CCI to Probe Google

• 10 Nov 2020

Why in News

The Competition Commission of India (CCI) has initiated a probe into alleged abuse of dominant position by the company to promote its payments app, Google Pay.

Key Points

• CCI highlighted two main anti market practices by google to unfairly push Google Pay it’s payment app:
  
  • Mandatory Use: Google’s policy of mandatory use of Google Play’s payment system for purchasing the apps and IAPs (in-app purchases) in the Play Store.
  • Exclusionary Practices: It excluded other mobile wallets/UPI (Unified Payments Interface) apps as one of the effective payment options in Google Play’s payment system.
• The CCI also criticised Google’s policy to charge 30% commission for all app and in-app purchases. Since Google’s Play store cornered about 90% of all downloads, a significant volume of payments being processed in the market would thus be controlled by it.
  • If the application developers raise their subscription fees to offset the costs of google’s commission or remove/reduce premium/paid subscription offers for users, it may affect user experience, cost and choice. Such conditions imposed by the app stores limit the ability of the app developers to offer payment processing solutions of their choice to the users.
• CCI also highlighted reports of Google abusing its dominant position in the Android-television market by creating barriers for companies which wanted to use or modify its Android operating systems for their smart televisions.
• The probe against Google Pay comes days after the National Payments Corporation of India (NPCI) allowed rival Facebook-owned WhatsApp to go live on the UPI in the multi-bank model.
• This is Google’s third major antitrust challenge in India:
  
  • In 2018, the CCI fined Google $21 million for ‘search bias’:
    
    • It was alleged that Google was indulging in abuse of a dominant position in the market for online search through practices leading to search bias and search manipulation, among others.
  • In 2019, the CCI started probing Google for allegedly misusing its dominant position to reduce the ability of smartphone manufacturers to opt for alternate versions of its Android mobile operating system.
• Other countries where Google facing antitrust probe:
  
  • Regulatory scrutiny in the European Union for anti-competitive behaviour.
  • The United States Department of Justice (DoJ) also sued Google alleging the company had abused its dominant position in a way that had harmed its competitors as well as customers.

The Competition Act, 2002

• It was passed in 2002 and was amended by the Competition (Amendment) Act, 2007. It follows the philosophy of modern competition laws.
• The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of Raghavan committee.
• The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations, which causes or likely to cause an appreciable adverse effect on competition within India.
• In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal (COMPAT) were established.
• The government replaced COMPAT with the National Company Law Appellate Tribunal (NCLAT) in 2017.

Competition Commission of India

• It is a statutory body responsible for enforcing the objectives of the Competition Act, 2002.
• Composition: A Chairperson and 6 Members appointed by the Central Government.
• Objectives:
  
  • To eliminate practices having adverse effects on competition.
  • Promote and sustain competition.
  • Protect the interests of consumers.
  • Ensure freedom of trade in the markets of India.
• The Commission is also required to give an opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

Source: IE