Big Tech companies Apple and Google have said that a majority of app developers do not pay a commission to them for using their respective app stores. The service fee is paid by the developers only when they charge the users for their app, or offer their content for purchases within the app, and the user makes the payment, officials from the companies told the Parliamentary Standing Committee on Finance.
While Apple said 87% of Indian developers on its App Store do not pay any commission to the company, Google said that 97% of developers on its Play Store can distribute their apps and utilise the services at no cost.
“There are 21,000 Indian apps or app developers who have live apps on the app store. As a percentage of those who pay 30% commission is 0.08%. It is 17 out of 21,000 developers who have live apps,” an official of Apple told the Parliamentary Standing Committee of Finance.
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The statements from these big tech companies are crucial amid growing concerns of monopolies of Apple and Google with regard to their respective app stores. Further, the government is also working on a framework for light-touch regulations for these companies. Several industry representatives have also told the parliamentary committee that a hefty commission fee, of as much as 30%, that is charged by these companies results in unsustainable business model for apps by small Indian entrepreneurs.
“The Big Tech companies have become the gatekeeper firms with tactics undermining the natural forces of competition. With one simple policy change tomorrow, the Big Tech companies can widen the net to include other internet/digital businesses and force them to pay certain percentage of commission,” the committee said, citing industry representatives.
Lately, the Competition Commission of India (CCI) has slapped a penalty of Rs 2,274 crore on Google for abusing its dominant position in the Android Market and Play Store policies.
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Post the CCI order, Google also paused the enforcement of its Google Play billing system, required by app developers to facilitate in-app purchases for users. App developers in India were supposed to comply with Google’s regulations by October 31.
In its order, the CCI asked the company not to restrict other app stores on its Play Store and also allow sideloading, without issuing any warnings to users.
Sideloading is the installation of apps having open source versions on a smartphone, without using the app’s official distribution channel (ie, an app store). Currently, Google tries to prevent sideloading through a multi-step process and issuing security warnings that require users to make changes to the device’s default settings and manually grant various permissions. The CCI is also conducting an investigation on Apple related to its app store policies, similar to Google.