India orders antitrust probe into Google’s app store billing practices

India’s antitrust regulator has ordered an investigation into Alphabet’s Google amid a dispute with some Indian developers over its in-app billing system, saying the U.S. tech giant implemented its policies in an “unfair” and “discriminatory manner.”

The Competition Commission of India (CCI) said in an order on Friday that Google appears to have violated several provisions of the country’s antitrust law and asked its investigative arm to complete the probe within 60 days. The order came in response to a complaint filed by multiple Indian app developers and industry groups, many of whom have also publicly raised concerns about what they allege are unfair practices by Google.

Google pulled more than 100 apps from a set of 10 developers in India late last month after the Indian firms had “persistently not complied with its billing policies.” Google later restored the apps, but the firms will have to comply with the Play Store billing policies. The Indian developers had reached the CCI to investigate the matter.

CCI’s allegations Friday center around Google’s billing system for in-app purchases and paid apps on its Play Store. The regulator said Google is charging app developers an excessive and unfair service fee ranging from 10% to 30%, which appears to be disproportionate to the economic value of services provided by the company.

“The price being charged by Google appears to be unfair in itself,” the regulator said in its 21-page order. “Given this complete dependence of app developers on Google Play Store, the price being charged by Google appears to be unfair in itself.”

The commission also said Google is implementing its policies in a discriminatory manner, providing arbitrary distinctions between apps that offer digital goods and services and those that offer physical goods and services, even though they avail similar facilities on the Play Store.

Google said it was evaluating the order.

“The CCI has previously examined our service fee in detail between 2020 and 2022 and found no illegality, company spokesperson said. “However, we take our commitment to comply with local laws and regulations in India seriously and will cooperate with the process in every way.”

The watchdog’s decision is the latest headache for Google in India, its biggest market by users but one where it has long faced allegations of anti-competitive practices. Google has deployed more than $10 billion in India and has pledged to invest billions more in the coming years. The company is also an investor in Jio Platforms and Bharti Airtel, two of India’s top telecom operators.

The CCI imposed a record fine of $162 million on the company in 2022 for abusing its dominant position in the Android smartphone market and asked the firm to change its business model. Days later, the regulator fined Google $113 million for abusing the dominant position of its Google Play Store and ordered the firm to allow app developers to use third-party payments processing services for in-app purchases or for purchasing apps.

The U.S. giant has previously defended its Play Store policies, saying the service fee supports its investments in Android and Play Store, allowing it to provide developers with tools and a global platform to access billions of consumers around the world.

Lal Chand Bisu, co-founder and chief executive of Kuku FM, said last month that the Android maker had turned into “the most evil” partner to do business with and the Indian startup ecosystem was “completely” in its control. “We are now faced with no option but to accept their terms. This will destroy our business and make Kuku FM unfordable for the majority of the country, but when have a monopoly cared about anything beyond itself,” he said in a post on X.