India orders Google to allow 3rd party payments

The Competition Commission of India (CCI), the country's antitrust body, said on Tuesday that Google should not restrict app developers from using third-party billing or payment processing services in India.

It also fined the US tech giant $113 million for anti-competitive practices, Reuters reported.

The watchdog has ordered the firm to allow app developers to use third-party payments processing services for in-app purchases or for purchasing apps.

The CCI has accused Google of misusing its dominant position in regard to Play Store policy and has called out the tech giant for unfair commercial practices. 

In its 199-page order, CCI said Google should ensure complete transparency in communicating with app developers and details about service fees charged while asking it to adopt 8 remedies or operations adjustments within three months, including not restricting "app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps.

Earlier on Thursday (20 October), Google was fined another $162 million by the watchdog for anti-competitive practices related to its Android operating system and was asked to change its approach to its Android platform.

Traditionally app stores are required for developers to distribute their apps to end users. additionally, the availability of app stores is directly related to the operation system (OS) present on a smart device. 

Google's Android OS had been profiting off of the benefits of indirect network effects. 

According to the CCI, Google's play store enables its owners to profit from the apps released to the market. 

Google's Play store policies, app developers have to use Google Play's Billing system (GPBS) to be able to accept payments for app distribution and in-app purchases. 

CCI, which opened the probe into Google in late 2020, said mandating developers to use Google's own billing system for paid apps and in-app purchases through Play Store "constitutes an imposition of unfair condition" and thus violates provisions of the nation's Section 4(2)(a)(i) of the Act.

The regulator — which interviewed several industry players, including Paytm, Zomato, Info Edge, Samsung, Vivo, Xiaomi, Microsoft, and Realme as part of the investigation — said that Google not using its billing system for its own apps such as YouTube amounts to "imposition of discriminatory conditions."

A Google spokesperson told Reuters, "By keeping costs low, our model has powered India's digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate the next steps."

The US giant can appeal the orders in an Indian tribunal.