Friday, February 3, 2023

Indian startup association ADIF elaborates on why it doubts Google's compliance with Competition Commission of India's two Android antitrust rulings

This is a follow-up to a January 30, 2023 post, Indian startup association calls out 'Google's strategy to disincentivize ... alternative payment solutions' by making alternatives even more expensive on the bottom line. The Alliance for Digital India Foundation (ADIF), which unlike Google's "Developers Alliance" and Apple's ACT represents real app developers, has meanwhile "d[u]g deeper" and laid out with greater specificity what's wrong with the changes to its Android terms and practices that Google announced in its January 25, 2023 post, Updates to Android and Google Play in India.

If you are interested in the Indian situation--we're talking about the largest Android market in the world by user numbers and (at elast among reasonably large markets) also by market share--I recommend that you subscribe to ADIF's updates via SubStack, read my previous post on ADIF's criticism of Google's announced changes (which contains links to my previous commentary on the Indian cases), but you're also invited to just read on.

ADIF does what I missed in virtually every media report on Google's announcement: they distinguish between the two underlying Indian antitrust rulings. ADIF refers to the September 2022 decision as the "Google Android Bundling Case" and to the ruling that issued the following month as the "Google Play Store Billing Case."

I'm now going to comment on ADIF's specific allegations. For the avoidance of doubt, I much prefer Android over iOS, but I'm also an app developer who brought complaints over both Apple and Google. Still, I try to offer honest and reasonable analysis, and sometimes agree with Google, such as that it should not have to fundamentally change its entire Android business model while those CCI rulings are being appealed. However, if enforcement goes forward, Google must comply even if I'd have favored a partial stay, and ADIF raises valid questions about compliance:

Google Play Store Billing Case

  • "Google has made available the alternative payments limited only to purchase of in-app digital content and not app downloads."

    It is correct that Google's blog post only refers to alternative billing systems for "in-app digital content" without mentioning download fees. App developers make more money from in-app purchases than download fees, but pre-download purchases are still substantial. It would be technically much more difficult for Google to support alternative payment methods prior to a download because app developers would have to somehow link their preferred payment methods to the Google Play Store, which is a Google app. Google could argue that developers who desire to bypass Google Play Billing have to offer such alternative payment systems on their website, and then let users "sideload" (install apps directly, without going through the Google Play Store).

  • "Though Google has allowed third-party payments through ‘User Choice billing system’, Google would be imposing price-related conditions (through charging commission) on app developers, which is unfair, unreasonable and discriminatory."

    That was the first issue ADIF raised, and I discussed it in my previous post on Google's (non-)compliance. In order for User Choice Billing to work, there has to be a real incentive for end users, i.e., lower prices because of the app tax being evaded. Apple likes to play the same game in the Netherlands (and will likely try it elsewhere).

  • "Also, Google is silent on multiple CCI remedies shared in its verdict, relating to ‘non-imposition of Anti-steering Provisions on app developers’, ‘having a clear and transparent policy on data that is collected on its platform, its usage & the potential sharing with app developers’ and the data so collected not to be leveraged by Google to further its competitive advantage’."

    That is true, but Google's blog post didn't claim to be exhaustive. It said: "Here are some key changes ..." (emphasis added). I agree with ADIF that Google must comply with those other parts of the ruling, too, and I'm confident that neither the CCI nor ADIF will let Google off the hook, but I wouldn't fault Google for having focused in its blog post on changes that can be explained more easily than what actually requires the publication of a whole new policy, such as a policy on data collection.

Google Android Bundling case

  • "As per the details shared by Google on its blogpost, it does not address the issue of freedom to be given to OEMs for placement of apps."

    In my summary of the related one of the two CCI decisions, I described this part of the order as follows:

    no more "package deal" for preinstallation of Google apps (such as search, Maps, YouTube, and GMail), but à la carte choice for OEMs and free arrangement on home screen

    ADIF is right that Google's blog post does not address this part, but again, that post was not meant to be exhaustive. Sadly, I also have my doubts that Google really will afford Android device makers all those freedoms without all sorts of strings attached, but we'll see and device makers will be in a better position than app developers like ADIF's members or I to raise a potential non-compliance issue.

  • "Also, the blogpost does not give any clarity on whether users will be able to easily change the default settings in their devices, multiple times with ease."

    I share ADIF's concern (between the lines) that Google will probably put some roadblocks in the way of changes to the default settings, but let's see.

  • "Google has not given any assurance that it will not continue showcasing multiple security warnings which would discourage an average user from downloading any app through side loading."

    On this one I would even go further than ADIF: when I read in Google's blog post that they want to "ensur[e] users understand the potential security risks," I'm pretty sure Google will scare users away from sideloading before they start and/or out of it when they're in the process of installing an app. I already said so in a previous post, and that passage was quoted on Twitter by EU antitrust blogger (@WavesBlog) Simonetta Vezzoso:

  • "Further, the blogpost has not stated that Google will not impose AFA [Anti-Fragmentation Agreement] and ACC [Android Compatibility Commitment] obligations on OEMs, though it mentions updating the Android compatibility requirements."

    Those changes did not lend themselves to being explained in a blog post: Google will have to change some rather complex and detailed sets of rules. From an app developer perspective, I'm not against anti-fragmentation measures as they are also in my interest if reasonably defined and applied. I just don't want anti-fragmentation to be used as a pretext for anticompetitive purposes.

  • "Also, Google is silent on multiple CCI remedies shared in its verdict, relating to ‘not denying access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors’, ‘not offering any monetary/ other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services or not selling smart devices based on Android forks’ and ‘not restricting un-installing of its pre-installed apps by the users.’"

    I definitely agree on the last part: Google should have stated clearly that users will be able to uninstall pre-installed apps as they please, which I think is no problem as long as those apps can easily be reinstalled should their removal break other apps that rely on them. As for the negative remedies-- "don't do this, don't do that"--I think there's nothing that Google would have to explain: they just have to desist from those practices, and we can only raise issues if they engage in them regardless.

All app developers--in India and (like in my case) beyond--are indebted to ADIF for its vigilance. I'm sure ADIF won't let Google get away with anything less than full compliance. Some of the issues they've raised are sufficient to argue that Google is presently out of compliance. Other issues fall into the "let's see" category, with some being more likely than others to raise serious issues going forward.

A quick recap of other recent antitrust developments relevant to mobile app developers: