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Google delisted at least 23 apps from nine Indian developers from its Play Store on Friday for not complying with its payments policy. These include all thirteen apps from Matrimony.com — such as Bharat Matrimony, Kerala Matrimony and Jodii — three apps from InfoEdge — Naukri.com, Naukri Recruiter, and 99Acres — People Interactive’s Shaadi.com, Alt Balaji’s streaming service ALTT, and streaming services aha and Stage.
Delisting them means that users of Android — the mobile operating system that accounts for almost 95% of India’s smartphone market — will not be able to search for and download these apps from Google’s official Play Store. Many of the affected apps do not even have apps for iOS.
In a blog post on Friday morning, Google had said that it could remove apps that do not comply with its payments policy and throughout the day, apps kept disappearing. In the post, the company said, “[F]or an extended period of time, 10 companies, including many well-established ones, have chosen to not pay for the immense value they receive on Google Play”.
But the founders who have been affected called it a “dark day for Indian internet”. “Unlike 20 years ago when government’s laws determined what is going to be on the internet, now two companies — Apple and Google — determine what people will have access to,” said Matrimony.com’s founder and CEO Murugavel Janakiraman.
TrulyMadly’s Snehil Khanor echoed Janakiraman. “It’s a dark day for Digital India Dream. These Big Techs have become the digital landlords of the digital ecosystem and want us to pay them ‘lagaan’ (rent). Hardly any business in India even makes 30% PAT, but they want to earn 30% of our revenue so they can keep getting bigger at expense of our demise.”
The impact on businesses is immense. Ravi Mittal, CEO and co-founder of QuackQuack, a dating app, said, “95% of our traffic is from Android. We get 25,000 downloads a day via Play Store. 90% of our revenue is going to take a hit. Many developers have no choice but to succumb to survive. Things might change if the CCI or the government intervene.”
At the heart of this tussle is the Google Play Billing System (GPBS) and Google’s payment policies for Android apps. It applies to sale of all digital goods and services sold via in-app billing system and initially required all developers to use only GPBS.
In the notice sent to the developers on Friday, which HT has seen, Google said that the app does not comply with the Payments policy as it “uses a non-Google Play billing system to accept payment for access to in-app features or services”.
On using GPBS, developers would have to pay Google 15% service fee for the first $1 million revenue earned by the developer and 30% of earning over $1 million. For “automatically renewing subscription products”, this service fee is 15%.
After blowback in India, including an adverse order from the Competition Commission of India in October 2022 that said this practice was anticompetitive, Google started allowing developers in India to offer alternative billing systems. Developers who chose to do so had their service to Google reduced by 4%.
To comply with the policy, Google has given developers three options: opt for GPBS, have an alternative billing system, or “operate on a consumption-only basis without paying a service fee”.
But app developers in India are not satisfied for two main reasons — first, despite opting for an alternative billing system, they were still obligated to pay Google an 11% or a 26% fee, which they say is unfair; and second, this, they argue, violates, the CCI’s order.
In the October 2022 order, CCI had ordered Google to allow and not restrict app developers from using any third-party billing/ payment processing services.
Eventually, 14 companies, including those whose apps were delisted on Friday, challenged GPBS in Madras High Court. Two additional lawsuits by Disney+Hotstar and Test Book followed. The Madras HC granted interim protection to all of them, but 12 of the original 14 companies filed a special leave petition in the Supreme Court. On February 9, the apex court did not grant these 12 companies protection from getting delisted but Disney+Hotstar and Test Book’s protection continued.
Google argues that the service fee that it charges allows it to invest resources in its platforms, tools and safeguards that help developers and users. Only 3% of developers of the 200,000 Indian developers sell digital goods or services and thus need to pay a service fee, Google has said. “[A]llowing this small group of developers to get differential treatment from the vast majority of developers who are paying their fair share creates an uneven playing field across the ecosystem and puts all other apps and games at a competitive disadvantage,” Google said in the post on Friday.
Since the revenue to calculate the applicable service fee is calculated at developer level, it is not clear how the compliance can be then evaluated at app level. For instance, all apps of Matrimony.com have been delisted while only some apps of InfoEdge were delisted (Naukri.com, 99Acres) while others were not (Jeevansaathi, Shikhsha).
“We are monitoring the situation. We believe we are in compliance. After February 9 [Supreme Court notice], we moved to a model that complies. We will reply to the notice from Google. … There is an ongoing litigation in Madras HC whose next hearing is in the third week of march. We have no protection so we have no choice [but to comply],” Rohan Mathur, head of Jeevansaathi, said. The company has decided to do away with in-app billing and is now completely reliant on its webstore.
“Google has an inconsistent policy. It has been sending out notices over the last one year to in a test and trial game to see who will comply,” Mittal said.
Of the 14 developers that went to court, apps by five have not been delisted: Sorting Hat Technologies (Unacademy), Nasadiya Technologies (Pratilipi), Ananda Vikatan Digital (Vikatan), Primetrace Technologies (Kutumb, Crafto) and Mebigo (ytSocial, ytBoss).
While the apps have been delisted from the Play Store, developers can make them available as official APK (Android Application Package) so that users can sideload them. But that may not be a realistic at scale. “We can’t offer them via sideloading because most people go to the Play Store download apps,” Janakiraman said. And what about alternate app stores like the recently launched Indus appstore from PhonePe? “Indus appstore has a long way to go. It is currently not even 0.1% of the Play Store right now,” he said.
The developers are in conversations with Google. “They called and we told them to list the apps back. They said that they could do that only if we adhere to their policy,” Janakiraman said.
But developers want the government to intervene.
“This situation shows Google’s blatant dominance, raising concerns about the potential impacts on a significant portion of startups and businesses in the digital app economy, which also employ thousands of people. The government needs to intervene and direct CCI to ensure Google is in compliance with their CCI order and immediately restore all apps including QuackQuack,” Mittal said.
“Indian companies will comply – for now. But what India needs is an App Store / Play Store that is a part of Digital Public Infrastructure – like UPI and ONDC. The response needs to be strategic @PiyushGoyal @PiyushGoalOffc,” Sanjeev Bikhchandani, the founder of Info Edge, tweeted Monday evening after three of his apps were delisted.
“If they delist the app, we are forced to accept. We have been given a choice between going out of business and accepting Google. And accepting Google also means going of business but it is a slow death,” Janakiraman said.
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