Monday, January 30, 2023

Indian startup association calls out 'Google's strategy to disincentivize ... alternative payment solutions' by making alternatives even more expensive on the bottom line

Reports on Google complying with the Competition Commission of India's Android decision(s) are greatly exaggerated. Let's do a reality check.

I don't mean to bash "the media" because I appreciate how hard it is for tech reporters to keep track of competition enforcement processes with the limited amount of time they can devote to a single topic. Also, I honestly believe many of them do a much better job reporting on those cases in a way that a horizontal audience understands than I (with my focus on a vertical audience) could.

But Google is playing games with the media. It announces "compliance" knowing that the average reporter won't have the time to figure things out before the news cycle is over.

Another issue is not Google's fault, though: there are actually two CCI Google cases that involve issues of relevance to app developers (one ruling came down in September 2022, the other--which affords app developers further protection against abuse--the following month), but too many of the reports I see talk about developments in one of those cases without clarifying the connection with the other (and stating clearly which of the two cases a report relates to, though it can be inferred from the amount of the fine if that one is stated).

In one of those two cases, the Supreme Court of India has allowed enforcement to begin, though Google's appeal will have to be resolved soon. I took the position that some of Google's concerns over having to change its Android business model in India while appealing the decision are not unfounded. Last week Google announced the following changes that it suggests bring it into compliance with the CCI decision(s):

"OEMs will be able to license individual Google apps for pre-installation on their devices.

"Android users have always been able to customize their devices to suit their preferences. Indian users will now have the option to choose their default search engine via a choice screen that will soon start to appear when a user sets up a new Android smartphone or tablet in India.

"We’re updating the Android compatibility requirements to introduce changes for partners to build non-compatible or forked variants.

"User choice billing will be available to all apps and games starting next month. Through user choice billing, developers can offer users the option to choose an alternative billing system alongside Google Play’s billing system when purchasing in-app digital content.

"Android has always supported the installation of apps from a variety of sources, including via sideloading, which involves app downloads directly from a developer’s website. We recently made changes to the Android installation flow and auto-updating capability for sideloaded apps and app stores while ensuring users understand the potential security risks."

That set of changes relates to both CCI decisions. For example, only the first ruling addressed pre-installation by OEMs, and only the second order addressed in-app payments.

At this point it is actually unclear whether any of the steps taken by Google in response ot the CCI's competition enforcement will put an end to Google's monopoly abuse. For example, a streamlined "sideloading" flow that still scares users out of installing such apps may not change much about the extent to which users install apps directly instead of from the Google Play Store.

Another deficiency was immediately clear to me, which is why I wrote the following on Twitter (please forgive the autocomplete mistake in that tweet: I meant "charges", not "charge"):

I am glad to see that the Alliance of Digital India Foundation (ADIF) has meanwhile criticized Google's announcement the same way and in fact even goes beyond: ADIF says "[this] is nothing but Google’s strategy to disincentivize app developers from using alternative payment solutions by ensuring the app developers pay more for not using GPBS [the Google Play Billing System]." ADIF rightly points to the fact that ADIF addressed this by prohibiting Google from imposing any non-FRAND condition on app developers.

I've already criticized the User Choice Billing scheme on several occasions (the following is not even exhaustive):

Also, I welcomed the fact that the Dutch Autoriteit Consument & Markt (ACM; Authority for Consumers & Markets) is trying to thwart a similar scheme by Apple.

India is a key market because Google has a 97% market share there, meaning one doesn't even need a single-brand market definition to find Google to have a superdominant market position.

In other Google Android antitrust news, three dozen state AGs, Epic Games, Match Group, and class-action plaintiffs have presented some smoking guns for Google's spoliation of evidence to Judge James Donato of the United States District Court for the Northern District of California.