Google says OK to withdraw Play billing obligation

Google says OK to withdraw Play billing obligation
Google says OK to withdraw Play billing obligation

Global Market
by 5paisa Research Team Last Updated: 2022-11-02T17:28:31+05:30

It looks like Google is willing to smoke the pipes of peace with the Competition Commission of India (CCI) for now. Just a week after the Competition Commission of India (CCI) imposed  a Rs2,274 crore penalty on Google, they have decided to pause the enforcement of its Google Play billing system for app developers based in India. This had been one of the controversial issues wherein Google was forcing the app developers to mandatorily use the Google Play billing system and not resort to any other payment system. It had been struck down as anti-competition and for now Google has decided to opt for reconciliation.

Also Read: Google pauses Play Store billing after CCI penalty


It is not year clear whether Google has had a change of heart or whether it is just buying time till it adopts its own legal course. For now, Google is pausing the enforcement of its Google Play billing system for in-app purchases for app developers based in India. Incidentally, the Indian app developers had to mandatorily comply with this requirement by October 31, 2022; which was the deadline. However, Google has now suspended this requirement, which was one of the key conditions of the Google order. This looks more like a temporary measure till they crystallize their thoughts on the legal course of action.


However, even as Google is smoking the peace pipe, there is a catch to the story. For instance, the Google Support page clearly notes that this exemption only applies for in-app digital content purchases for users within India and not for those outside of India. What this means is that if an Indian app developer wants to offer digital content for purchase to users outside the country, they will need to comply with the Play billing system. In short, the exception made is only for the Indian customers, which is what is the subject of the CCI order and also the jurisdiction of the CCI in the first place.


Several developers had, in the past, also complained to the Competition Commission of India (CCI) about the rather unfair terms and conditions imposed by Google in the Indian market. According to the app developers, the billing system requirement was essentially an unfair policy since the existing commission system stifled innovation in a price-sensitive market like India. The penalty of Rs2,267 crore had been imposed on Google for misusing its dominant position in the Android app operating system as well as in its overall ecosystem comprising principally of its search engine.


Let us quickly run through what is this Google Play billing system all about? Google Play’s billing system is a compulsory requirement for developers who wish to offer in-app content for purchase. This is almost akin to how developers have to mandatorily use Apple’s billing systems if they wish to sell goods or offer subscriptions to users. Both Google and Apple charge developers a commission ( 15 to 30 per cent) for the digital goods sold via apps. In fact, Google has consistently argued that the system offered by Google and Apple are the same, although the contention has been rejected by Competition Commission of India (CCI).


Under the terms of Google, Play billing system is required for several purchases. This includes digital items (like virtual currencies, additional playtime, characters avatars etc. It also covers subscription services like fitness, games, dating, education, music, content subscription etc. This is also applicable to any ad-free version of an app or new features not available in the free version. Above all, the Play billing system is also mandatory for products cloud software and services which include data storage services, business productivity software financial management software, among others.


One of the major objections that the Competition Commission of India (CCI) had to Google’s Play Store policies is the mandatory use of GBPS. According to the policy, App developers are required to exclusively and mandatorily use Google Play’s Billing System (GPBS) and developers were not permitted to provide a direct link to their own webpage and payment alternatives. The Google Play Store terms also clearly state that developers that do not adhere to these rules and guidelines would automatically get delisted from the Play Store and thus lose out on any customer franchise that they may have created over time.


Of course, the last word is not yet said on this subject and a clearer picture will emerge when Google finalizes its stand on whether to pursue legal recourse or not.


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