Start-up industry body the Alliance of Digital India Foundation (ADIF) has told the Parliamentary Standing Committee on Finance that big techs firms including Google and Apple — through their respective app stores — are misusing their dominant position in the market by charging up to 30 per cent in commission for in-app purchases.
ADIF was one of the parties to make a representation to the Parliamentary Standing Committee on Finance to address anti-competitive practices of big tech companies in the meeting held on May 19.
According to the letter by ADIF, in 2020, Google had 95.1 per cent mobile OS market share in India. Under its new policy, “Google will effectively bar developers from using any other method to accept payments from customers, thus forcing payment of its commission.”
ADIF noted Google has already started implementing these new rules in the US, Europe and other parts of the world and starting from June 1, 2022, non-compliant apps will be removed from the play store. Meanwhile, these will be implemented in India from October 2022.
Causes a stir
“Several Indian developers have objected to the quantum of the commissions, and the lack of choice in picking a payments system, terming the proposed policy change unreasonable. They have also complained about monopolistic policies of the app stores and their abuse of market power to force unfavorable terms on developers,” Sijo Kuruvilla George, Executive Director, ADIF wrote, adding that their dominant position could gravely hurt competition and innovation in the market, while also adversely affecting the ecosystem.
“Making app store commissions unavoidable drives up the costs of business and cuts revenue, which can be especially crucial for start-ups…High commissions could also force developers to pass on costs to users, which could adversely affect user access and choice, especially in price-sensitive markets like India,” Kuruvilla wrote.
He added, “As things stand, apps that rely on advertising revenue are not required to pay commissions to Google Play and App Store. Ads are paid for marketers directly and do not involve in-app purchases. As such, Google and Apple cannot charge any commission from ad-based businesses under their current policies. Therefore, to avoid commissions, developers may choose in-app advertising to monetise their apps. This can lead to excessive collection of personal data of users, including personally identifiable information, sometimes without consent, and may put the privacy of users at risk.
While the meeting on Friday was on the competitive practices of the Big Techs, representatives of many industries including hospitality, restaurants, traders - digital media, newspapers and start-ups also participated. Subsequent meetings, too, are expected to happen.