UPDATE 1-Match, Indian startups call for antitrust probe of Google in-app billing fee

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Match, Indian startups challenge Google's in-app fee

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Indian startups say Google bypasses antitrust order

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Google has said app payment fee covers services, security

(Adds details of Tinder-owner Match's filing)

By Aditya Kalra

NEW DELHI, April 6 (Reuters) - Tinder-owner Match Group and Indian startups have asked the country's competition body to investigate Alphabet's Google for alleged non-compliance with an antitrust directive by charging a high service fee for in-app payments, filings show.

The filings by Match and Alliance of Digital India Foundation (ADIF) mark the latest tussle between Google and rival companies, which have repeatedly criticised the U.S. company for what they say are unfair business restrictions.

"Google's policy change of a charging service fee even on transactions processed by third-party payment processors ... has detrimental consequences for users and app developers," the 15-page confidential March complaint by ADIF said.

Google, which declined to comment, has previously said the service fee supports investments in Google Play app store and the Android mobile operating system, ensuring it distributes it for free, and covers developer tools and analytic services.

Details of the ADIF and Match filings, which were reviewed by Reuters on Thursday, have not previously been reported. ADIF, Match and the CCI did not respond to requests for comment.

The Competition Commission of India (CCI) in October imposed a $113 million fine on Google and said it must allow the use of third-party billing and stop forcing developers to use its in-app payment system that charges commission of 15%-30%.

Google later decided to start offering User Choice Billing (UCB) for allowing alternative payments alongside Google's when purchasing in-app digital content, but the ADIF said in its filing that this new system imposes a "service fee".

"The app developers will have to pay 1%-3% for alternate payment service providers and 11%-26% to Google, which makes the entire ecosystem unsustainable," ADIF said.

Match in its March 21 filing asked the CCI to direct Google not to collect or impose any commission or service fee, including via user choice billing, saying the system was "anti-competitive".

Google, which counts India as a major growth market, faces other regulatory challenges, including a setback that forced it to change how it markets its Android system.

In an order in October, the CCI said Google abused its market position and its mandatory imposition of the proprietary payment system limited the scope of payment processors and app developers for technical development and innovation.

Google has challenged this in an Indian tribunal.

ADIF, which represents Indian startups including digital payments firm Paytm and social media app ShareChat, in its March complaint alleged that Google was using the new service fee system to bypass the antitrust directive that ordered it not to impose any "unfair and disproportionate" conditions.

"The policy of UCB is unfair and the same would lead to unjust enrichment to Google," the ADIF filing said. (Reporting by Aditya Kalra; Editing by Alexander Smith and Barbara Lewis)