In April last year, Indian law enforcement agencies seized Xiaomi Group's deposits in India, amounting to about 4.8 billion yuan. The reason given by India was that Xiaomi Group illegally remitted money to foreign entities by pretending to pay copyright fees, suspected of money laundering, so it froze the money. Xiaomi said that it is operating legally, Xiaomi has established a subsidiary in India, and has also built a factory, only responsible for the production and sales of Xiaomi mobile phones in India, not responsible for research and development. The remittance was to pay for patents, licenses and other fees of companies such as Qualcomm, and there was no money laundering, and an appeal was filed.
Just this month news broke in India that after a year of appeal, the Karnataka High Court finally ruled to dismiss Xiaomi's appeal by confiscating 55,512.7 million rupees (about 4.8 billion yuan) of Xiaomi India for violating the Foreign Exchange Management Act (FEMA). It means that Xiaomi basically can't get this money back!
However, just recently, the Indian government once again extended a "helping hand" to Google
According to Reuters, a number of companies, including Match Group, asked the Competition Commission of India to investigate Google's new User Choice Billing System (UCB). Although Google launched UCB in response to EU and Indian allegations that using Google's game billing system (GPBS) is unfair, companies using UCB are still charged between 11% and 26% commissions, in violation of previous directives. Google explained that these service fees are used to maintain the Play Store and provide developer tools and analytics services. India's Competition Commission has asked Google to respond to the allegations within four weeks and provide details on the UCB program, regulations related to in-app payment systems, and policies for sharing user and app developer data.
The allegations relate to some of Google's billing schemes in the app store, mostly related to games. These billing schemes are considered unfair to developers and users because they require developers to pay Google a fairly high commission and pass these fees on to users. Since these fees are opaque and often mandatory, many developers and users consider this unfair.
In addition, allegations that these billing schemes have affected competition. Because Google's market share in app stores is so large, developers may be forced to use Google's payment system instead of choosing other payment solutions. This makes it difficult to compete because other payment solutions don't have the same market reach as Google. This is also a focus of the CCI survey.
For Google, the allegations could have a shock to its business model. Because Google has a monopoly in many areas, its business model needs to be fair enough to avoid being perceived by regulators as an abuse of its market position. If the CCI decides that the charges are valid, Google could face fairly stiff fines and may be forced to change its business model.
In the Indian market: Microsoft has been fined Rs 700 billion, Nokia has been fined $400 million, Amazon has received a fine of Rs 2000 crore after entering the Indian market, and foreign companies such as Samsung and IBM have also been fined heavily. The Indian government has actually achieved "equality for all" in terms of fines.
Notably, Google was fined $113 million (800 million yuan) by India's antitrust regulator in October 2022 for not allowing developers to use third-party payment gateways to process in-app purchases. It's also another antitrust investigation Google faces in India.