ADIF seeks interim relief from CCI on Google Play Store’s commission policy
The Alliance of Digital India Foundation (ADIF), a body representative of Indian startups, has filed a petition before the Competition Commission of India (CCI) seeking interim relief from Google’s new Play Store policy which goes into effect from March 2022.
According to a statement by ADIF, this relief has been sought on behalf of app developers as Google’s new policy will restrict certain categories of apps to use only Google Billing System (GBS) for accepting payments.
This would be an issue for app developers because GBS charges 30 percent commission for all transactions on the Google Play Store, compared to 2 percent charged by other payment processing systems, it noted.
“There is a strong case for seeking such relief as this new policy, when it goes into effect next March, would have a destructive effect on the operating margins of a large number of startups and make their business models infeasible,” ADIF said.
In November 2020, the CCI had directed a probe by the Director-General into the issue of mandatory use of Google Play Store’s payment system for paid apps and in-app purchases. The commission is of the prima facie view that such a policy is unfair as it restricts the ability of app developers to select a payment processing system of their choice.
In its petition to the commission, ADIF, which represents the interests of various stakeholders such as startups, app developers, etc, and espouses the objective of improving the startup ecosystem of the country, has stated that the 30 percent commission charged by Google is extremely high and unfair. However, the organisation said that the core issue is the mandatory imposition of the Google Play Billing system, and the exclusion of other methods of payment.
“This will have a disastrous effect on India’s digital ecosystem by reducing choices available in the hands of app developers and users as well as harming the country's innovation ecosystem by disrupting the cost structures and margins of multiple industries,” it said.
Murugavel Janakiraman, Founder and CEO of Matrimony.com, said: “The matter is not as much about the percentage of commission charged as it is about the anti-competitive practice of forcing a payment option as well as of forcing out other payment providers. If not kept in check, such anti-competitive policies and gatekeeper commissions will be imposed on more and more categories, causing a disastrous effect on competition and prices in India.”