Google fined Rs. 936.44 crore for anti-competitive practices in payment options.

The Commission found Google's mandatory use of Google Play's billing system and exclusion of other UPI apps as payment options to be anti-competitive practices violating various sections of the Act. Google was directed to cease these practices and imposed a provisional penalty of Rs. 936.44 crore, equivalent to 7% of its average relevant turnover for the last three financial years. Google must deposit the penalty within 60 days and provide financial details and supporting documents within 30 days.

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Issues Involved:
1. Mandatory use of Google Play's billing system (GPBS) for app purchases and in-app purchases.
2. Exclusion of other UPI apps/mobile wallets as effective payment options on Play Store.
3. Pre-installation and prominence of Google Pay UPI App (GPay).

Detailed Analysis:

1. Mandatory Use of Google Play's Billing System (GPBS):
Google requires app developers to use GPBS for processing payments for paid apps and in-app purchases. This policy is part of Google's Developer Distribution Agreement (DDA) and Developer Program Policies (DPP). The DG found that Google's mandatory imposition of GPBS and the anti-steering provisions, which restrict app developers from directing users to alternative payment methods, constitute an imposition of unfair conditions on app developers in violation of Section 4(2)(a)(i) of the Act. Additionally, Google charges a service fee of 15-30% for using GPBS, which is significantly higher than the fees charged by other payment processors in India (0-3%). The DG concluded that Google's service fee is unfair and discriminatory, violating Section 4(2)(a)(ii) of the Act. The DG also found that Google's practices limit technical development and deny market access to other payment processors and app developers, violating Sections 4(2)(b)(ii) and 4(2)(c) of the Act. Furthermore, Google's practices were found to be leveraging its dominance in the market for licensable mobile OS and app stores for Android OS to protect its position in the market for in-app payment processing, violating Section 4(2)(e) of the Act.

2. Exclusion of Other UPI Apps/Mobile Wallets:
Google Pay UPI app is integrated with the intent flow methodology, which is more user-friendly and has a higher success rate compared to the collect flow methodology used for other UPI apps. The DG found that this differential treatment gives Google Pay a competitive advantage, resulting in a higher market share for Google Pay in UPI transactions on the Play Store compared to its overall market share. The DG concluded that Google's conduct is discriminatory, violating Section 4(2)(a)(ii) of the Act, and results in denial of market access to competing UPI apps, violating Section 4(2)(c) of the Act. Additionally, Google's conduct was found to be leveraging its dominance in the markets for licensable mobile OS and app stores for Android OS to protect its position in the market for UPI-enabled digital payment apps, violating Section 4(2)(e) of the Act.

3. Pre-installation and Prominence of Google Pay UPI App (GPay):
The DG found that Google enters into Revenue Sharing Agreements (RSAs) and Placement Bonus Agreements (PBAs) with OEMs for pre-installation and prominent placement of Google Pay UPI app on mobile devices. However, the DG did not find sufficient evidence to indicate that Google has abused its dominant position in this regard. The DG noted that other UPI apps such as PhonePe and Paytm also have agreements with OEMs for pre-installation of their apps, and Google Pay was pre-installed on less than a significant percentage of total mobile devices sold in India in 2020.

Procedural Errors:
Google alleged procedural errors in the investigation, including disregarding critical evidence, leading questions to third parties, and failure to consult a representative cross-section of participants. The Commission found these allegations to be without merit, noting that the DG had incorporated Google's responses and given it sufficient opportunities to present its case.

Order:
The Commission directed Google to cease and desist from anti-competitive practices, including:
- Allowing app developers to use third-party billing/payment processing services.
- Not imposing anti-steering provisions on app developers.
- Ensuring transparency in data collection and sharing policies.
- Not discriminating against other UPI apps.

Penalty:
The Commission imposed a provisional penalty of Rs. 936.44 crore on Google, calculated as 7% of its average relevant turnover for the last three preceding financial years. Google is directed to deposit the penalty amount within 60 days and submit the requisite financial details and supporting documents within 30 days.

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