Domestic start-ups cry foul over proposed Google Play’s payments policy changes – The Hindu BusinessLine

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Allege that tech giant would still pocket 11-26 per cent of Indian start-up revenues without rendering any meaningful service; start-ups rue absence of quorum at CCI

Tech giant Google may be gearing up to update its Google Play’s Payments policy from April 26 to respond to recent regulatory developments in India, but the domestic start-ups are not enthused about the proposed changes, claiming that such changes are cosmetic and won’t bring much economic or commercial relief to them. 

The Alliance of Digital Foundation (ADIF), a think tank for digital start-ups, has now asserted that even after proposed changes, Google will still rake in 11-26 per cent of revenue earned by Indian start-ups, merely as commission (or platform fees or service fee or by whatever labelling is done) without providing any specific service to these start-ups.

This would take away a huge chunk of the revenue made by Indian app developers and start-ups and would render business models of many young start-ups unviable, especially the one relying on in-app purchases, paid apps or subscriptions, according to ADIF. 

Also read: NCLAT upholds ₹1,337-crore penalty on Google with modification in directions

“This commission is not so different from the colonial Lagaan — it is unfair to app developers and to the millions of users who rely on digital applications for their day-to-day activities”, a ADIF spokesperson said.

User choice billing system

While ADIF has raised this issue with the Competition Commission of India (CCI), there is unfortunately no quorum at the CCI and hence, Google is taking advantage of an institutional lacunae, bringing in user choice billing (UCB) system in haste and in the process, hurting start-up story and also disregarding the CCI Order, ADIF spokesperson noted.

Government has now set in motion the process afresh to select a new CCI Chairman after scrapping the earlier process and shortlist of candidates. 

Non-monetary direction

Meanwhile, it is learnt that Google is in line with the non-monetary direction (one of the ten) given by CCI proposes to from April 26 allow developers to offer an alternative billing system alongside Google Play’s billing system to users in India making in-app purchases within Play — distributed apps on mobile phones and tablets. 

CCI had directed that Google must allow third party billing systems to be provided and not stipulate that only Google Play’s billing system would be allowed to users in India.

Google’s appeal against CCI’s October 25 order of last year in the Google Play Store policies case — where penalty of ₹937 crore was imposed on Google by CCI — is expected to be taken up by the National Company Law Appellate Tribunal (NCLAT) in the second fortnight of this month. 


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