CCI imposes ₹936 crore penalty on Google for anti-competitive practices in relation to its Play Store policies

The Competition Commission of India (Commission/CCI) on Tuesday imposed a penalty of ₹936.44 crore on Google for abusing its dominant position in relation to its Play Store policies [XYZ v Alphabet Inc & Ors]. .Additionally, the CCI also directed Google to cease and desist from participating in anti-competitive practices and to modify its conduct within a defined timeline."The Commission imposed a penalty @ 7% of its average relevant turnover amounting to Rs. 936.44 crore upon Google on provisional basis, for violating Section 4 of the Act. Google has been given a time of 30 days to provide the requisite financial details and supporting documents," a press release issued by the CCI said.Based on its assessment, the Commission found Google to be dominant in the markets for licensable operating system (OS) for smart mobile devices and market for app stores for Android smart mobile OS in India..Google was represented by Senior Advocate Sajan Poovayya instructed by Chandhiok & Mahajan and Cyril Amarchand Mangaldas. The C&M team was led by head of competition and disputes, Karan Chandhiok and partner, Deeksha Manchanda along with associates Tarun Donandi and Bhavika Chhabra. The CAM team was led by Avaantika Kakkar and partner, Kaustav Kundu with associate Ruchi Verma.Match Group was represented by Senior Advocates Jayant Mehta, who was assisted by lawyers from Talwar Thakore & Associates and Sarvada Legal including Abir Roy, Sonam Mathur, Dinoo Muthappa and Dhruv Dikshit..Alliance of Digital India Foundation was represented by Advocates Abir Roy, Vivek Pandey and Tom Thomas.The original complainant, whose identity was kept confidential, was represented by Shardul Amarchand Mangaldas Partners Naval Chopra and Yaman Verma..Summary of CCI findings .1) Mandatory usage of Google Play's Billing System (GPBS) for paid apps and in-app purchases constitutes an imposition of unfair condition on app developers;2) Google following discriminatory practices by not using GPBS for its own applications i.e., YouTube;3) Mandatory imposition of GPBS disturbs innovation incentives and the ability of both the payment processors as well as app developers to undertake technical development and innovate, thereby limiting technical development in the market for in-app payment processing services;4) Mandatory imposition of GPBS by Google, also results in denial of market access for payment aggregators as well as app developers;5) The practices followed by Google results in leveraging its dominance in market for licensable mobile OS and app stores for Android OS, to protect its position in the downstream markets, in violation of the provisions of Section 4(2)(e) of the Competition Act;6) Different methodologies used by Google to integrate, its own UPI app vis-à-vis other rival UPI apps, with the Play Store results in violation of Sections 4(2)(a)(ii), 4(2)(c) and 4(2)(e) of the Act..The CCI noted that, if the app developers did not comply with Google’s policy of using GPBS, they would not be permitted to list their apps on the Play Store and thus, were losing out on the vast pool of potential customers in the form of Android users."Making access to the Play Store dependent on mandatory usage of GPBS for paid apps and in-app purchases is one sided and arbitrary and devoid of any legitimate business interest. The app developers are left bereft of the inherent choice to use payment processor of their liking from the open market," the press release by CCI explained..It was opined that selling of in-app digital goods constitutes an important means for app developers to monetize their creations/innovations."However, for in-app digital goods to be distributed to purchasing users, developers must configure their apps so that all purchases of the digital goods go through Google’s payment system, which processes the transactions.".The Commission also examined the allegations of exclusion of rival UPI apps as effective payment options on Play Store and found that Google Pay has been integrated with intent flow methodology whereas other UPI apps can be used through collect flow methodology. "It was noted that, the intent flow technology is superior and user friendly than collect flow technology, with intent flow offering significant advantages to both customers and merchants and the success rate with the intent flow methodology being higher due to lower latency.".Therefore, the CCI concluded that Google's actions amounted to abuse of its dominant position and were in contravention of Section 4 of the Competition Act..The Commission also indicated following measures which could aid Google aid in modifying its conduct:1) Google shall allow, and not restrict app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps;2) Google shall not impose any Anti-steering Provisions on app developers and shall not restrict them from communicating with their users to promote their apps and offerings, in any manner;3) Google shall not restrict end users, in any manner, to access and use within apps, the features and services offered by app developers;4) Google shall set out a clear and transparent policy on data that is collected on its platform, use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities, including related entities; 5) The competitively relevant transaction/ consumer data of apps generated and acquired through GPBS, shall not be leveraged by Google to further its competitive advantage;6) Google shall not impose any condition (including price related condition) on app developers, which is unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers;7) Google shall ensure complete transparency in communicating to app developers, services provided, and corresponding fee charged and shall also publish in an unambiguous manner the payment policy and criteria for applicability of the fee(s); 8) Google shall not discriminate against other apps facilitating payment through UPI in India vis-à-vis its own UPI app, in any manner..In the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission imposed the provisional monetary penalty of ₹ 936.44 on the basis of the data presented by Google and gave it thirty days to provide requisite financial details and supporting documents..Last week, the CCI had imposed a penalty of ₹1337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem..[Read Press Release].[Read Order]