Indian Broadcasting, and Digital Foundation & Another And Alphabet Inc. & Others

Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 1 COMPETITION COMMISSION OF INDIA Case No. 37 of 2022 In Re: People Interactive India Private Limited Informant And Alphabet Inc. Opposite Party No. 1 Google LLC Opposite Party No. 2 Google India Private Limited Opposite Party No. 3 Google India Digital Services Pvt. Ltd. Opposite Party No. 4 WITH Case No. 17 of 2023 In Re: Mebigo Labs Private Limited Informant And Alphabet Inc. Opposite Party No. 1 Google LLC Opposite Party No. 2 Google India Private Limited Opposite Party No. 3 Google India Digital Services Pvt. Ltd. Opposite Party No. 4 WITH Case No. 27 of 2023 In Re: Indian Broadcasting and Digital Foundation Informant No. 1 Indian Digital Media Industry Foundation Informant No. 2 And Alphabet Inc. Opposite Party No. 1 Google LLC Opposite Party No. 2 Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 2 Google India Private Limited Opposite Party No. 3 Google Asia Pacific Pte. Ltd. Opposite Party No. 4 Google Ireland Ltd Opposite Party No. 5 CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Present For People Interactive India Private Limited (PIIPL) : Mr. Jayant Mehta, Sr. Advocate with Mr. Abir Roy, Mr. Aman Shankar, Mr. Vivek Pandey, Mr. Udit Dedhiya and Mr. Sasthibrata Panda, Advocates For Mebigo Labs Private Limited (Mebigo) : Mr. Abir Roy, Mr. Aman Shankar, Mr. Vivek Pandey and Mr. Sasthibrata Panda, Advocates For Indian Broadcasting and Digital Foundation (IBDF) and Indian Digital Media Industry Foundation (IDMIF) : Mr. Rajshekhar Rao, Senior Advocate with Ms. Pallavi Shroff, Mr. Yaman Verma, Ms. Parinita Kare, Mr. Ritwik Bhattacharya, Mr. Rohan Bhargava, Mr. Shivek S. Endlaw, Advocates along with Mr. Rishi Sharma and Ms. Siboney Sagar, Representative of IBDF/IDMIF For Alphabet Inc., Google LLC, Google Ireland Limited, Google India Private Limited, Google Asia Pacific Pte. Ltd. and : Mr. Sajan Poovayya, Senior Advocate with Mr. Karan Singh Chandhiok, Ms. Deeksha Manchanda, Ms. Avaantika Kakkar, Mr. Kaustav Kundu, Mr. Tarun Donadi, Ms. Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 3 Google India Digital Services Private Limited (collectively, ‘Google’/ ‘OPs’) Bhavika Chhabra, Mr. Palash Maheswari, Ms. Raksha Agrawal, Mr. Aditya Sahagal, Advocates along with Mr. Thomas Bohnett, Ms. Aditi Gopalkrishnan and Ms. Richa Srivastava, Representatives of Google. Order under Section 26(1) of the Competition Act, 2002 1. The Informations in the captioned cases have been filed under Section 19(1)(a) of the Competition Act (hereinafter, `the Act') against Google alleging contravention of Section 4 of the Act, on its part. 2. As the subject matter of all these Informations is substantially the same, this common order is being issued in respect of allegations made in the same. 3. Case No. 37 of 2022 has been filed by People Interactive India Private Limited (PIIPL) which is stated to be an internet company and operates brands such as Shaadi.com and Sangam.com and providing online matchmaking classified service across the globe. 4. Case No. 17 of 2023 has been filed by Mebigo Labs Private Limited (Mebigo) which is stated to be an internet company that owns the brand such as Kuku FM and provides audio content such as audiobooks, stories, originals and similar categories through apps and website across the globe. 5. Case No. 27 of 2023 has been filed by Indian Broadcasting and Digital Foundation (IBDF) and Indian Digital Media Industry Foundation (IDMIF). IBDF is stated to be a leading association which inter alia works towards the interests of the Indian television industry and the digital media industry, including but not limited to online curated content publishers (OCCPs)/over the top (OTT)/video on demand (VOD) application developers. IDMIF is stated to be a subsidiary of IBDF representing OCCP members who operate/manage applications/websites that reach millions of Indian consumers. Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 4 6. Alphabet Inc. is a multinational technology conglomerate holding company. It was created through a restructuring of Google on 02.10.2015 and became the parent company of Google and several former Google subsidiaries. Google LLC is a Delaware (USA) based limited liability company and wholly owned subsidiary of Alphabet Inc. Google’s core products and services, including its proprietary digital store for mobile based applications, i.e., Google Play Store, and its proprietary OS, i.e., Android OS are developed, provided, and administered by Google LLC. Google Ireland Limited (Google Ireland) is a legal entity formed under the laws of Ireland. Google Asia Pacific Pte. Limited, a subsidiary of Google LLC, is incorporated in Singapore and it provides management services on a contract or fee basis. Google Asia Pacific offers online content services for users, advertisers, and other content providers. Google India Private Limited is a company incorporated under the Companies Act, 2013. It has been appointed by Google Asia Pacific Pte. Ltd. as a non-exclusive authorised reseller of online advertisement space in India as provided by Google Asia Pacific Pte Ltd through Google Ads program to advertisers in India. All these entities are collectively referred to as ‘Google’. 7. The Informants are primarily aggrieved with Google’s updated payment policies in relation to its proprietary app store (i.e., Google Play Store), which is alleged to be in violation of Section 4 of the Act and is stated to be impacting several stakeholders, including app developers, payment processors, and users alike. 8. It has been averred that for app developers to be able to distribute their apps through the Google Play Store, they are inter alia required to accept Google Play Store’s non-negotiable payment policies. Google Play Store’s payment policies previously mandated that: (a) all payments for paid app downloads and in-app purchases (IAPs) on digital service apps, must only be processed through Google’s own payment processing system (i.e., Google Play Billing System, (GPBS)); and (b) app developers must pay a commission of 15% / 30% to Google for each such transaction, inter alia as consideration for the payment processing services Google is offering to these app developers. It has been further stated that several terms of Case Nos. 37 of 2022, 17 of 2023 and 27 of 2023 5 Google’s payment policies were earlier found to be anti-competitive by the Commission vide an order dated 25.10.2022 passed under Section 27 of the Act, in Case Nos. 07 of 2020, 14 of 2021 and 35 of 2021 (‘Google Play Case’). In this case, Google was found to have contravened various provisions of Section 4 of the Act, as detailed therein. 9. In September 2022, Google introduced ‘User Choice Billing’ pilot wherein certain changes were made to Google Play Store’s payment policies. Amongst others, Google announced that app developers offering digital content can offer alternative billing systems (ABS) alongside GPBS. Further, for transactions which are processed through GPBS (on apps offering digital content), Google will continue to impose a 15% / 30% service fee / commission. Where a user avails an ABS to complete any transaction on these apps, the rate of commission payable to Google by the app developer would be reduced by 4% (i.e., reduced to 11% from 15%; or 26% from 30%, as the case may be). It has been averred that in the UCB system, Google is offering an illusory choice for users to opt for an alternative billing option next to Google Play's billing system. 10. The updated policies of Google have been alleged to be discriminatory and unfair which skew and disrupt competition in the downstream app markets and continue to favour Google’s own apps and cement Google’s position in the payment processing market as well. It has been further alleged that Google imposes a service fee / commission model wherein it admittedly makes only 3% of the app developers bear the entire cost of all 100% of the app developers on the Google Play Store by charging them an exorbitant service fee / commission without any commensurate additional services. Further, Google’s service fee is also alleged to be excessive as this commission / fee has no reasonable economic relation to the services provided by Google. 11. It has been stated that Google’s discriminatory policies and excessive fee / commission is also likely to cause an appreciable adverse effect on competition (AAEC) in other markets. As a result of Google’s discriminatory conduct, a limited