A google is a deceptive delivery in cricket where the ball spins in the opposite direction to a traditional leg-spin delivery. Google’s stance on charging a significant portion of its business to apps on its store puts digital companies and governments in the same position as the battering ram facing Google.
A google is a deceptive delivery in cricket where the ball spins in the opposite direction to a traditional leg-spin delivery. Google’s stance on charging a significant portion of its business to apps on its store puts digital companies and governments in the same position as the battering ram facing Google.
The issue began when Google charged digital companies 30% of the revenue (not profits) they earned through apps hosted on the Google Play Store. According to Gitnux.org, the Google Play Store has almost 75% market share of mobile app stores, with the majority of the rest controlled by the Apple App Store. So there’s clearly a monopoly play going on, especially in the area of his Android handsets.
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This situation is difficult for the healthy growth of India’s domestic digital industry. As such, digital companies are taking Google to the Competition Commission of India (CCI ).
GPBS was also mandated by Google for other purchases in the Play Store, such as audio, video, and games, as well as certain in-app purchases. Google Play Store terms also prohibit app developers from providing users with links from their apps to webpages that enable payments using non-Google payment gateways.
Google Play Store’s 30% charge is 15 times the usual 2% charge for such payment services. Indeed, Google Play Store offers a lot more than just payment services. It also hosts apps and helps you find apps.
But are the additional services worth such high fees? Why shouldn’t we leave pricing to a market economy? Unfortunately, market economies fail under monopoly conditions.
Accordingly, the CCI issued non-monetary instructions to Google. The instructions included requiring Google to allow and not restrict app developers from using third-party billing and payment processing services for either in-app purchases or in-app purchases.
Additionally, Google should not impose any anti-steering provisions on app developers or restrict them from communicating with users in any way to promote their apps or services. Google may not restrict in any way end users’ ability to access and use within their apps any features or services provided by app developers.
Google may not impose terms (including price-related terms) on App Developers that are unfair, unreasonable, discriminatory, or disproportionate to the services provided to App Developers.
The CCI also directed Google not to discriminate in any way against other apps that facilitate payments through UPI in India compared to its own UPI app. The CCI also imposed the following financial penalties: INRIt issued a cease and desist order that cost Google 1.34 billion in profits and eliminated its monopolistic practices.
India is not the only country where Google’s Play Store faces accusations of monopolistic practices. Last December, Google’s Play Store and billing services were indicted in a US District Court for illegal monopolization. Google was fined $700 million. Europe also imposed large fines on Google for anti-competitive behavior.
Google challenged the directive from India’s CCI and took the case all the way to the Supreme Court, arguing that the CCI exceeded its jurisdiction and violated the Competition Act, 2002.
The case is still before the Supreme Court, but this week Google unilaterally decided to remove a number of popular Indian apps from its store, accusing it of not paying Google for the apps. The situation reached its climax. It has been reduced to less than 15% of revenue.
However, it is widely believed that this is a usurious charge as 15% of the revenue will destroy the company’s business model. The impact on India would be even more severe as such a move would deprive Indians of access to various digital tools.
The issue becomes even more difficult for the government as taking any action against Google Play Store would actually harm India’s digital ecosystem. If the Google Play Store were to go down today, billions of dollars worth of economic activity would be shut down. Therefore, it will actually challenge the sovereignty of the state on matters of the digital economy.
Thanks to the government’s deft response and the intervention of IT Minister Ashwini Vaishnaw, Google has reversed its policy of removing Indian apps from its digital store.
Unfortunately, this is not the end of the battle. With no visible competition to Google Play Store, this battle between digital monopolies and India’s rapidly emerging digital ecosystem is likely to continue. Perhaps it is time to accelerate the adoption of the government app store, Mseva, and other Indian app stores so that India continues to grow its digital economy in line with the government’s vision.
Jaijit Bhattacharya is Director of the Center for Digital Economy Policy Research.
