India launches investigation over concerns about Google Pay’s market dominance

The Competition Commission of India (CCI) has launched an investigation into Google Pay (GPay) to probe allegations of potential abuse of dominant position in India’s burgeoning digital payments sector. Executives from multiple payment companies, speaking on condition of anonymity, revealed that the CCI’s investigation is focused on whether Google Pay has engaged in anti-competitive practices that could stifle competition in the market.

According to sources familiar with the matter, the CCI has begun conducting face-to-face interviews with key industry players, including representatives from PhonePe and Paytm Payments Bank. These interviews are part of the CCI’s efforts to determine whether Google Pay is providing users with a genuine choice between payment instruments, apart from its own platform. The commission is also investigating whether Google Pay is using user data from its broader ecosystem to unfairly promote its payment services over its competitors.

The investigation is also aimed at determining whether Google Pay complies with India’s zero merchant discount rate (MDR) policy, which prohibits merchants from charging fees for digital transactions.

Read more: India launches antitrust investigation into Google over in-app billing dispute

The investigation, initially launched by the CCI last November, entered its formal phase in January with the appointment of an additional director general dedicated to the matter. Sources suggest the CCI’s approach mirrors elements of the European Union’s General Data Protection Regulation (GDPR), focusing on potential data-sharing practices across Google’s suite of products that could provide an unfair advantage to its payment service.

“One of the key areas of scrutiny is whether Google Pay is using an app bundling strategy with the Android operating system, as well as potential manipulation of search results where Google Pay appears first for payment-related queries,” revealed one of the executives involved in the talks with CCI.

In addition, concerns have been raised about Google’s use of platforms such as YouTube and the Play Store to advertise its payment services, using personalised advertising strategies that could unfairly affect the competitive situation in the market.

Source: Live Mint