The Alliance of Digital India Foundation (ADIF)—a New Delhi-based think tank representing startups—has filed a petition before the Competition Commission of India (CCI) seeking interim relief from Google’s upcoming new Play Store policy until an ongoing antitrust investigation into the tech major is completed.
The new Play Store billing policy is set to come into effect from March 2022.
The relief has been sought by ADIF on behalf of app developers as Google’s new policy will restrict certain categories of apps to use only the Google Billing System (GBS) for accepting payments. This would be an issue for app developers because GBS charges a 30% commission for all transactions on the Google Play Store, compared to the 2% charged by other payment processing systems.
Google did not comment on the matter.
In its petition to the commission, ADIF has stated that the 30% commission charged by Google is extremely high and unfair. The organization emphasised that the core issue, though, is the mandatory imposition of the Google Play Billing system and the exclusion of other methods of payment.
“There is a strong case for seeking such relief as this new policy when it goes into effect next March, would have a destructive effect on the operating margins of a large number of startups and make their business models infeasible,” reads an ADIF statement.
It is pertinent to note that the CCI in November 2020 had directed a probe by the Director-General into the issue of mandatory use of Google Play Store’s payment system for paid apps and in-app purchases. The commission is of the prima facie view that such a policy is unfair as it restricts the ability of app developers to select a payment processing system of their choice.
While ADIF will support the ongoing inquiry by the Director-General into the matter, it has moved the application for interim relief to protect the choice of app developers to use other payment systems with far more favourable terms of service. Google’s new policy will exclude competing payment service providers from the market for payments for digital goods consumed through Android devices.
“ADIF foresees that barring an order passed by this Hon’ble Commission to maintain status-quo until the completion of the ongoing inquiry, Google shall proceed to enforce its terms on the Play Store, thereby leading to adverse and irreversible consequences on India’s fledgling startup ecosystem,” says Sijo Kuruvilla George, Executive Director at ADIF.