The Reserve Bank of India (RBI) has initiated an inquiry into Google Play's billing system over purported breaches of the Payments and Settlements Systems Act, according to undisclosed sources familiar with the matter, reported Business Standard. The investigation started after Kolkata-based Hoichoi Technologies filed a complaint against the tech giant.
The complaint concerns the functioning of multiple aggregator platforms operated by Google in India, which are registered in overseas locations such as Singapore and the United States.
Report cited a spokesperson from Google saying, "The Google Play billing system is not a payment system, and we are addressing queries from the relevant authorities." Executives from Google have reportedly met with the RBI and provided additional information upon request.
An email inquiry to the RBI did not yield a response, the report added.
Hoichoi Technologies declined to comment, citing the sub judice nature of the matter, and indicated it would express its stance following the court's verdict. The company has filed a writ petition at the Calcutta High Court concerning the issue.
Industry insiders indicate that Hoichoi is contesting the legality of GPBS.
Google Play's billing system enables app developers to sell digital goods and content within their Android applications, including one-time purchases and recurring subscriptions.
Recently, the Competition Commission of India (CCI) initiated an investigation into Google Play Store's billing policy following allegations of imposing an "unfair service fee" on app developers, prompted by pleas from multiple Indian firms.
In its 21-page order, the CCI highlighted that Google's actions limited resources for app developers to improve or expand their offerings, thereby restricting market growth.
Several start-ups had lodged complaints with the CCI, alleging that the tech giant was not adhering to its earlier directive of permitting third-party billing services for in-app transactions.
Despite the ongoing scrutiny, the Commission recently denied interim relief that would have halted Google from imposing service fees on app developers until a final verdict is rendered, providing a temporary respite for the tech giant.
