CCI report on Unfair practices

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The director general (DG) of the Competition Commission of India (CCI) has recently submitted its report on Google’s Play Store billing policies.

About the News

• The report paves the way for the CCI to regulate how firms like Google LLC and Apple Inc. run their app stores.
• The DG investigates such matters by seeking information from competitors, customers and other stakeholders in the industry
• Previously, CCI has also started probe into Apple for abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system.
• Although the report in itself is not binding on the CCI, which can choose to rule against the report. However, the CCI ruling differs from what’s in the DG’s report only in the rarest of cases.

What are the major highlights of the CCI report?

• Unfair practices: The report highlighted that Google has been imposing an “unfair and discriminatory" conditions in violation of India’s regulations.
• Forced exclusion: It said the company’s conduct in India is leading to “denial of market access" to other apps that use the government’s unified payments interface (UPI) payments system.

What is the issue?

• Abuse of dominance: The complaint against Google is part of a global discourse against the rules enforced by the company on developers. It requires app makers to use its built-in payment systems to sell apps and services, and hence pay a fee to Google.
• Global issue: Since the case began, both Japan and South Korea have directed app store owners like Google and Apple to stop this practice. Competition regulators around the world, including the CCI, are expected to at least direct platform owners to stop forcing developers to use their own payment modes.
• Killing competition: Both companies have cut the fees they charge over the past two years. Apple has said it will allow third-party payments for so called “reader apps", while Google started testing third-party payments with music streaming firm Spotify last month.
• Market monopoly: A report by market research firm Sensor Tower in December 2021 said users spent $133 billion on apps last year, across Apple and Google’s stores.

What are the implications of the report?

• Review by CCI: The CCI will review the DG’s report and send it to the parties involved in the case for their comments who can challenge the report from the DG.
• Only recommendatory: In legal terms, the DG’s report is only a recommendation to the competition regulator and doesn’t automatically mean Google will be found guilty.

Sources:

• What does CCI probe entail for Google and Apple in India?: