The Competition Commission of India (CCI) has recently announced it would be carrying out an investigation into allegations of abuse of a dominant position by Google. The tech giant is accused of using its market power to push the usage of its payments app, Google Pay, leaving other mobile wallets and UPI apps on the sideline.
Google’s Controversial Policies
The CCI pointed out two main anti-market practices in use by Google. The first is Google’s policy of mandatory use of Google Play’s payment system for purchasing apps and making in-app purchases (IAPs). This means that users are limited to using only Google’s proprietary system for transactions on the Play Store.
The second accusation revolves around Google’s exclusionary practices; the tech company has excluded other mobile wallets/UPI apps as effective payment options in Google Play’s payment system. In effect, this forces users into using Google Pay, further strengthening its market position.
Criticisms of Google’s 30% Commission Policy
Google has also come under fire for charging a 30% commission for all app and in-app purchases. Considering the play store accounts for about 90% of all downloads, a significant number of payments in the market stand to be controlled by the company.
This could have a range of implications, including potentially leading to increased subscription fees as developers attempt to offset the costs of Google’s commission, thus affecting user experience, cost, and choice.
Reports of Android-Television Market Abuse
Other concerns raised by the CCI include reports that Google has been abusing its dominant market position within the Android-television market. This involves creating barriers for companies that want to use or modify its Android operating systems for their smart televisions.
Past Antitrust Challenges & International Scrutiny
This probe into Google’s practices marks the company’s third major antitrust challenge in India. In 2018, Google was fined $21 million by the CCI for ‘search bias,’ while in 2019, the CCI started investigating Google for allegedly misusing its dominant position to limit smartphone manufacturers’ options for alternate versions of its Android mobile operating system.
Moreover, Google has also come under regulatory scrutiny in the European Union and the United States for alleged anti-competitive behaviour, marking a global concern over Google’s dominance.
Competition Act, 2002 & The Role of the Competition Commission of India
The Indian Competition Act, 2002, which was amended in 2007, is the cornerstone of modern competition laws in India. It replaced the outdated Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) following the recommendations of the Raghavan committee. This act prohibits anti-competitive agreements, abuse of dominant positions by enterprises, and regulates combinations that can adversely affect competition within India.
The Competition Commission of India, a statutory body tasked with enforcing the act’s objectives, was established to eliminate adverse practices, promote competition, protect consumer interests, and ensure freedom of trade within Indian markets. It is comprised of a Chairperson and six Members appointed by the Central Government.
Last Modified: February 9, 2024