Startups collective eye legal action to challenge Google
Mar 1, 2023
Synopsis
Representatives from matrimony, dating, fintech, edtech and gaming sectors discussed the implications of the billing system, where Google said it would reduce the fee only by 4% if a user pays through an alternative billing system.
Indian startups are exploring various legal options, including approaching the antitrust regulator to challenge Google’s User Choice Billing system, which they termed a 'violation of the CCI verdict,' sources told ET.
Representatives from matrimony, dating, fintech, edtech and gaming sectors discussed the implications of the billing system, where Google said it would reduce the fee only by 4% if a user pays through an alternative billing system.
The collective said it was in the process of exploring “all avenues to challenge the said policy as being in violation of the CCI order and Competition Act,” according to a statement by policy think tank, Alliance of Digital India Foundation (ADIF).
The Competition Commission of India (CCI) had last year ordered Google not to restrict app developers from using any third-party billing/payment processing services, either for in-app purchases or for purchasing apps.
“(The participants) brainstormed at length on the various aspects as a way forward in response to Google's recent announcement of reducing the fee by just 4%,” ADIF said. “Despite not using any service from Google, app developers will be forced to pay commissions (11%-26%) to Google. The startup community agreed that Google's non-compliance will impact the Indian startup ecosystem negatively.”
Last week, ET reported that Google had told developers that they have time till April 26 to comply with the new Google Play payments policy which will permit alternative billing. The company said this was being done in response to the recent regulatory developments.
“This change means that developers can now offer an alternative billing system alongside Google Play's billing system to users in India making in-app purchases within Play-distributed apps on mobile phones and tablets," the search giant said in an email, which ET has reviewed.
Developers, however, said this was a direct violation of the CCI guidelines and alleged that Google was 'finding loopholes' in CCI's verdict and 'going the South Korea way' wherein it had introduced user choice billing after coming under fire from regulatory authorities in South Korea.
“When a consumer chooses to use an alternative billing system, the standard service fee the developer pays will be reduced by 4%,” a Google spokesperson told ET last week.
The spokesperson added that Google Play’s service fee has never been simply a fee for payment processing.
“It reflects the value provided by Android and Google Play, and all of the developer services we offer, including app distribution and discovery, the commerce platform, developer tools, analytics, training, and more,” the spokesperson had said.
[The Economic Times]
