Google Using Dominant Market Position To Charge ‘Unfair’ Commission, Says Startup Body

Google will charge 15-30 per cent and 11-26 per cent commissions from developers using its Google Play Billing System (GPBS) and User Choice Billing (UCB) system, respectively, starting April 26.

If a developer opts for User Choice Billing (UCB) system he would still have to pay third parties payment processing fees, Startup body says.

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As NCLAT is set to pronounce its order on Google's appeal against the Competition Commission of India (CCI) ruling that the company abused its dominant position in the Android ecosystem, Indian Startups say that Google is yet again using its “abusive dominance in OS and App store market” to impose “unfair, discriminatory, or disproportionate price-related condition on Indian app developers.”

Alliance of Digital India Foundation (ADIF), an industry body for India’s digital Startups, in a release on Wednesday said that disregarding CCI’s order, Google will charge 15 to 30 per cent, and an 11 to 26 per cent commission from developers using its Google Play Billing System (GBPS) and User Choice Billing (UCB) system respectively from April 26, 2023. 

ADIF said, “Contrary to the CCI orders of not imposing any unfair, discriminatory, or disproportionate price-related condition on Indian app developers for In-app purchases and Subscriptions, Google has shared that it would be charging 15-30 per cent, and 11-26 per cent commission fee on developers using its Google Play Billing System (GPBS) and User Choice Billing (UCB) system respectively from April 26, 2023.”

The Startup body said that Google has deliberately chosen its 11-26 per cent fee to make the choice of employing alternative payment solutions by app developers through UCB economically unattractive for app developers.  

If a developer opts for User Choice Billing (UCB) system he would still have to pay third parties payment processing fees, which, when added to Google’s 11-26 per cent, could meet or exceed the 15-30 per cent  Google Play Billing System (GPBS) fee they pay today. 

The statement says, “It is to be noted that GPBS is a payment method only, and the tech giant is charging such exorbitant commissions without providing any additional service.”

“India has set global benchmarks in digital payment and the entire payment industry is working on 1-5 per cent service fees. Google is demanding such an exorbitant commission, owing to its abusive dominance in the Android-based app store market,” the Startup body added further.

The increase in charges borne by developers creates an uneven playing field for digital startups entering the Android ecosystem and additionally widens the digital divide for millions of Indian users, the statement said. 

“This would impact many startup sectors, including Gaming, Education, Music, Video content, fitness, matrimony, and dating apps. This will impact the Indian Startup Ecosystem, as Indian entrepreneurs will not be able to invest in innovation, expansion, and economic products,” ADIF said, adding that “As Google is choosing the sectors for which these commissions would apply, this literally means that Google would determine the winners and losers in the Indian technology ecosystem.” 

The industry body said, “This is tantamount to Google putting its own ‘Lagaan’ to Indian app developers, owing to no other choice available to App developers, as Google has bundled its App store (i.e. Google Play) with mobile OEMs globally by imposing unilateral, unfair agreements, as noted by CCI.”

On March 29, the NCLAT will give its judgment on Google’s plea against the Competition Commission of India (CCI)’s order imposing a penalty of Rs 1,337.76 crore for allegedly abusing its dominant position in the Android ecosystem.

On October 20, 2022, the CCI penalised the tech giant for practices related to Android devices. Google was earlier given three months to comply with the CCI’s directive and its deadline ended on January 19. The tech giant then moved the NCLAT on December 22, and on January 4, the appellate tribunal asked Google to pay 10 per cent of Rs 1,337.76 crore in three weeks.