With the intervention of the communications and IT minister, Ashwini Vaishnaw, Google on Tuesday reinstated all the apps in its Play Store, which it had removed on March 1 over non-payment of commission charges for in-app purchases.
The development is significant because the reinstatement is on the same terms and conditions which existed as on March 1. This means that the users of these apps can make in-app purchases either by using Google’s payment system or third party billing. Google had reinstated several apps between March 2-4 but these were on consumption-only basis, which means that purchases could be made outside the Play Store.
“Google and startups met with us. We have had very constructive discussions and finally, Google has agreed to list all the apps with same status as on Friday, March 1,” Vaishnaw said on Tuesday. “Google has been supporting our technology development journey and we believe that in the coming months, both startups and Google will come to a long-term resolution,” he added.
However, the issue relating to the commission which Google charges is far from over. The tech major said in a statement that the reinstatement is temporary.
“In the spirit of cooperation, we are temporarily reinstating the apps of the developers with appeals pending in the Supreme Court. Google maintains its right to implement and enforce its business model, as established in various courts. We will invoice our full applicable services fees in the interim and are extending payment timelines for these companies. We look forward to a collaborative effort to find solutions that respect the needs of all parties,” a Google spokesperson said.
This means that Google would continue to bill the developers whose apps are listed in the Play Store.
Some of the apps which were removed by Google on March 1 included, matrimony platforms like Shaadi, Matrimony.com, Bharat Matrimony, Balaji Telefilms’ Altt (formerly ALTBalaji), audio platform Kuku FM, dating service Quack Quack, Truly Madly, Naukri, 99acres, etc.
Homegrown developers continue to remain critical of the charges levied by Google.
“We continue to maintain and assert that the Google transaction charges are arbitrary, selective and a blatant misuse of dominant power which will crush the local digital economy while Google continues to provide the same services for free to companies like Uber and Amazon,” Anupam Mittal, founder and CEO of People Group, which owns Shaadi.com, said.
Snehil Khanor, founder and CEO Truly Madly, said, “It’s an interim solution that will help us get our business back. Google will implement a fee structure, invoicing 11%-26% of the app’s revenue, representing a significant financial burden for app developers”.
“I think it was the most amicable way to move forward. It’s a temporary relief as apps will be back to normal. Government has assured us of support,” said Vinay Singhal, founder and CEO of STAGE.
Prateek Jain, associate director of Alliance of Digital India Foundation (ADIF) said, “as digital startups continue to innovate and drive growth, we trust that the government’s support will be steadfast. Furthermore, we are hopeful for a swift and favourable consideration of the pending case with the CCI, which will be a significant step forward for the digital economy”.
At the heart of the dispute between Google and homegrown app developers is the commission which the former charges for in-app purchases. After the Competition Commission of India in October, 2022, ruled against Google’s anti-competitive practices in relation to its Play Store policies and levied a penalty of Rs 936.44 crore, the tech major allowed for third party billing for in-app purchases. Google’s commission ranges between 15-30% – 15% for revenues up to $1 million and 30% beyond it. In the case of third-party billing, the commission reduces by 4%, thus ranging between 11-26%.
Homegrown developers have termed this commission structure too high and wants it lowered. They went to Madras high court and subsequently to the Supreme Court, where the matter is currently pending, but were unable to get a stay order. Since the developers were not paying the bills, Google had started removing the apps on March 1. The developers maintain that Google did the same without giving any notice and since the matter is before the SC, it should ideally wait till the court disposes of the matter.
Google’s stand has been that only 3% of developers in India sell digital goods or services and therefore need to pay a service fee, the vast majority of whom pay 15% or less – the lowest of any major global app store. It has said that in India, less than 60 developers on Google Play are subject to fees above 15%.
It has given app developers three options for billing system — operate on a consumption-only basis without paying a service fee, use Google Play’s billing system, or use an alternative billing system.