RBI Initiates Investigation Against Google Play's Billing System

The Reserve Bank of India (RBI) has reportedly initiated an investigation against Google Play's Billing system, following a complaint lodged by Kolkata-based Hoichoi Technologies. The investigation is centered around alleged violations of the Payment and Settlements Systems Act.

Allegations and Response

According to a recent report by Business Standard, Hoichoi Technologies has raised concerns regarding the operation of several of Google's aggregator platforms in India. These platforms, despite their operations in India, are registered in countries such as Singapore and the US. The crux of the matter lies in the legality of Google Play's Billing system (GPBS).

Google, however, maintains that its billing system is not a payment system. A spokesperson for the tech giant reportedly stated that the Google Play billing system is not a payment system, and they are responding to the concerned authorities with regard to their queries.

Also Read: How Does Google Own You? Understand the Grand Google Geopolictics Strangling Small Biz

RBI's Response and Legal Proceedings

The RBI has reportedly engaged in discussions with Google executives and has sought additional information regarding the matter. 

The media report revealed that Hoichoi Technologies has refrained from commenting on the issue due to its sub judice status. The company has lodged a writ petition regarding the matter at the Calcutta High Court and stated its intention to share its views once the court order is pronounced.

 Google Play's Billing System

Google Play's billing system enables app developers to sell digital products and content within their Android applications. This system allows developers to offer both one-time products and recurring subscriptions, enhancing their revenue streams.

 Competition Commission of India's Involvement

This development comes week after the  Competition Commission of India (CCI) ordered an investigation into Google Play Store's billing policy. The CCI's decision follows complaints from various Indian firms alleging unfair service fees imposed by Google on app developers.

The investigation was prompted by concerns raised by startups, asserting that Google's practices were stifling the growth of the app market. Additionally, the CCI noted that Google's policies were not in compliance with its earlier ruling, which allowed third-party billing services for in-app purchases.

Legal Challenges Ahead

Meanwhile, in response to the CCI's order, startups are planning to challenge the decision, seeking interim relief during the pendency of their plea. They intend to file appeals before the National Company Law Appellate Tribunal in the coming days.

Several informants, including Shaadi.com, KukuFM, and Indian Broadcasting & Digital Foundation (IBDF), have alleged discriminatory practices by Google Play Store. They argue that the exorbitant fees and commissions imposed by Google hinder fair competition and innovation within the digital marketplace.

The applications filed by these entities highlight concerns regarding the fees charged for app downloads and in-app purchases, with fees reaching up to 26 percent. These allegations add to the growing scrutiny faced by Google over its payment policies.

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