Introduction
The Android Smart phones occupy a large market in India. Google’s Play Store constitutes the main distribution channel for app developers in the Android mobile ecosystem, which allows its owners to capitalize on the apps brought to market. For app developers, app stores have become a necessary medium for distribution of their apps to the end users and the availability of app store(s) is directly dependent on OS installed on a smart device. The US tech-gaint Google, thus, exercises a dominant position over this market by providing a platform for app downloads of various companies and start-ups on Google Play store[i].
According, to the Google Play Billing System (GPBS) and Google’s payment policies for android phones, the companies are obligated to pay a fees ranging from 11% to 30% depending upon their revenue for the access of in-app features and digital services. The developers under the policy have to pay Google 15% service fee for the first $1 million revenue earned by them and 30% of over $1million. The regulation of internet which, decades ago, was governed by the legislations of the Government is now being determined by the tech giants Apple and Google.
The payment of service charge for using the platform was never an issue for the developers, but the amount levied to avail the services rendered expensive and burdensome for the Indian market.
Events leading to removal of Apps from Google Play Store
On March 1st morning, Google announced that it would remove the apps of over a dozen companies from its marketplace for android phones that are non-complaint with its payment policy. Following this, Google delisted at least 23 apps from nine Indian developers from its Play Store. These include all thirteen apps from Matrimony.com – such as Bharat Matrimony, Kerala Matrimony and Jodi; three apps from InfoEdge – Naukri.com, Naukri Recruiter and 99 Acres; People’s Interactive’s Shaadi.com; Alt Balaji’s streaming service ALTT, and streaming services aha and stage. This affected around 95% of Indian Smart Phones market as the users were unable to search and download the apps from Google Play Store.
This action transpired when the Supreme Court declined to restrain Google from removing apps from its Play Store if they don’t comply with its billing policy.
Google, however, reinstated dozens of apps in spirit of cooperation that were de listed by the company on March 1 for resisting the firm’s platform fees on in app payments.
CCI’s anti-trust battle against Google
CCI imposes a monetary penalty of Rs. 1337.76 Crore on Google for anti-competitive practices in relation to Android mobile devices.
The antitrust watchdog had on October 20 imposed a penalty of Rs 1,337.76 Crore on Google for abusing its dominant position in multiple markets with its Android mobile operating system (OS), and prescribed a set of about a dozen key measures that the company has to comply with.
It directed Google to refrain from participating in anti-competitive practices that were found to be in contravention of the provisions of the Competition Act, 2002 and modify its conduct within a defined deadline. Google however paid the entire penalty amount of Rs 1,337.76 Crore imposed by CCI in the Android case after contesting it before different forums.
CCI imposes a monetary penalty of Rs. 936.44 crore on Google for anti-competitive practices in relation to its Play Store policies
This is the second ongoing case against the tech giant by the CCI. India’s anti-trust regulator, the Competition Commission of India (CCI), on October 25, 2023 imposed a penalty of Rs 936.44 crore on Google for abusing its dominant position with respect to its Play Store policies. The commission has also issued a cease-and-desist order in which the regulator prescribed eight corrective measures that Google Play needs to implement to correct the anti-competitive practices[ii].
Legal battle over the Google Play Billing System
Post the CCI order, Google expanded its User Choice Billing (UCB) policy to all developers in India and updated its UCB policy. Accordingly, Google started allowing the developers in India to offer alternative billing systems. Developers choosing to do so had their service to Google reduced by 4%.
To comply with the policy, Google has given developers three options: opt for GPBS, have an alternative billing system, or operate on a consumption-only basis without paying a service fee. But app developers in India are not satisfied for two main reasons- first, despite opting for an alternative billing system, they were still obligated to pay Google an 11% or a 26% fee, which they say is unfair, and second, this, they argue, violates, the CCT’s order. the service fee charged was as high as 26% (just 4 percentage points drop from its earlier policy).
Eventually, 14 companies, including those whose apps were delisted, challenged Google Play Billing System (GPBS) in Madras High Court Two additional lawsuits by Disney+ Hotstar and Test Book followed. The Madras HC granted interim protection to all of them, but 12 of the original 14 companies filed a special leave petition in the Supreme Court. On February 9, the apex court did not grant these 14 companies protection from getting delisted but Disney+ Hotstar and Test Book’s protection continued[iii].
Conclusion
Google’s dominance in the smart phone apps market in India and its control over the online search market has been the issue of tussle. The decisions serves as a reminder to tech giants that market dominance comes with a responsibility to operate fairly and to avoid engaging in anti-competitive practices that restrict competition and harm consumers. As the technology industry continues to evolve, it will be essential for companies to operate in a manner that fosters fair competition, innovation, and consumer protection. The Billing Policy of Google is a long-standing issue. It is high time the Government intervenes and make regulations and administer the dominant players in the market.
[i] https://pib.gov.in/PressReleasePage.aspx?PRID=1870819
[ii] https://legal.economictimes.indiatimes.com/news/litigation/googles-appeal-against-ccis-rs-936-cr-penalty-delayed-by-nclat/105518431#:~:text=On%20January%2011%2C%20the%20tribunal,it%20later%20withdrew%20the%20case.
[iii]https://www.thehindubusinessline.com/info-tech/google-moves-a-motion-before-madras-hc-seeking-dismissal-of-disneys-suit/article67202541.ece
