The Competition Commission of India (CCI) has initiated an investigation into Google‘s contentious user choice billing system following complaints from Indian startups. Allegations suggest that Google’s billing practices may violate competition law, prompting the CCI to direct its director general to conduct a thorough probe and submit a detailed report within two months.
According to the preliminary findings of the CCI, Google may have breached various sections of the competition law with its billing practices. The commission has directed its director general to conduct a comprehensive investigation and submit a detailed report within the next two months.
In its official statement, the CCI expressed its prima facie view that Google has contravened provisions outlined in Section 4(2)(a), 4(2)(b), and 4(2)(c) of the Act, necessitating further scrutiny.
The complaints against Google were filed by People Interactive India, the parent company of Shaadi.com, Mebigo Labs, the parent company of Kuku FM, and industry bodies such as the Indian Broadcasting and Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF).
A key contention raised by these parties is Google’s imposition of a significant commission, ranging from 11% to 26%, on app developers for transactions processed through alternative billing systems.
Startups argue that these steep service fees have severely hampered their financial viability, limiting their capacity to innovate and enhance their app offerings. Moreover, concerns have been raised that the escalating operational costs imposed by Google’s billing system could potentially force some startups out of business, thereby obstructing their market access.
The outcome of the ongoing investigation holds significant implications for the Indian startup ecosystem, with potential repercussions for app developers and entrepreneurs nationwide. As the probe unfolds, all eyes will be on Google’s response to the allegations and how regulatory authorities navigate the complex dynamics of competition within the digital marketplace.
