Google recently announced that Indian developers with an app on Google Play Store must give the company a cut of as much as 30% of several app-related payments. Photo: AFP

US technology giant Google is facing scrutiny by India’s competition watchdog over its alleged unfair business practices with regard to its digital payment platform Google Pay. The Competition Commission of India has ordered its director general to carry out a detailed investigation into Google’s alleged anti-competitive practices with respect to Google Pay.

In its 39-page order, the watchdog noted that Google has violated various provisions of Section 4 of the Competition Act, which pertains to the abuse of a dominant market position. “The said conduct of Google amounts to imposition of unfair and discriminatory conditions, denial of market access for competing apps of Google Pay and leveraging on the part of Google, in terms of different provisions of Section 4(2) of the Act,” the order said.

The watchdog will review claims that Google “unfairly” skews the search results on the Play Store in favor of Google Pay app over others. The investigation has been ordered against five entities – Alphabet Inc, Google LLC, Google Ireland Ltd, Google India Pvt Ltd and Google India Digital Services Pvt Ltd.

The informant, who has not been identified, alleged that in addition to Google Play Store’s billing system favoring Google Pay app, in-app purchases for apps downloaded through Play Store are also mandated to support Google Pay service “if they want to be listed on the Play Store,” TechCrunch reports.

Google Pay competes with Walmart’s PhonePe, Paytm, and others in the Indian market. They all operate on the Unified Payments Interface – a payments platform built by large banks in the country. Last week, Facebook-owned messaging app WhatsApp rolled out its payments facility WhatsApp Pay and it hopes to leverage the popularity of its messenger app to build up its business.

On September 18, Google removed the Paytm app and its fantasy games app Paytm First Games for a few hours from the Play Store, citing violations of its gambling policies. Paytm described the ban as “arm-twisting,” and said Google’s action was unjustified. It alleged that Google didn’t provide an opportunity to explain its new cashback sticker feature related to the Indian Premier League cricket tournament.

A host of startups, including Paytm, Policybazaar and Sharechat, later expressed concern about Google’s “monopolistic” hold on India and the unfair enforcement of Play Store’s guidelines in the country. They also said they were working to form an alliance to launch their own platform to host local apps in order to reduce their reliance on Google’s Play Store and Apple’s App Store.

The Indian startups are also upset over Google’s reported plan for a new payment norm from next year. Developers with an app on Google Play Store will have to give the company a cut of as much as 30% of several app-related payments. This will include entertainment, dating and fitness apps.

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