Need of regulatory framework to rationalize fees charged by App Aggregators Google and Apple
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CCI’s latest ‘cease & resist order’ along with INR 936 Cr fine to Google, affirms unfair and arbitrary practices by Google
Alliance of Digital India Foundation (ADIF) believes the action taken against Google by CCI, will bring fair play in the Indian apps ecosystem
There is an imminent need to back the CCI decision with an appropriate ex-ante legislation, so as to stop BigTechs charging excessively from App developers, says ADIF
A overarching pricing regulatory authority for digital markets, in line with charges applicable for existing charges of PGs may be the next step in the right direction
The Alliance of Digital India Foundation (ADIF), a think-tank for India’s digital startup ecosystem, welcomes the action taken by the Competition Commission of India (CCI) against Google for unfair use of its dominant position with respect to Play Store policies, especially in regards to In-app payment systems. As Google’s unfair practices in regard to In-app purchases & subscription fees are established through the CCI verdict, the lasting way out is to have a legislative frame to restrain such practices of excessive charging by the App Aggregators platforms.
Charging to the tune of 30% for payment services is excessive by any means and CCI noted that mandatory imposition of GPBS (Google Play Billing System) limits technical advancement in the market for in-app payment processing services because it disturbs the incentives for innovation and the capacity of payment processors and app developers to innovate and build new technologies.
Also, other than payment processing services, Google play store does not provide any additional service which justifies the imposition of its supra-competitive fees, hence their commission of 15% or 30% is without any commercial justification.
This is a strong need to stop this abusive practice, and as has been established by CCI of this unfair practice, there needs a legislative framework to restrict the In-app payment charges in line with PG charges (up to 3%).
In the financial landscape, India is recognised as a pioneer of new technologies, along with UPI, which has lowered the financial transaction costs across the financial ecosystem in India, both for retail and institutional investors. The time is ripe to replicate the same for the app developers also, as this would usher a new paradigm in the Start-up space in India, with consumers getting innovative app-based solutions for their professional and business needs.
CCI fined Google Rs 936.44 crore on October 25 for abusing its dominant position with regard to its Play Store Billing and payment policy. The decision came just a few days after the regulator slapped a fine of Rs 1338 Cr on the errant multi-national firm for abusing its dominant position in multiple markets with its Android mobile operating system (OS), which should be considered as the resilient footing to set up the legislative framework.
ADIF spokesperson shared that this payments decision, along with the Android app bundling decision by CCI last week, will set a new precedent globally against the anti-trust practices followed by any dominant tech organization in India. ADIF, a 500+ member alliance working relentlessly for easing the operating ecosystem for Startups, shared that, there is a strong need to back the CCI decision with appropriate legislation, so as to stop App Aggregator platforms from charging excessively from App developers. A price regulatory authority and framework in Digital India Act or Competition Act, in line with the DMA act in the UK for digital markets, may be the imminent step in the right direction, which would help in restraining such anti-competitive practices by Significant IT intermediary organizations.