India orders Google to allow third-party payments

India's antitrust body has said that Google should not restrict app developers from using third-party billing or payment processing services in the country. The move came after it fined the US giant $113 million for anti-competitive practices.

The Competition Commission of India (CCI) said. Alphabet Inc's Google used its "dominant position" to force app developers to use its in-app payment system_ noting the sale of in-app digital goods is a key means for developers to monetise their work.

The CCI's move on Tuesday is the latest setback for Google in one of its priority markets_ where it was fined another $162 million by the watchdog on Thursday for anticompetitive practices related to its Android operating system_ and was asked to change its approach to its Android platform.

Google has not responed yet following the new decision imposed by CCI. The US giant can appeal the orders in an Indian tribunal.

Other than the fine_ Google was asked to adopt 8 remedies or operations adjustments within three months_ including not restricting "app developers from using any third-party billing/ payment processing services_ either for in-app purchases or for purchasing apps_" the 199-page CCI order said.

Google should ensure complete transparency in communicating with app developers and details about service fees charged_ the CCI order added.

The order would come as a major relief for Indian startups and smaller companies that have long objected to Google's policy of mandatorily imposing use of its own payments system on app developers.

The investigation into Google's payment ecosystem was started in 2020_ after an antitrust case was filed against Google. The watchdog kept the identity of the complainant confidential on his request.

Google has faced criticism globally_ including in South Korea_ for mandating software developers using its app store to use a proprietary in-app payment system that charge commissions of up to 30% on purchases made within an app. Of late_ Google has begun to allow alternative payment systems in more countries.

Google's Android operating system powers 97% of India's 600 million smartphones_ according to Counterpoint Research.