Abuse Of Dominant Position: Google Pay investigated by CCI

Google Pay illustrative image

Google has landed itself in yet another lawsuit, this time in India. The Indian competition watchdog, Competition Commission of India (CCI), has opened a case against Google Pay (Tez) app. Details of the lawsuit were announced by the CCI and reported by Techcrunch.

What’s more interesting is that the identity of the person(s)/company(ies) who sued Google is undisclosed. The document names the “informant” as “XYZ,” while Google has asked the commission to reveal the identity of the suing party. This will be the third antitrust lawsuit against the company in India. It is also taking flak globally, facing antitrust cases in Europe, the U.S., and China

Google Pay Under CCI Microscope

Google Pay illustrative image

The CCI is a statutory body of the Government of India. One of its main objectives is to promote and sustain competition in the markets. Google Pay is the latest app to pop on its radar for alleged “contravention of various provisions of Section 4 of the Act.” This means Google Pay may receive government scrutiny in India for abusing its position of power.

The case against the Mountain View Giant refers to the company’s grip on the market for licensable mobile OS via Android. The informant has made its case by saying that Google has put up “high barriers to entry in the form of network effects, high sunk costs and Google’s access to a large installed user base; high level of vertical integration of Google’s business operations as it integrates Google’s Android with other must-have proprietary apps, such as the Play Store and Google Play Services.”

All of the allegations point to Google’s app having an added advantage over other applications providing the same services on Android. The informant also alleges Google of “rigging its featured apps lists” to include Google Pay in categories like “Editor’s Choice” or “Top Free Apps.”

Compared To Apple’s Europe Antitrust Case

Going further, the case compares Google’s conduct in India to that of Apple’s in Europe. The latter was recently slapped with antitrust lawsuits for maintaining a monopoly in its ecosystem. It also refers to the in-app purchases on the Google Play Store, for which the company is charging a 30% commission from developers.

The use and presence of a dedicated in-app purchase gateway are much more complicated. While it’s good for the customer’s safety, it’s not good for their wallets, considering Google or Apple’s 30% cut is ultimately added to the cost paid by the customer. Google filed its response to the case, asking for the identity of the ‘informant’ who filed it. The CCI denied to reveal the identity, showing signs of probably going after Google Suo Moto.

If that happens, we’re likely to see the ambit of this case expanding from Google Pay to the rest of Google’s Mobile Services. The company recently issued a rather heavily illustrative post showing how Android users are not tied to Google apps. We might see the company further clarifying its position on having Google Mobile services installed on every Android phone in the future.

Source: CCI Announcements

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