When we talk about “walled gardens”, an apt example is that of the telecommunication industry in the 1970s, in which only devices manufactured by the telecom operators could connect to the network, and buying a device was not possible for the general public.
The consumers could use all the features the service provider had to offer, but without having the liberty to own one’s phone, the entire system was in the hands of the provider or operator.
Walled gardens were almost obsolete by the beginning of the 21st century, but they are making a comeback, most prominently in the app store ecosystems. After an app gets featured on the app store, the app developers are subjected to unfair and capricious policies and practices.
They are charged with a 30 per cent commission, which is irrational, unfair, and discriminatory. Also if the developers do not abide by the policies, they risk facing consequences, including getting delisted completely from the app store. The mobile phone manufacturers are also not spared from the unilateral conditions, as the bigger players mandate them to pre-install their own apps on smartphones without any option to uninstall them.
However, the app stores should technically only assume the role of an intermediary between the app developer and the user. Since they effectively serve as “intermediaries” (as per IT Act, 2000), app stores are excluded from liability for third-party content. This implies that app stores have obligations that they should forbid discrimination, promote “app neutrality”, and mandate procedural and substantive due process because they effectively carry out what might be described as a “public service”.
In India, this market is dominated by a duopoly of tech giants. These giants are the walled gardens of the app store world, and are charging/planning a preposterous commission up to 30 per cent from the app developers, for in-app purchases and digital subscriptions.
Policy think-tanks such as ADIF is working towards bringing accountability, and promotion of a fair and equitable ecosystem conducive for growth and innovation, where one piece of the puzzle could be to break the duopoly by developing an indigenous app store ecosystem.
First, presently the sensitive user data is going abroad. A local app store, with its local storage would mean that data is stored within the territory of India and the end users will be aware what is it being used for.
India is currently in a good position to challenge the dominance of major global tech companies in its digital ecosystem.
One prominent example is the Open Network for Digital Commerce (ONDC), which aims at promoting open networks for exchange of goods and services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.
Another example is the NPCI which governs UPI and other retail payments in the country. It was established with the help of the Indian Banks Association (IBA) and the RBI. Its goal is to offer infrastructure for both physical and electronic payment and settlement systems to the entire banking sector. It consists of 10 core promoter banks. The involvement of banks ensures safety and security with technologies, and the trust factor it brings to the larger audience.
The starting point of the home-grown app store ecosystem can also be on similar lines where the government collaborates with various stakeholders. Technology entrepreneurs can provide technical expertise to make the system robust, free from malware and bugs, effective, and intuitive to use for the end users. The government will need to create a regulatory body to ensure the smooth functioning and quick adoption of changes to the infrastructure. This will truly democratise the Indian App Store ecosystem.
The writer is ED of ADIF