(Adds comment from startup CEO, background; changes dateline from BENGALURU)
By Aditya Kalra and Munsif Vengattil
NEW DELHI, Nov 1 (Reuters) – Alphabet Inc’s Google is pausing the enforcement of a policy that requires app developers in India to use its proprietary billing system for selling digital goods, following a ruling by the country’s antitrust body.
Google had previously set an extended deadline of Oct. 31 for developers in India to integrate apps with its Google Play billing system, which collects a commission that ranges from 15%-30% for each sale.
The Competition Commission of India (CCI), however, ordered Google last week not to restrict app developers from using third-party billing or payment processing services in India, while fining it $113 million.
In a website update to developers on Tuesday, Google said the requirement to use its billing system still applied for users outside the country, adding it was reviewing legal options in India.
Last week, Reuters reported that Google was planning a legal challenge to block a separate CCI ruling that demanded a change in its approach to the Android operating system.
Globally, Google and Apple have faced criticism that the fees charged at their mobile app stores are needlessly high and cost developers collectively billions of dollars a year. Both have lowered fees in many circumstances and have said they are needed to fund a safe and secure mobile ecosystem.
“Today’s decision helps protect our revenues. We hope that Google implements this permanently as it’s not good for Indian digital startups – it amounts to digital tax for us,” said Murugavel Janakiraman, the CEO of BharatMatrimony Group, which run various apps that help people find life partners.
Nearly 97% of India’s 600 million smartphones run on Google’s Android mobile operating system, and startups have banded together in the past to say the payment policy hurt their businesses.
Google on its part has begun to allow alternative payment systems in countries including India on a pilot basis, charging lower commissions. (Reporting by Aditya Kalra and Munsif Vengattil in New Delhi and Praveen Paramasivam in Bengaluru; Editing by Rashmi Aich and Mark Potter)