Google pauses Play Billing changes in India, for now
It remains to be seen whether Google will make a tweaked push for a billing system implantation at a later date for Indian app developers, or follows the Korea model
Google has pressed pause on plans to enforce the Google Play billing system for in-app transactions, in India. This comes days after the Competition Commission of India (CCI) imposed multiple fines on the tech giant. Google said the plans to make the Google Play billing system mandatory for Indian app developers has shifted to the backburner for now, but also doesn’t indicate any timelines on when the process may be updated again, albeit with potential changes.
“Following the CCI’s recent ruling, we are pausing enforcement of the requirement for developers to use Google Play’s billing system for the purchase of digital goods and services for transactions by users in India while we review our legal options and ensure we can continue to invest in Android and Play,” said Google, in an official statement.
For now, Indian app developers will not have to mandatorily implement and then route, all transactions made with consumers, via Google’s own payment system.
Specifics of the penalties: Android and domination
A few days ago, the CCI first imposed a ₹1,338 crore penalty on Google for what it classified as “abusing its dominant position in multiple categories related to Android mobile device ecosystem” in India. Subsequently, a ₹936.44 crore penalty was added for “abusing its dominant market position with respect to its Play Store policies”, which included the clause for the mandatory use of the Google Play billing system.
During the CCI investigation, which had been in progress for a year, Google had given Indian app developers an extension on the mandatory implementation of the Google Play billing system, within their apps listed on the Google Play Store. “Developers in India were given an additional extension until October 31, 2022 to comply due to unique circumstances with the payments landscape in the country,” says Google.
Play Store billing: One rule for all?
Incidentally, Google’s billing policies for app developers aren’t standardized globally. While developers in most countries were forced to implement the changes by June this year (the payments policy set the wheels in motion in 2020), India was one of the outliers. So is South Korea.
In Korea, Google was directed to provide the option of alternative payment systems for Play Store developers to choose from. A law, which came into force late last year, banned app platforms from monopolizing payment methods. That forced tech giants including Google, to widen the options available to developers, for accepting payments for app downloads, services, subscriptions, and in-app purchases.
The Korea Fair Trade Commission (KFTC) had also imposed a fine of $176.64 million on Google in September last year, for antitrust practices. “The requirement to use Google Play’s billing system applies for in-app digital content purchases for users outside of India,” the tech giant insists.
What does this mean for consumers and developers?
First and foremost, for developers, this means some reprieve from mandatorily using Google own billing systems for all transactions made for and within the apps they’ve published on the Google Play Store. This means, an ability to bypass the mandatory ‘cut’ that the platform, which in this case would be Google, would take from each transaction.
“Making access to the Play Store, for app developers, dependent on mandatory usage of GPBS for paid apps and in-app purchases constitutes an imposition of unfair condition on app developers,” the CCI had noted, in its order, while noting that such practices are discriminatory, denies market access for payment aggregators and reduces innovation incentives.
For consumers, nothing changes in terms of how you continue to buy apps from the Play Store for Android phones and tablets. Transactions that happen later, including buying in-app elements or paying regularly for subscriptions, will also work as they always have.
Why do tech giants insist on limited billing options?
For Google, Apple, and Microsoft, which allow app developers a platform to host apps and reach out to millions of users, there is the expectation to earn a fee from each transaction done on their platform. In this case, it is Google’s Play Store, the application store for Android devices.
By routing all transactions through their billing systems, they can calculate and collect a share of each transaction. This wouldn’t be possible if the transaction is routed through a third-party payment system. Google has a tiered system for transaction shares – for app developers that earn up to $1 million, the share will be 15% for each sale or transaction made.
This will increase to a flat rate of 30% share for each transaction, once the revenues cross $1 million. The tiered system came into effect in May last year.
It remains to be seen how Google, if at all, responds to the CCI penalties for Android’s position of domination which forced phone makers to use Google’s own suite of apps on their phones mandatorily, for instance.