Google Play billing system comes under RBI scanner over alleged violations

The Reserve Bank of India (RBI) has launched an investigation into Google Play’s billing system over alleged violations of the Payments and Settlements Systems Act, said people aware of the development, requesting anonymity. The probe follows a complaint lodged by Kolkata-based Hoichoi Technologies.
 

The complaint pertains to the operation of several of Google’s aggregator platforms in India, which are registered in foreign countries, including Singapore and the US.
 

“The Google Play billing system is not a payment system and we are responding to the concerned authorities with regard to their 

queries,” said a Google spokesperson.

The RBI, it has been learnt, has already met with executives from Google and sought additional information. 

An email query to the RBI did not elicit any response.

Hoichoi Technologies declined to comment on the matter, citing its sub judice status, and stated it would share its views once the court order is pronounced. The company has lodged a writ petition on the matter at the Calcutta High Court.
 

Industry insiders said that Hoichoi is questioning the legality of GPBS.
 

Google Play’s billing system is a service that allows app developers to sell digital products and content within their Android apps. Developers can utilise Google Play’s billing system to sell one-time products or recurring subscriptions.
 

Last week, the Competition Commission of India (CCI) ordered an investigation into Google Play Store’s billing policy for allegedly imposing an “unfair service fee” on app developers, in response to pleas from several Indian firms. In its 21-page order, the CCI noted that such imposition by Google resulted in app developers having fewer resources to enhance or develop their app offerings, thereby constraining the growth of the app market.

The decision was prompted by complaints from a number of startups to the CCI, alleging that the tech giant was not complying with its earlier ruling of allowing third-party billing services for in-app purchases.
 

However, in a reprieve for the tech giant, the Commission recently declined an interim relief that would have prevented Google from levying service fees on app developers until a final decision is reached.