What is the controversy about Google Play Billing System? The tech giant's anti-competitive practices!
Google was fined Rs 936.44 crore on Tuesday by the country's antitrust regulator. This has been the second such action against Google for anti-competitive practices.
The Competition Commission of India (CCI) claimed that the US tech giant made use of its "dominant position" in the company's app store, Play Store, to compel app developers to make use of its in-app payment system.
The Commission fined Google around Rs 1,338 crore on Thursday for anti-competitive practices with regard to its Android operating system.
The Google Play Billing System- Explained
The Google Play Billing System (GPBS) is not only used by app developers, but also by customers for in-app purchases.
For app developers, it is important to use the Google Play Billing System to be able to list their products on the Play Store. This policy was announced in October 2020.
As per the tech giant's webpage, the Google Play Billing System (GPBS) is a must for purchasing digital items (like virtual currencies); app functionality or content; subscription services; cloud software, and more.
Google is planning to announce a payment policy. The policy will be coming into effect on October 31.
Developers are outraged about Google's payment systems
Indian developers and the ones belonging to other parts of the world have frowned against the measures used by Apple and Google to disallow third-party billing systems, all due to their hegemonic position.
As per the company, if they show a green light to third-party billing, it will cost revenue loss from their cut in the in-app sale and in-app store.
The tech giant has a default commission of up to 30 percent on transactions happening via the Play Store fee.
Soon after heavy criticism by regulators and developers alike, Google declared a few changes last year. It slashed its cut from 30 percent to 15 percent.
From July 1, 2021, the tech giant decreased the service fee on the first $1M (USD) in annual developer earnings to 15%.
All developers, irrespective of the annual revenue, are eligible for the benefit of this change.
Last year in October, the company announced a few more changes to Google Play's service fee model. In these changes, Google cut fees for subscriptions to 15 percent from 30 percent. It also decreased the fee for specific verticals or apps in the Play Media Experience Program to 10 percent.
As per Google, at present, 99% of developers globally are eligible for a service fee of 15 percent or less.
Orders by the CCI
The CCI conducted several investigations after which it instructed Google not to restrict app developers from making use of any third-party billing/ payment services. It has also asked the company to not discriminate against the apps in any way.
The company was also instructed to cease imposing anti-steering provisions. This is done so that developers can effortlessly link their apps to external websites where users are able to buy virtual currency or items sans the use of the Play Store payments system.
Finally, Google has also been ordered to lay down a crystal-clear transparent policy regarding data gathered on its platform and how such data is made to use. This also includes a transparent policy showing which parts of such data are shared with app developers.
Google's reaction to the instructions
On Wednesday, the tech giant broke its silence with an official statement saying, “Indian developers have benefited from the technology, security, consumer protections, and unrivalled choice and flexibility that Android and Google Play provide. And by keeping costs low, our model has powered India's digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate the next steps.”