India’s Startups vs. Google Play Store

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Google

Last Friday in Bengaluru marked a significant moment in the ongoing saga between Google and India’s startup ecosystem. Google’s decision to pull more than a dozen apps from its Play Store for non-compliance with its billing rules has sent shockwaves through the community. This move is the latest development in a three-year tussle that pits the ingenuity of startup founders against the might of one of the world’s most dominant tech companies.

The Catalyst for Conflict
So, why did Google remove these apps from the Play Store? The crux of the issue lies in Google’s billing policy. On March 1, Google revealed that 10 unnamed companies had evaded a fee for in-app digital goods for three years, leveraging court orders while complying with similar fees on other platforms. Google’s policy imposes a 15-30% service fee on in-app purchases and subscriptions, a figure that varies based on the app’s nature and its revenue on Google Play.

Among the apps delisted were major players in various sectors, including matrimony services like Shaadi.com and Matrimony.com, job portal Naukri, real estate platform 99acres, and entertainment services like Alt Balaji’s Altt and the dating app QuackQuack. These apps offered their own payment gateways, flouting Google’s billing policies.

The Legal Maze
This conflict has not just been about fees but also about the freedom to choose how to process payments. After Google announced in October 2020 that its Play billing system would become mandatory worldwide, the Competition Commission of India stepped in. It imposed an antitrust order against Google for abusing its dominant position, directing the company to allow third-party billing systems, albeit with a service fee, discounted by 4%.

Despite these developments, some apps sought relief through the Madras High Court, which declined to intervene. The Supreme Court of India has taken notice, with a hearing set for March 19. However, no interim relief has been granted to the startups in the meantime.

The Voices of Developers
The Indian startup ecosystem has largely decried Google’s recent actions. Many fear that removing in-app purchases will significantly dent long-term revenues, while integrating multiple billing systems could increase costs. Accusations of monopolistic behavior have been rampant, with some going as far as likening Google to a “Digital East India Company.”

In response, there’s been a louder call for an India-focused app store. PhonePe’s launch of Indus, an app store emphasizing minimal service fees for Indian mobile apps, reflects this sentiment. However, Android’s dominance in India, with most devices pre-loaded with the Play Store, underscores Google’s tight grip on the market.

Looking Ahead: The App Store Battle Continues
The Indian government, siding with developers, has voiced its concern. IT and Telecom Minister Ashwini Vaishnaw has stated that the removal of apps is unacceptable, emphasizing the integral role of the startup ecosystem in the Indian economy. A meeting between Google, affected startup founders, and the government is on the horizon to seek a resolution.

This battle highlights the delicate balance between fostering innovation within a booming digital economy and maintaining fair, competitive practices. As this drama unfolds, it underscores the broader conversation about the power dynamics between tech giants and the innovators looking to disrupt the digital landscape.