ACTION ON GOOGLE’S NEW POLICY (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     21st March 2024        
output themes

Context: Recently, the fair trade regulator CCI dismissed four petitions from Indian app companies that challenged Google's new Play Store billing policy, which imposes an 11 to 26% charge on in-app payments.

About the Issue

  • Google's Fee Structure: Google imposes platform fees ranging from 11% to 30% for in-app purchases involving purely digital services.
  • Justification by Google: Google argues that these fees support the maintenance of Google Play and the growth of the Android ecosystem.
  • Differential Charges: Different rates apply based on factors like revenue levels and regional regulations. For instance, in India and South Korea, fees range from 11% to 26% depending on payment methods chosen by developers.

Response of the Competition Commission of India (CCI)

  • Google's Fine: The CCI imposed a fine of Rs. 936 crores on Google in 2022 due to concerns over its Play Store policies.
  • Appeal Process: Google is currently appealing the fine and orders by the CCI regarding providing developers with more payment options.
  • Legal Proceedings: Google's appeal against the fine is pending at the National Company Law Appellate Tribunal.
  • Return of Indian Apps: Indian apps that took legal action against Google are back on the platform temporarily.
  • Status of In-App Payments: In-app payments remain a minor aspect of India's digital economy, primarily limited to specific services like content streaming, dating, and matrimonial services.

Competition Commission of India (CCI)

  • About: It is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases.
  • Establishment: March 2009 by the Government of India under the Competition Act, 2002for the administration, implementation, and enforcement of the Act.
  • Headquarters: New Delhi.
  • Composition of the CCI: One Chairperson and six Members who shall be appointed by the Central Government.