Google will be probed by India’s Competition Commission for allegedly ‘abusing dominance’ to push its payments app

Google will be probed by India’s Competition Commission for allegedly ‘abusing dominance’ to push its payments app
BI India
  • Google will be probed by India’s antitrust regulator for alleged use of dominance for its own payments app – Google Pay.
  • For the investigation, the CCI has directed the Director General to conduct the probe and submit the report within 60 days of the order.
  • The investigation will look into two things - Google’s exclusive use of Google Pay (GPay) for payments in the Play Store for buying apps or other in-app purchases (IAPs) as well as the pre-installation and prominence of Google Pay on Android smartphones.
Google will now be probed by the Competition Commission of India for alleged use of dominance for its own payments app – Google Pay. The action is being taken on an anonymous complaint from February.

According to the CCI order, there were six allegations made in the complaint against Google, out of which four have been rejected by the CCI and two aspects will be investigated – Google’s exclusive use of its payments app Google Pay (GPay) for transactions in the Play Store for buying apps or other in-app purchases as well as the pre-installation and prominence of Google Pay on Android smartphones.

For the investigation, the CCI has directed the Director General to conduct the probe and submit the report within 60 days of the order. Google Pay today holds almost 40% market share in the UPI transactions, coming second to PhonePe only recently.

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Google is pitted against very angry peers like Paytm

Google has been under fire in India after it said it was rolling out new payment policies where developers would have to pay a 30% tax on all in-app purchases and even included entertainment, education, dating, and fitness apps in the list. However, the decision was postponed after an uproar by Indian developers.

Google has denied the charge misusing Google Play to push its own app. It has insisted that it is not the only app distribution option on Android phones. “Users choose Google Play because we ensure a safe, secure, and seamless experience. Play's billing system is a fundamental part of meeting this user expectation and helps ensure our continued investment in the many important things needed to make developers successful,” said the spokesperson.

The tech giant had also picked a fight with Paytm which began with Paytm being removed for a few hours from the Play Store. Google had said that Paytm violated rules regarding fantasy gaming promotions. “We are confident that the CCI will find that GPay operates in an extremely competitive environment, and owes its success to its ability to offer consumers a simple and secure payments experience,” the Google spokesperson said.
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Pressure is piling up on Google

The probe on Google Pay comes just days after it has a new competition in the market – WhatsApp Pay. Facebook’s WhatsApp Pay has received the approval to roll its UPI payments with a limitation of 20 million users. Meanwhile, Google Pay and PhonePe both of which are market leaders for UPI transactions will see a cap of 30% of the total transactions. However, this cap will be applicable from 2022.

This is not the first antitrust probe against Google, it has been under the scanner three times before.

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  • Recently, the tech giant was under the CCI’s lens for its dominance in the smart TV market in India. The investigation is currently underway.
  • In 2019, a probe was initiated against Google for use of its power for its Android system and reducing the ability of smartphone makers to choose any other operating system. This continues to be an ongoing case.
  • Earlier than that, in 2018, Google was fined over $21 million for its search bias.“Google was leveraging its dominance in the market for online general web search, to strengthen its position in the market for online syndicate search services,” the CCI had said then.
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