UPDATE: Google India Will Open Up In-App Payments Market, But Its Appeal Goes On

January 30, 2023
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Google India has informed the country’s competition watchdog that it will make changes to its in-app payments policies as instructed, but will continue to appeal against other regulatory directives.

Google India has informed the country’s competition watchdog that it will make changes to its in-app payments policies as instructed, but will continue to appeal against other regulatory directives.

In a company blog post published last week, Google said it will introduce several major changes to Android and Google Play in the Indian market.

For payments firms, the biggest change will be the introduction of user choice billing for all apps and games, starting from next month.

Once implemented, user choice billing will allow Android app developers to offer users the option to choose an alternative billing system alongside Google Play’s billing system when purchasing in-app digital content.

Previously, Google’s exclusion of alternative billing systems was the reason for the ₹9.36bn ($113m) fine handed to it by the Competition Commission of India (CCI) in October last year.

Separately, the CCI is also pursuing a wider antitrust case against Google for its bundling of its own products and services on Android devices.

However, in line with CCI directives, Google has said it will allow original equipment manufacturers (OEMs) to license individual Google apps for pre-installation on their devices.

Similarly, Indian users will now have the option to choose their default search engine via a choice screen that will soon start to appear when a user sets up a new Android smartphone or tablet.

Google will also allow “side-loaded” apps, i.e. those downloaded from a developer’s website, rather than Google Play, to update automatically.

As noted by Google, the company has informed the CCI that it will implement these changes, but it intends to appeal other elements of the CCI’s directives against it.

Original Story: Indian Court Tells Google To Pay 10 Percent Fine Deposit For Appeal To Be Heard (January 9, 2023)

Last week, India’s National Company Law Appellate Tribunal (NCLAT) responded to a request by Google to postpone the deadline for payment of two fines for abuse of a dominant position, due to the technology firm’s intention to appeal both rulings.

Although the NCLAT denied Google’s motion to postpone, it admitted Google’s motion to appeal, but only on the condition that the tech giant pays 10 percent of the fines.

In October last year, as reported by VIXIO, Google was ordered to pay ₹9.4bn ($114m) by the Competition Commission of India (CCI) for excluding third parties from both app store and in-app payments.

In the same month, the CCI also ordered Google to pay ₹13.8bn ($167m) for favouring its own proprietary applications, such as Play Store, Google Search, Google Chrome and YouTube, on Android devices.

As is standard, Google was given 60 days to pay the two penalty fees, which were issued five days apart respectively. On the day of the first deadline, Google submitted its appeal against both rulings to the NCLAT.

Responding to Google’s request for postponement of the two fine payments, the NCLAT remarked that Google had shown “no such urgency” to submit its appeal.

The NCLAT added that Google’s slow-walking of its response is also the reason for the “short” timeframe it has been given to prepare for the “final hearing” of the appeal.

Subject to payment of the 10 percent within the next three weeks, the final hearing will take place on April 3, 2023.

'Copy-paste' claims

Google has also said it intends to appeal the two rulings based on accusations that the CCI has “plagiarised” parts of its case from similar lawsuits brought by the European Commission.

In a court filing shared with Reuters, which has not yet been made public, Google said it has found more than 50 instances of “copy-pasting” from the European Commission, some of which was used “word-for-word” by the CCI.

Google believes that the CCI is attempting to use evidence against it that was deployed by the commission, but which has not been examined in India.

Dino Kandiloros, legal associate at Outlier Ventures, a UK-based Web3 accelerator, told VIXIO that Google's accusations of plagiarism "must" be taken seriously.

"Judicial or regulatory plagiarism, in which a judge or regulator copies significant portions of a delivered judgment into their own ruling without proper attribution, can raise questions about the legal reasoning and its relevance to the specific case," he said.

"If Google's claims are true, the Appellate Tribunal may decide not to uphold the CCI's order."

Between 2017 and 2019, Google was fined more than €8bn by the European Commission for three major antitrust violations related to its search engine, pre-installed apps on Android devices and “abusive” online advertising practices.

The charges in the first two cases overlap with one of the CCI’s rulings against Google, but the third case is unrelated. Moreover, the commission had not accused Google of anti-competitive practices due to its app store or in-app payments policies.

Google had submitted numerous appeals against all three rulings by the European Commission. In September last year, Google lost an appeal against the largest fine, but managed to have it reduced by 5 percent.

In 2021, the tech giant lost an appeal against the EU for abuse of its Google Shopping search and comparison tool.

This year, Google expects to hear a decision on its appeal against the EU’s abuse of online advertising complaint.

India follows EU lead on tackling monopolies

According to the CCI, Google has placed unlawful restrictions on competition by requiring that Android app developers route all app purchases and in-app purchases through Google’s own billing system.

“Making access to the Play Store dependent on mandatory usage of Google Play Billing System for paid apps and in-app purchases is one-sided and arbitrary and devoid of any legitimate business interest,” said the CCI.

“The app developers are left bereft of the inherent choice to use payment processors of their liking from the open market.”

In addition to the penalty fine, the CCI has ordered Google to cease and desist from the anti-competitive practices described in its complaint.

“Google shall allow and not restrict app developers from using any third-party billing or payment processing services, either for in-app purchases or for purchasing apps,” said the CCI.

“Google shall also not discriminate or otherwise take any adverse measures against such apps using third-party billing or payment processing services, in any manner.”

Additionally, the CCI ruled that Google's licensing of its Play Store "shall not be linked with the requirement of pre-installing" Google Search services, the Chrome browser, YouTube or other Google applications.

According to data cited by the CCI, in 2020 Android had a 95 percent share of the smartphone operating system market in India, with its closest rival, Apple’s iOS, coming in at 3 percent.

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