CCI denies interim order restricting Google from charging its service fee
New Delhi, Mar 20, 2024
Google had argued that restricting it from charging a fee in the interim would virtually mean that the tech giant would have to provide its Playstore for free to developers in India
The Competition Commission of India (CCI) on Wednesday declined an interim relief order that would restrain Google from levying service fees on app developers until a final decision is made by the regulator.
The CCI also said the Director General (DG) would continue its investigation as ordered by the commission in its March 15 order.
“The Commission is of the considered opinion that no case whatsoever has been made out by the informants which warrant the grant of interim relief. Resultantly, the applications stand dismissed,” said the CCI while rejecting the plea by app developers in its order.
“The DG shall investigate without being swayed in any manner whatsoever by the observations made herein,” the order reads.
The regulator in its order said that while there might be concerns about the fairness of Google’s fee structure, it was essential to recognise the costs and responsibilities associated with maintaining and operating app stores.
Google had argued that restricting it from charging a fee in the interim would virtually mean that the tech giant would have to provide its Playstore for free to developers in India.
“No other court or regulator has passed a similar relief despite repeated requests. This recognises that Google cannot provide its platform without any consideration, especially when developers continue to charge their users for digital in-app purchases and enjoy the services of Play,” said the CCI in its order.
The plea was submitted by People Interactive India, which has brands such as Shaadi.com, and Sangam.com, and Mebigo Labs Pvt Ltd that owns the brand Kuku FM along with the Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF).
“I think the more important news is the CCI’s earlier order which has ordered an investigation to be completed in 60 days. Getting an interim order would have provided immediate relief to struggling startups but nothing really changes from a longer-term perspective. We remain confident about our case against large tech companies attempting to extract rent from India through extreme monopolistic practices.” said Anupam Mittal, Founder & CEO, People Group.
“While it is essential to ensure a level playing field and protect competition within the app store market, any measures taken should be proportionate and carefully crafted to minimise unintended consequences and preserve the overall integrity and functionality of the platform ecosystem,” it further read.
Attempts to reach out to People’s Group, ADIF, and others were unsuccessful as no response was received.
Last week, CCI ordered a probe into Google’s Play Store billing policy for imposing an ‘unfair service fee’ on app developers, while listening to pleas by some Indian companies.
In its 21-page order, the CCI had observed that such imposition by Google resulted in app developers having fewer resources to enhance or develop their app offerings, thereby constraining the growth of the app market.
The decision came after complaints from a few startups to the CCI, alleging that the tech giant was not complying with its earlier ruling of allowing third-party billing services for in-app purchases.
The contention between app owners and Google is over a service fee of 11-26 per cent that the tech giant charges from select developers who use the in-app billing services.
[The Business Standard]
