Google slapped with Rs 936.44 crore penalty for abusing dominance

New Delhi: In its second ruling against Google in less than a week, the Competition Commission on Tuesday slapped a penalty of Rs 936.44 crore on the internet major for abusing its dominant position with respect to its Play Store policies.
The regulator has also directed the company to cease and desist from unfair business practices as well as carry out various measures to address the anti-competitive issues within a defined timeline, according to an order.
This is the second major CCI ruling against Google in less than a week. On October 20, the watchdog imposed a penalty of Rs 1,337.76 crore on the company for abusing its dominant position in multiple markets in relation to Android mobile devices and ordered the internet major to cease and desist from various unfair business practices.
In a release on Tuesday, the Competition Commission of India (Commission) said it has imposed a penalty of Rs 936.44 crore on Google for abusing its dominant position with respect to its Play Store policies. The penalty amount translates to 7 per cent of the company’s average relevant turnover.
Google’s Play Store constitutes the main distribution channel for app developers in the Android mobile ecosystem, which allows its owners to capitalise on the apps brought to market.
The regulator noted that making access to the Play Store for app developers dependent on mandatory usage of GPBS (Google Play’s Billing System) for paid apps and in-app purchases constitutes an imposition of an unfair condition on app developers.
Apart from the penalty, CCI said Google should not restrict app developers from using any third-party billing/ payment processing services for purchasing apps.
There was no immediate comment from Google on the latest CCI order. On October 21, the internet major said it will review the order with respect to the Android devices matter.
Through the two orders passed in less than a week, the watchdog has imposed “provisional” penalties” totalling Rs 2,274.2 crore on Google. The latest ruling related to Google Play Store came on the last day of the tenure of CCI Chairperson Ashok Kumar Gupta.
In February 2018, the regulator imposed a fine of Rs 136 crore on Google for unfair business practices in the Indian market for the online search.
Currently, the regulator is probing Google in cases of alleged anti-competitive practices by Google with respect to news content and smart TV.
In the 199-page order on Tuesday, CCI flagged the issue of “glaring inconsistencies and wide disclaimers in presenting various data points by Google”.
“The Commission is constrained to observe that despite commanding enormous resources, Google has failed to provide the data in the manner sought by the Commission despite the grant of sufficient time, as sought by it.
“Be that as it may, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission decides to proceed to quantify the provisional monetary penalties on the basis of the data presented by Google,” the order said.
Google has been directed to provide the requisite financial data within 30 days of receiving the order.
Similar observations were also made in the CCI’s ruling against Google in the Android matter.
According to the release on Tuesday, Google has been asked to implement various measures, including allowing and not restricting app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps.
“Google shall also not discriminate or otherwise take any adverse measures against such apps using third-party billing/ payment processing services, in any manner,” the release said.
Further, the internet major has been asked not to impose any anti-steering provisions on app developers as well as not restrict them from communicating with their users to promote their apps and offerings, in any manner.
Google should not restrict end users, in any manner, to access and use within apps, the features and services offered by app developers, the release said.
According to CCI, the company should set out a clear and transparent policy on data that is collected on its platform, the use of such data by the platform and also the potential and actual sharing of such data with app developers or other entities, including related entities.
Among other directions, the regulator has told Google that the competitively relevant transaction/consumer data of apps generated and acquired through GPBS should not be leveraged by the company to further its competitive advantage.
“Google shall also provide access to the app developer of the data that has been generated through the concerned app, subject to adequate safeguards, as highlighted in this order,” the release said.
Also, CCI has asked the internet major not to impose any condition on app developers, which is unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers.
As per the regulator, Google should ensure complete transparency in communicating to app developers, services provided, and the corresponding fee charged. Google shall also publish in an unambiguous manner the payment policy and criteria for the applicability of the fee.
“Google shall not discriminate against other apps facilitating payment through UPI in India vis-a-vis its own UPI app, in any manner,” it added.
Meanwhile, the watchdog said that recently Google has allowed rival UPI apps to be integrated with the intent flow.
Earlier in the day before CCI issued its order related to Google’s Play Store matter, the CCI Chairperson said the regulator has been pragmatic in levying and quantifying penalties as the enforcement actions are not divorced from business and economic realities. PTI


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