The Alliance of Digital India Foundation (ADIF), an industry body representing the developer ecosystem and startups, said that Google needs to reconsider its decision to implement the new Google Play payments policy, as the decision could have far-reaching consequences for the Indian startup ecosystem.
The foundation highlighted that such policies are likely to result in a reduction in revenue and profitability, which could hamper the growth and sustainability of many startups.
Google intends to implement its new Google Play payments policy on April 26, 2023. According to ADIF, Google charging a nearly 30% service fee on app developers will prove to be a significant blow to the Indian startup ecosystem.
“The Indian tech industry has repeatedly expressed its concerns about the malpractices of big tech companies like Google. The abusive anti-competitive practices committed by these companies are adversely affecting the Ease of Doing Business in India. Google’s decision to impose a high service fee on Indian app developers is just one example of how Big Tech companies are exploiting their dominant position in the market to the detriment of smaller players, as this would make many startups unsustainable. The 30% commission would apply to all startups, imparting services as In-app purchases or subscriptions.” Said a statement from ADIF.
ADIF called on the Indian government and the CCI to take immediate action to address the unfair billing practices of big tech companies and safeguard the interests of Indian app developers. ADIF highlighted the necessity to find a more equitable solution that benefits all stakeholders.
The Foundation believes that the Indian tech industry has the potential to become a global leader in innovation and entrepreneurship. However, this potential can only be realized if the industry is supported by a fair and transparent regulatory framework that protects the interests of all stakeholders, including small and medium-sized enterprises.
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Google has been called out for its anti-competitive practices at different instances across the globe. Recently, the company was fined $32 million by South Korea's antitrust regulator for violating the country's competition laws. The Korea Fair Trade Commission (KFTC) found that Google's anti-competitive practices have hindered the development of rivals in the mobile operating system market.
KFTC had also found that Google has restricted rival search engines from being used as the default search engines on Android devices, and has used its dominance to force app developers to use its payment system. According to ADIF, the latest ruling in South Korea highlights the need for greater scrutiny of the tech giant's business practices in India as well to promote fair competition in the market.
The Foundation believes that Google's monopoly over the app store market, coupled with its unfair billing practices, is a significant concern for the Indian tech industry.
The Indian tech sector has made significant contributions to the Indian economy, creating jobs and driving growth in various sectors. However, the growth of the industry is being hampered by the unfair practices of big tech companies like Google. The imposition of an exorbitant service fee on app developers is just one example of how these companies are stifling innovation and competition in the market.
ADIF is committed to working with all stakeholders to find a more equitable solution that benefits the Indian tech industry. The Foundation firmly believes that is vital to implement stronger laws against anti-competitive practices adopted by larger companies to create a fair and competitive market that encourages innovation and fosters growth in the Indian tech industry.