, also complained that Google charges app developers a 30% commission for use of those systems.

Earlier this year, Google made the news after coming into conflict with India's start-up community over commission fees. The backlash forced it to postpone the introduction of new billing rules until April 2022.

In the latest case, the CCI's informant also says Google "unfairly" distorts the Play Store's search results in favor of its own apps. However, CCI is not investigating this claim due to a lack of evidence.

Google is facing similar issues in other countries, including the US. Recently, the US Antitrust Subcommittee found that Google, Amazon, Apple and Facebook had all abused their market dominance. The US Department of Justice has also initiated antitrust proceedings against Google.

In India, it already faces two separate antitrust investigations regarding alleged abuses in the smart TV and mobile markets.

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The CCI said it decided to go for an in-depth investigation in the latest instance after an initial review found the "imposition of Google Pay unfair and discriminatory." The result, it said, was "denial of market access for competing apps of Google Pay and leveraging on the part of Google."

Google has responded by insisting Android "is not dominant in India" and arguing that its operating system (OS) faces "significant competition from licensable and non-licensable OSs."

It goes on to say that its 30% commission is "not arbitrary. It is market based, legitimate, and pro-competitive as the service fee allows Google to cover third-party fees and support its significant and continued investments in Play, including the vast resources it develops for developers."

If the complaints are upheld, Google's practices could be in violation of Section 4 of India's Competition Act 2002.

Android OS is used in more than 90% of all smartphones in the country, while its Google Pay app is one of the most popular payment services in the country.

— Gagandeep Kaur, contributing editor, special to Light Reading

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