Google faces antitrust investigation in India over Google Pay

Google Pay Power Button Shortcut
Google Pay Power Button Shortcut (Image credit: Joe Maring / Android Central)

What you need to know

  • Google is being investigated bu the Competition Commission of India over antitrust allegations.
  • The company is being accused of unfairly privileging its Google Pay payment system in the Play Store over competitors.
  • Google rejects this characterization, arguing that it neither has a monopoly on phones nor does is the Play Store the exclusive distribution area for smartphone apps in India.
  • The CCI rejects Google's claims regarding being a monopoly and has opened an investigation into whether Google does favor its Google Pay app over competitors to the detriment of consumers.

An anonymous complaint has been lodged with the Competiton Commission of India(via Tech Crunch), accusing Google of antitrust violations in its handling of Android, the Play Store, and Google Pay (formerly known as Tez in India).

From the CCI's press release, the complaint has three main points

[Google has been] unfairly privileging Google Pay by prominent placement on the Play Store, Android OS and Android-based smartphones by skewing the search results on the Play Store in favour of Google Pay; by rigging its featured app lists to include Google Pay in categories, such as "Editors' Choice Apps", "User Choice App of 2018" and "#Top Free app" demonstrating clear bias in favour of its own app; by manipulating the search advertisements algorithm on the Play Store in favour of Google Pay; and by pre-installing and prominently placing Google Pay on Android smartphones at the time of initial set-up resulting in a "status-quo bias" to the detriment of other apps facilitating payments through UPI as well as other methods of payment, such as mobile wallets, net banking, etc.b.) mandating apps to use Play Store's payment system and Google Play In-App Billing for charging their users for purchase of apps on Play Store and In-App purchases (which privileges Google Pay over other apps facilitating payment through UPI and mobile wallets), if they want to be listed on the Play Store; andc.) imposing unfair terms on users by requiring them to use Google Pay which is not in compliance with the data localisation directive issued by Reserve Bank of India and the guidelines issued by NPCI.

Google counters these arguments, noting that it doesn't even qualify as a monopoly. It argued that it heavy competition from feature phones in India. It also notes that even when Android is invoiced, OEMs in India often pre-load rival app stores. Even when they don't, Google notes that 40% of app downloads in India don't happen on the Play Store. Google also noted that it doesn't grant unmerited prominence or favor in rankings to its own Gooogle apps, noting that it was in its own best interest to ensure that users had the best experience.

The Commission didn't agree with some of Google's statements, deeming it a dominant force as far as market share for licensable smartphone operating systems and app stores go.

When it comes to Google Pay and Google Play, the Commission will be opening an investigation into whether Google is actually skewing the search results or not, as well as if the Google Play Store billing system unfairly disadvantages rival apps.

In a statement to TechCrunch, Google reiterated many of the counter-arguments it made to the watchdog, saying:

We are pleased that the CCI has rejected several claims made by the anonymous complainant. On the remaining concerns, first, we are confident that the CCI will find that GPay operates in an extremely competitive environment, and owes its success to its ability to offer consumers a simple and secure payments experience."Secondly, numerous distribution channels exist for apps on the Android platform; Play is not the only app distribution option for Android. Users choose Google Play because we ensure a safe, secure, and seamless experience. Play's billing system is a fundamental part of meeting this user expectation and helps ensure our continued investment in the many important things needed to make developers successful.

Michael Allison