Google Fined $114m In India Over In-App Payment Restrictions

October 28, 2022
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The Competition Commission of India has imposed an INR936.44 crore ($114m) fine on Google after finding that the tech giant unlawfully restricted in-app payments.

The Competition Commission of India (CCI) has imposed an INR936.44 crore ($114m) fine on Google after finding that the tech giant unlawfully restricted in-app payments.

According to the antitrust watchdog, Google abused its dominant position by obliging developers to direct every in-app purchase through Google’s payment system

Restrictions in Google’s Play Store policies were exclusive and mandatory not only for receiving payments for apps sold through the Play Store but also for certain in-app purchases after users downloaded the app.

In addition, the CCI investigated allegations that Google excluded rival payment apps on Play Store.

Google Pay is the second most popular app used on India’s Unified Payments Interface (UPI). In September 2022, 34 percent of all UPI transactions (2,296m) were carried out through Google Pay.

The agency concluded that the technology giant used different methodologies to integrate its own UPI app on to mobile devices than what it allowed for rival UPI apps.

Specifically, the agency found that Google integrated Google Pay with “intent flow methodology”, which provides a better and more user-friendly experience, while other UPI apps used a “collect flow methodology”.

Intent flow offers significant advantages to both customers and merchants, and its success rate is higher due to lower latency, the CCI noted.

The agency ordered Google to stop the anti-competitive practices and pay INR936.44 crore penalty, which is equivalent to 7 percent of the bigtech’s average relevant turnover.

Pressure heating up against in-app payment restrictions

The massive fine comes as Google is facing investigations over payment app restrictions in a number of countries across the world.

In September, Indonesia opened an investigation into Google’s potentially unfair monopolistic in-app payments policy.

In the EU, the bloc’s upcoming Digital Markets Act is expected to address certain concerns about bigtechs, including in-app payment policies that are deemed unfair or anti-competitive.

In preparation for the legislation, Google announced in July that it had made changes to its in-app payment policy to support billing alternatives for EEA users.

This will mean developers of non-gaming apps can offer their users in the EEA an alternative to Google Play's billing system when they are paying for digital content and services.

Google is also subject to a lawsuit by Match Group in California over its actions allegedly aimed at creating an in-app payments monopoly and is also facing a new lawsuit in South Korea.

In a news conference on Tuesday (October 25), the Korean Publishers Association said it brought Google to court over its in-app payment policy, local press reported.

South Korea was the first country in the world to pass legislation that mandates the ability to use alternative payment processing in in-app purchases.

Following the legislation, Google said it would open up Android apps to alternative billing systems, but the association says Google still forces local publishers to use its in-app billing system and charge 30 percent commission fees on every purchase via Google Play.

The association now says Google unlawfully forced local publishers to use its in-app billing system and charge 30 percent commission fees on every purchase via Google Play.

Earlier in April, the publishers’ group filed a complaint denouncing the same practices to the Korea Communications Commission (KCC), which is currently looking at the issue.

The publishers are not the only ones that are discontent with Google’s policy. KakaoTalk, South Korea’s most popular messaging app, also had a spat with the tech giant in July, as reported by VIXIO.

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