India’s Competition Commission to Probe Google for Alleged Dominance Abuse

Google is set to face a probe by the Competition Commission of India (CCI) over accusations of leveraging its dominance to promote its payments app, Google Pay. This investigation stems from an anonymous complaint filed in February, prompting the CCI to take action.

Allegations and Investigation

The CCI order reveals that six allegations were made against Google in the complaint. While four of these have been dismissed, two key aspects will undergo investigation:

1. Exclusive Use of Google Pay: Google’s alleged preference for its payments app, Google Pay (GPay), for transactions within the Play Store, including app purchases and in-app transactions.
2. Pre-Installation and Prominence of Google Pay: Concerns regarding the pre-installation and prominence of Google Pay on Android smartphones.

To conduct the investigation, the CCI has directed the Director General to initiate the probe and submit a report within 60 days of the order. Notably, Google Pay currently holds a significant market share of nearly 40% in UPI transactions, trailing only behind PhonePe.

Google’s Response and Controversies

Google has refuted allegations of misusing Google Play to promote its own app, emphasizing that users opt for Google Play due to its commitment to safety, security, and seamless user experience. The tech giant has maintained that Google Play is not the sole app distribution option on Android devices.

This investigation follows Google’s recent clash with Paytm and other Indian developers over proposed payment policies, which would impose a 30% tax on in-app purchases across various categories. However, these policies were deferred following protests from Indian developers.

Increasing Regulatory Scrutiny

Pressure on Google has intensified amidst growing competition in the digital payments market, notably from WhatsApp Pay, which recently received approval to launch UPI payments. Google Pay and PhonePe, both dominant players in UPI transactions, will face a transaction cap of 30% from 2022, while WhatsApp Pay will be restricted to 20 million users.

This investigation adds to Google’s history of antitrust probes in India:

• A current investigation into Google’s dominance in the smart TV market.
• A 2019 probe over Google’s alleged manipulation of its Android system to limit smartphone makers’ choice of operating systems.
• A 2018 fine of over $21 million for search bias, where Google was accused of leveraging its dominance in online search to bolster its syndicate search services market position.

As regulatory scrutiny intensifies, Google finds itself at the center of ongoing antitrust investigations, reflecting broader concerns about market dominance and fair competition in the digital ecosystem.