Amid disagreement between Google and homegrown digital services companies on in-app service fee, Shaadi.com founder and CEO Anupam Mittal said the government needs to intervene and come up with a central repository of apps to break the monopoly of Google.
“Just like we have UPI (Unified Payments Interface), ONDC (Open Network for Digital Commerce), anybody should be allowed to put a front end to those apps,” Mittal told FE in an interaction.
“Android operating system cannot come bundled with the Google app store or maps or anything. User has to choose which service he wants to use. That’s how you prevent monopolies,” Mittal said, adding that without the government’s or regulator’s intervention this won’t be possible.
Comments from Mittal assume significance as Google owns around 95% share in the operating system market via Android. Further, its dominance in the app store and the absence of alternatives, is also impacting the government’s goal of keeping the Internet open.
In fact, the Competition Commission of India (CCI) in October 2022 imposed a penalty of Rs 936.44 crore on Google for abusing its dominant position with respect to its Play Store policies.
On Friday, Google delisted apps of 10 companies citing violation of in-app billing policy. The issue pertains to the fact that Google charges a 11-26% commission from the companies if any of their user purchases a product or service from their apps.
Post the incident, many homegrown startups lashed out at Google saying the commission charges are too high and the billing system by Google is to extract unviable rent from homegrown developers. Communications and IT minister, Ashwini Vaishnaw has called a meeting on Monday with Google and app developers to discuss and sort out the issue.
“They are charging 11-30% for providing payment services, which cost 1%. It’s absolutely ridiculous,” Mittal said, adding that the companies don’t have a problem with Google offering a payment gateway but that should not be enforced as well as should have competitive rates.
After getting delisted, apps such as Naukri, 99Acres, Shiksha – which belongs to InfoEdge – re-applied as consumption-only apps, and not under in-app billing category.
Consumption-only apps means users cannot purchase any products or services — digital or physical — from within the app. They will have to do it outside the app, maybe on the company’s website, which affects both the user experience and business of the apps, said industry executives. Such apps do not pay commission as in-app purchases are restricted.
Google on Sunday also restored apps like Kuku FM, Stage, Altt, Truly Madly – who also re-applied under consumption-only category.
The Internet and Mobile Association of India (IAMAI) expressed concern as many apps continue to be delisted. The association also urged Google to restore status quo of the apps and re-list them on Play Store in the manner they have been operating since inception.
“We are already paying 20-50% of our revenue as advertising to Google, it makes Rs 30,000 crore from India a year. Now, they are saying we want another Rs 30,000 crore of your revenue. How is that possible?” Mittal said.
On viability of alternative app marketplaces such as IndusApp Store, Mittal said, “unless you unbundle Google (from mandatorily pre-installing apps in phones), you can’t create an alternative app store”.
Currently, Google has an agreement with handset makers to pre-install a suite of their apps in the phones. Users cannot even uninstall those apps from their phones.
In 2022, CCI also imposed another penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.
According to Google, only 3% of developers in India sell digital goods or services and therefore need to pay a service fee. A vast majority of these developers pay 15% or less. Less than 60 developers on Google Play are subject to fees above 15%, Google said.
“Google is telling that 200,000 apps have complied. The fact is 97% of the 200,000 apps are free, what compliance do they have to do? The few that have complied is because they don’t have a choice,” Mittal said.
Several homegrown startups have challenged the Play Store billing policy in the Madras High Court and Supreme Court on the ground that the levy is too high, but have not got a stay order. The Supreme Court is currently hearing a plea by the 10 companies who have challenged this billing policy.
