Google pauses Play Store billing after CCI penalty. All you want to know

Google

Indian Market
by 5paisa Research Team Last Updated: 2022-11-02T13:07:59+05:30

The Indian antitrust watchdog seems to have won a major battle against Google. 

Google said it is placing on hold its demand that Indian developers adopt its in-house billing system while it “reviews its legal options” after the Competition Commission of India (CCI) levied a penalty on the search giant for what it termed “abuse of dominant position”.

The technology giant had earlier set October 31 as the deadline for developers to comply with the Google Play Store policies requiring them to use its billing system for the purchase of digital goods and services for transactions by users in India.

What exactly has Google said?

In a blog post on Tuesday, Google said that “following the CCI’s recent ruling, we are pausing enforcement of the requirement”, while it “reviews legal options and ensures it can continue to invest in Android and Play”. 

The requirement to use Google Play’s billing system will continue to apply for in-app digital content purchases for users outside of India, it said.

Why did CCI impose the penalty on Google?

In last week’s ruling, the CCI said Google was guilty of flouting multiple provisions of the Competition Act, such as making Google’s in-house payment and billing system mandatory for paid apps and in-app purchases. The commission said Google imposed unfair conditions on app developers.

On October 25, India’s antitrust regulator imposed a penalty of Rs 936.44 crore on Google for abusing its dominant position with respect to its Play Store policies, and issued a cease-and-desist order.

The commission also directed Google to make modifications within three months. This includes allowing mobile app developers to use third-party payment services on its app store.

Earlier, Google had said that any app that was not compliant with its Play Store policies would be removed from Google Play, starting June 1. However, the American company had given developers in India an additional extension until October 31, 2022, to comply in view of sustained pushback from Indian developers.

What do legal experts have to say on the issue?

According to an Economic Times report, legal experts said they had anticipated Google’s move to pause enforcement of Play Store policies while it evaluated its response to the CCI order.

According to the report, Yaman Verma and Naval Chopra, Partners at Shardul Amarchand Mangaldas & Co, said, “Google and its counsel have already stated that they propose to seek a stay of the CCI’s orders. However, given the well-reasoned decision of the CCI and the overwhelming evidence supporting its reasoning, this should be an uphill task,” they said.

Pointing out that typically an appeal to challenge the adverse order of the CCI is filed by an aggrieved enterprise before the NCLAT, Gautam Shahi, Partner with Dua Associates, said in the normal course of events, “a stay is granted by the NCLAT on deposit of 10% of the penalty amount imposed by the CCI, pending final disposal of the appeal.”

“Google has 60 days to file an appeal. Hence, it can be expected that they will use this time for completing the requisite legal groundwork before filing an appeal and challenging CCI’s order,” he said.

And what about the app developers? What do they have to say?

The ET report says that the app developers are still concerned over the usage of the word “pause” in the blog post on Tuesday.

Indian startups have said the CCI decision will “benefit and protect” Indian entrepreneurs from “digital colonialism”. This was preceded by the watchdog imposing an Rs 1,337.76 crore penalty on Google for abusing its dominant position in the Android devices market.

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