The Competition Commission of India recently ordered an investigation into Alphabet Inc’s Google regarding its in-app billing system. The probe comes after numerous Indian startups accused Google of implementing its policies in a discriminatory manner. These startups have been in a prolonged dispute with Google over the fees it charges for in-app payments.
Escalation of Dispute
The conflict between Google and the Indian startups reached new heights when Google removed over 100 Indian apps from its app store for billing-related violations. However, after the Indian government intervened, Google reinstated these apps. This move further fueled the tension between the two parties, leading to the startups seeking intervention from the CCI.
Investigation Initiated
In response to the startups’ plea, the CCI has directed its investigation unit to complete a thorough probe within 60 days. The regulatory body explicitly stated that Google’s policies were being implemented in a discriminatory manner, prompting the need for a detailed examination of the matter. Google, on the other hand, has assured cooperation with the investigation process while maintaining innocence regarding any wrongdoing.
At the core of the controversy lies Google’s imposition of a fee ranging from 11% to 26% on in-app payments by Indian startups. This move has not been well-received by the startups, especially in light of the antitrust authorities’ directive to dismantle a similar fee structure by 2022. Google, however, justifies these charges as essential for supporting investments in its Google Play app store and the Android mobile operating system.
The ongoing investigation by the CCI stems from previous complaints by startups alleging that Google had failed to comply with earlier antitrust directives. These directives were aimed at preventing Google from taking adverse actions against companies utilizing alternate billing systems. The antitrust body has dedicated significant time and resources to assess the validity of these claims against Google.
The antitrust probe initiated by the CCI against Google underscores the escalating tensions between the tech giant and Indian startups over in-app billing practices. The outcome of this investigation will not only impact the relationship between Google and these startups but also set a precedent for how antitrust issues are addressed in the digital market.
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