Google proposes to introduce customised pricing and solutions for app developers

Debangana Ghosh | | | Updated on: Dec 04, 2021
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In October, industry body ADIF approached CCI seeking interim relief from Google’s Play Store commission of 30%

After slashing commission rates for in-app sale of digital goods and services on Google Play Store to 15 per cent from January 1, Google is now proposing to introduce customised pricing and solutions for app developers as they continue remain unsatisfied.

“Almost 99 per cent of the developers have seen the power of Google, internet and Play Store deeply. They are not impacted by the fees or the commissions we are discussing. I think Play Store is enabling a big transformation in India in terms of businesses going digital both in India and globally, safe and secure,” Sanjay Gupta, Country Head and Vice-President, Google India, told BusinessLine in an interview.

“These are very complex issues to solve and there’s no one solution. One solution we have provided is that a few months back, we announced a reduction of commission rates to 15 per cent for all subscription-led businesses, as compared to 30 per cent earlier. That really brings down the margin to 15 per cent. Now the real solution from here on will be far more customised because 99 per cent people are not a part of this debate, and for the rest 1 per cent, it cannot be a ‘one-size-fits-all’ solution,” Gupta said.

“We are having deep engagement with the community and developers to solve it. This is supposed to start from April 1, 2022. We still have a few months to get to that end point. I think we have been having enough in-depth conversations going on,” Gupta added.

ADIF approaches CCI

In October this year, industry body Alliance of Digital India Foundation (ADIF) which represents over 400 start-ups and 200 plus institutions had approached the Competition Commission of India (CCI) seeking interim relief from Google’s Play Store commission of 30 per cent along with a restriction on letting start-ups and app developers have the choice to use other payment gateways starting from March 2022.

Sijo Kuruvilla George, Executive Director, ADIF told BusinessLine , “We are not particularly happy about the customised solution suggestion; to my mind, it is looking like a government tariff system, wherein depending on the category you have different charges. It signals that Google is acting very bureaucratic and like a government in itself. I would say the option of customised solutions for the 1 per cent is an acknowledgement that the charges are onerous and high. Had that premise not been there, I don’t think Google would have the need to reconsider it but it is good to know that they are looking into it.”

“They haven’t reached out to us or any of the other start-ups in our network. We will be happy to facilitate a conversation if Google is keen to understand the problems. That is our role as an industry body. But if I were to guess, most likely Google is speaking to those who are already on their billing systems. We do not as yet know of any conversations or open democratic dialogues that they have had. On our part, we will now attempt to reach out to Google as well and see if we can have a conversation,” George said.

Gupta believes that Play Store has been an enabler for start-ups which will drive economic value creation for India in a significant way. “On Google Play Store, a start-up can go online in a week’s time. You can distribute it across the country and even the world in a quick way. It ensures that when you build products, its kept safe and secure. And then enable you to build a business of your choice, either advertising-led or subscription-based or both. I think the debate is largely not around Google Play Store, but on the question that when I do a subscription-based model what should the margin be,” he explained.

Published on December 05, 2021

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