FinTech: India’s Competition Commission Orders Probe Against Google Pay

November 10, 2020 | FinTech, News
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The Commission took note of the complaints from an unnamed “Informant.”

The Competition Commission of India (CCI) has ordered its investigation arm, the Director-General, to conduct a detailed probe against Google (NASDAQ: GOOGL) for indulging in allegedly anti-competitive practices to promote its Google Pay online payment system and digital wallet platform. (ETNOWNEWS.COM)

Abuse of dominant market position

The CCI said in its order that it agreed with the definition of the “market” as provided by the Informant and that the “market for apps facilitating payment through UPI appears to be a distinct relevant market for the assessment of allegations in the present matter.”

Regarding the allegations under section 4, the CCI considered two main issues:

(a) mandatory use of Google Play’s payment system for purchasing the apps & IAPs in the Play Store and

(b) excluding other mobile wallets/UPI apps as one of the effective payment options in Google Play’s payment system.

On these counts, the CCI said it was of the prima facie view that Google’s conduct “amounts to imposition of unfair and discriminatory condition, denial of market access for competing apps of Google Pay and leveraging on the part of Google, in terms of different provisions of section 4 (2) of the Act.”

Preinstallation and prominence of Google Pay on Android smartphones

According to the informant, Google encourages pre-installation and opting for Google Pay as the default payment option on new smart mobile devices using the Android OS at the time of the initial setup.

This gives it an unfair advantage as it encourages users to use Google Pay over other apps facilitating payment through UPI.

On this issue, the CCI agreed with the contention of the informant and said it was of the “prima facie view that the alleged conduct on the part of Google merited detailed investigation.”

It said the investigation should examine Google’s revenue-sharing agreements with OEMs.

Other allegations dismissed

The CCI refused to probe the following complaints by the informant (because of)

  • search manipulation to favor Google Pay; (inadequate information)
  • prominent placement of Google Pay on Play Store; (not corroborated or substantiated)
  • search advertisement manipulation on Play Store, (absence of concrete information/evidence)
  • exclusivity requirements imposed by Google (compliance to be examined by a concerned regulator).

Conclusion

The CCI concluded that “the commission is of the prima facie view that the opposite parties have contravened various provisions of section 4 of the act, as detailed above. These aspects warrant a detailed investigation.”

The commission directed the director-general to complete an investigation. It asked that the agency submit its report within a period of 60 days from the date of its order.

Related Story:  Facebook’s WhatsApp Cleared To Roll Out UPI Payments In India

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