Google has faced another regulatory setback in India after the National Company Law Appellate Tribunal (NCLAT) upheld key findings by the Competition Commission of India (CCI) that the company had engaged in anti-competitive practices through its Play Store billing policies.
The silver lining is that while affirming that Google abused its dominance in the digital payments and app store markets, the tribunal significantly reduced the financial penalty imposed on the tech giant. The fine, originally set at ₹936.44 crore (approximately $110 million), has now been lowered to ₹216.69 crore ($26 million) following a reassessment of the financial impact of Google’s practices. Google will now be required to pay the revised penalty amount, having already deposited 10% of the sum. The company has 30 days to clear the remaining balance.
The case against Google stemmed from allegations that the company unfairly required app developers on its Play Store to use the Google Play Billing System (GPBS) for in-app purchases and paid app downloads. This meant that developers had no choice but to process payments through Google’s platform, which charges a commission of up to 30% on transactions.
In its prior ruling, the CCI had found that these practices stifled competition by preventing alternative payment service providers from operating freely in the market. Developers who wanted to avoid Google’s fees had no viable options, as the company barred them from directing users to external payment platforms. The CCI concluded that this behavior was a clear abuse of market dominance, violating India’s Competition Act of 2002. Google was ordered to make changes to its billing policies and fined a substantial amount as a punitive measure.
Upon appeal, the NCLAT largely upheld the CCI’s ruling but reduced the fine imposed on Google. The tribunal ruled that while Google’s actions restricted competition and harmed the interests of app developers, certain aspects of the original decision required reconsideration. It rejected the claim that Google had entirely blocked access to third-party payment processors, noting that less than 1% of Play Store transactions occurred via GPBS, meaning that other digital payment methods remained in use.
Moreover, the tribunal overturned CCI’s findings under specific sections of the Competition Act, particularly those relating to Google allegedly hindering technological innovation. It found no conclusive evidence that Google’s policies actively prevented scientific or technological development in the digital payments space. Additionally, the claim that Google engaged in unfair pricing by offering preferential treatment to some services, such as YouTube, was dismissed due to a lack of definitive proof. Despite these revisions, the core ruling against Google’s anti-competitive behavior remained intact. The tribunal maintained that Google had unfairly leveraged its dominant position to force developers into using its payment system, thereby limiting competition and market access for other service providers.
This comes at a time when Google is facing regulatory pressures both in India and beyond. Similar cases have emerged in other regions, with regulators in the European Union, the US, Australia, and Japan taking steps to limit the control exerted by Google and Apple over their respective app store ecosystems. The European Union, for instance, imposed a record €4.3 billion fine on Google in an antitrust case concerning Android’s market dominance. In response to mounting legal challenges, Google has made some policy changes, including introducing “user choice billing” in select markets.
