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India Slaps Another Penalty of Over Rs 936cr on Google

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The Competition Commission of India, India’s fair trade regulator, announced to impose of yet another penalty of Rs 936.44 crore on Google, the second time in a week, for allegedly misusing its dominant position regarding Play Store policy and ordered the tech giant to quit engaging in unfair commercial practices. This took the monetary fine imposed on Google to a total Rs. 2,274 core. The article is about India Slaps Another Penalty of Over Rs 936cr on Google.

The US tech company was discovered guilty of abusing its market position to advertise its payments App and in-app payment system in an antitrust probe this month, according to the CCI on October 25, 2022. For app developers, app stores have become an essential medium for the distribution of their apps to the end users, and the availability of app stores is directly dependent on OS installed on a smart device, the CCI said in a statement.

“An appreciation of the market dynamics in licensable mobile operating systems in India makes it proof that Google’s Android OS has reaped the indirect network effects. Google’s Play Store constitutes the primary distribution channel for app developers in the Android mobile ecosystem, which allows its owners to capitalize on the apps brought to market,” said the CCI statement.

“Based on its assessment, the CCI found Google to be dominant in the markets for licensable OS for smart mobile devices and market for app stores for Android smart mobile OS, in India,” it added.

It said Google’s Play Store policies require the App developers to exclusively and mandatorily use Google Play’s Billing System (GPBS). It is not only for receiving payments for Apps and other digital products like audio, video, and games distributed through the Google Play Store but also for certain in-app purchases made by users of Apps after they have purchased the App from the Play Store.

“If the app developers do not comply with Google’s policy of using GPBS, they are not permitted to list their apps on the Play Store and thus, would lose out the vast pool of potential customers in the form of Android users,” the CCI said.

“Making access to the Play Store dependent on mandatory usage of GPBS for paid apps and in-app purchases is one-sided, arbitrary, and devoid of any legitimate business interest. The app developers are left bereft of the inherent choice to use payment processor of their liking from the open market,” the Indian fair-trade regulator said.

“Based on its assessment, the CCI concluded that accessing the Play Store, for app developers, dependent on mandatory usage of GPBS for paid apps and in-app purchases, constitutes an unfair condition on app developers. Thus, Google is found to violate the provisions of Section 4(2)(a)(i) of the Act,” according to the statement.

“Google is following discriminatory practices by not using GPBS for its applications, i.e., YouTube. This also amounts to the imposition of discriminatory conditions and pricing, as YouTube is not paying the service fee imposed on other apps covered in the GPBS requirements. Thus, Google is found to violate Section 4(2)(a)(i) and 4(2)(a)(ii) of the Act.”

The practices followed by Google resulted in leveraging its dominance in the market for licensable mobile OS and app stores for Android OS in protecting its position in the downstream markets, the statement added.

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