Google Pay is under the scanner of Competition Commission (CCI)

The Competition Commission of India (CCI) has decided to pursue investigation on two issues - these relate to “exclusivity regarding the mode of payment for the purchase of apps and in-app purchases” and “pre-installation and prominence of Google Pay on Android smartphones”. It will also start the investigation into whether search engine behemoth Google “unfairly privileged” Google Pay, its UPI-based payments app.

The order of probe comes following weeks of agitation from Indian startup founders, including Paytm CEO Vijay Shekhar Sharma, who even took the matter to the government over Google’s “arbitrary” policies in India. It was triggered by Google mandating its billing system for in-app purchases on apps in the business of subscription, education, dating and others.

Now the director general of CCI will start the investigation and submit a report within 60 days from the receipt of the order. CCI has prima facie found Google’s billing policy, which has been postponed in India to April 2022 following a backlash, “unfair” and that it can increase cost for Google’s competitors’ abilities in the market.

It has been confirmed that the CCI will find that Google Pay operates in an extremely competitive environment, and owes its success to its ability to offer consumers a simple and secure payments experience. 

CCI has agreed to treat UPI as a “distinct relevant market”, given its unique features and fast growth compared to other instruments like NEFT and IMPS. For example, UPI just clocked 2 billion transactions last month.

While CCI has agreed these areas warrant an investigation, it also rejected an appeal to investigate allegations in areas such as search result manipulation bias to favour Google Pay, prominent placement of Google Pay in its app store, and search advertisement manipulation on the app store.