Daily Management Review

Probe Against Google’s Payments App Ordered By Indian Antitrust Regulators


Probe Against Google’s Payments App Ordered By Indian Antitrust Regulators
An investigation against the United States based search engine giant Google has been ordered by the Competition Commission of India (CCI) over allegations that the company was using its dominant market position to promote its digital payment service Google Pay while trying to supress rival apps.
In May, the CCI had ruled against Google over the anti-competitive promotion of its payments app which was the first indication that there could be an antitrust case against the company.
However the current investigation goes beyond Google Pay. A number of enquiries have been made by the antitrust watchdog against a number of business practices of the company which include the in-app purchase system of Google Play, incidents and allegations of market abuse, and the “take it or leave it” condition that it implements for those developers who want to operate inside the Play Store ecosystem on Android devices in India.
The control that Google has over the Play Store and Android Operating System (OS) is being used by the company to unduly favour Google Pay over other rival apps which has put the competing digital payment apps in a disadvantageous position in facilitating payment through UPI as well as for the users of the UPI based payment system, claimed reports quoting sources with knowledge of the matter.
According to the media reports, this business policy of Google essentially amounts to abuse of its dominant position in the market which violates the various provisions of Section 4 of the Act.
In addition to highlighting the importance of Play Store in the overall Android architecture, a detailed background of the Android ecosystem with regard to smart mobile devices has been provided to the antitrust regulators by an informant, the CCI order said.
Various provisions of Section 4 of the Antitrust Act have been violated by the 'Opposite Parties' -- Google, Alphabet Inc, according to the prima facie view of the regulators, the CCI said. It added that this prima facie evidence of violation also required the regulator to undertake a detailed investigation.
"In view of the foregoing, the Commission directs the Director-General ('DG') to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act. The Commission also directs the DG to complete the investigation and submit the investigation report within a period of 60 days from the date of receipt of this order," the CCI said.
Google does not favour the GPay app (Tez) in Play's search rankings, Google and its parent company Alphabet Inc. said in response to the allegations, and added that these allegations are "wholly misconceived".
"Google ranks search results in Play based on multiple criteria which do not favour the GPay app (Tez). Further, Google has every commercial incentive to ensure that its search rankings in Play provide users with high quality, relevant apps that are responsive to the user's query," they said in their reply.