The National Company Law Appellate Tribunal (NCLAT) has upheld the Competition Commission of India’s (CCI) ruling that Google’s Play Store payment system is anti-competitive.

“We welcome the NCLAT’s decision to set aside certain directions in the CCI’s order and substantially lower the penalty. Google is committed to supporting the growth of Indian developers and contributing to a thriving app ecosystem for both developers and users in India. We will continue to comply with all applicable laws and regulations as we review the NCLAT’s judgment and evaluate our legal options,” Google stated.

As part of its decision, NCLAT upheld CCI’s directive requiring Google to allow alternative payment systems for apps and in-app purchases. It also confirmed that Google cannot discriminate against other UPI-based payment systems for these transactions.

However, the tribunal reduced the penalty imposed by CCI from ₹936 crore to ₹216 crore, with a 30-day deadline for payment.

Additionally, NCLAT has set aside CCI’s directive requiring Google to share user data with developers and removed restrictions on its use of collected data.

In October 2022, the CCI slapped a penalty of ₹936 crore on Google, charging it with abusing its dominant position regarding Play Store billing policies.

CCI found Google to be anti-competitive for forcing app developers to exclusively and mandatorily use Google Play’s Billing System for apps and in-app purchases.

It held that this policy resulted in a denial of market access, as developers who opted out of Google’s payment system were not allowed to list their apps on the Play Store, thereby losing access to a vast pool of potential customers

Google challenged the CCI order in NCLAT. In January 2023, NCLAT refused to grant interim relief to Google and directed the tech giant to deposit 10% of the Rs 936 crore penalty.

The Supreme Court also declined to provide interim relief.

In January this year, NCLAT reserved its judgment on Google’s plea against the CCI order.

Interestingly, after NCLAT and the SC refused to stay the CCI order, Google tweaked its payment system and allowed alternate payment options.

Prior to the CCI order, Google charged developers a 15-30% commission on revenue. Following the ruling, it introduced a service fee of 11-26% for transactions processed through alternative billing systems.

Multiple start-ups have claimed that a fee charged by alternate payment system providers, clubbed with “exorbitant” 11-26% service fee charged by Google, takes the total payable to levels higher or as high as Google’s original payment system.