India antitrust watchdog the Competition Commission of India (CCI) opened an investigation into Google, after accusation surfaced surrounding the US company abusing its dominant app store market share to promote payment services.
TechCrunch reported, the CCI will investigate whether the Android developer unfairly pushed its Google Pay services in the set-up of an Android smartphone and if smartphone manufacturers have the option to avoid this. It will also investigate whether the Play Store billing system was designed to “the disadvantage of both i.e. apps facilitating payment through UPI, as well as users.”
The CCI stated it received information from an informant who said in-app purchases through the Play Store are demanded to support Google Pay service, and to be listed on the Play Store and developers have to pay a “high commission”.
The US technology giant was also accused of pushing Play Store search results to favour the Google Pay app over rival payment apps, although this will not be investigated due to lack of evidence, said the CCI.
Google stated to the regulator Android is “not dominant in India” and faces strong competition from feature phone operating systems, and modern feature phones now have smartphone features the informant highlighted.
“Moreover, Android is claimed to be facing significant competition from licensable and non-licensable OSs”, the regulator said.
On its service fee Google defended, stating the 15% to 30% service fee is not “arbitrary” but “legitimate, and pro-competitive, as it uses the funds to cover third party fees and upgrade the Play Store. Around 99% of smartphone in India run Android according to Counterpoint Research.