ADIF files petition before CCI against Google's new PlayStore policy

CCI is already looking into the matter for potential abuse of dominance by Google in the app market

The Alliance of Digital India Foundation (ADIF) has filed a petition before the Competition Commission of India (CCI) through their lawyers at Sarvada Legal seeking interim relief from Google’s new PlayStore policy which goes into effect from March 2022.

The matter is already being looked into by the CCI for potential abuse of dominance by Google in the app market. 

This relief has been sought by ADIF 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 per cent commission for all transactions on the Google Play Store, said a statement from ADIF.

Murugavel Janakiraman, the 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.”

In its petition to the commission, ADIF, which represents the interests of various stakeholders such as startups, app developers, etc., has stated that the 30% commission charged by Google is extremely high and unfair. However, the organization said that the core issue is the mandatory imposition of the Google Play Billing system and the exclusion of other methods of payment.

While ADIF will support the ongoing inquiry by the Director General into the matter, it has been compelled to move the application for interim relief to protect the choice of app developers to use other payment systems with far more favorable terms of service. Google’s new policy will exclude competing payment service providers from the market for payments for digital goods consumed through Android devices. 

“ADIF foresees that barring an order passed by this Hon’ble Commission to maintain status-quo until the completion of the ongoing inquiry, Google shall proceed to enforce its terms on the Play Store, thereby leading to adverse and irreversible consequences on India’s fledgling startup ecosystem,” said Sijo Kuruvilla George, Executive Director, Alliance of Digital India Foundation.

ADIF believes that if the status quo is not maintained pending the completion of the inquiry, Google will enforce its terms on the Play Store in March 2022, leading to irreversible consequences for India’s startup ecosystem.

Google did not respond on the issue.

Meanwhile, Google in March this year announced a reduction of service fee Google Play receives to 15 per cent for the first $1 million of revenue every developer earns each year. The company claims that with this change, 99 per cent of developers globally that sell digital goods and services with Play will see a 50 per cent reduction in fees.

“The service fee that is charged for Google Play is only applicable to developers who offer in-app sale of digital goods and services. More than 97% of apps globally do not sell digital goods, and therefore do not pay us any service fee,” said Sameer Samant, VP, Android and Google Play in a blog

earlier this year.

Samant further wrote: “For the developers in India that do sell digital goods, but have not yet integrated with Play’s billing system, they continue to have until 31st March, 2022 as announced previously.  For the thousands of developers in India that are already using Play to sell digital goods, they can start receiving the benefit of this change as soon as it goes into effect in July.”

Last month, Google also took CCI to court after a confidential interim report was leaked to the media. The case was however dismissed a few days later.