Admission of guilt or not, there is no abating Paytm’s ire for Google’s policies.
In a saga which started with Google’s temporary axing of Paytm from its Play Store to the local start-ups taking up arms against it, has now boiled down to this – Google has decided to defer its controversial new Play Store billing policy in India to March 31, 2022.
The statement comes just a week after when Google said it would charge the commission on developers globally from September 2021. The new rules stop apps from circumventing Google’s payment system, ensuring Google gets its 30% commission on all paid apps and in-app purchases.
Even as the postponement of the decision has been announced, Paytm Chief Executive Vijay Shekhar Sharma is far from pleased about what he terms as “arbitrary way of enforcing policies”. Sharma has expressed grave concern over Google’s enforcement and relaxation of crucial policy measures. He stressed that if continued to be given a free rein, these type of decisions would severely impact the fate of the entire Indian app ecosystem. Adding further, he also termed the decision to defer the 30% levy charges as “an admission of guilt” on the tech giant’s part.
In its own defence, Google has sought to clarify that the policy of taking a 30% cut on Play Store transactions is not new. The company has claimed that more than 97% of developers with apps on the Google Play Store already comply with the set policy and reiterated that the policy only applies to less than 3% of developers. While Google has resolved to enforce its in-app purchase policies more strictly in the future, it is also being mindful of local needs and concerns from the Indian market, promising to better its third-party store support in Android 12.
However, the decision to defer is clearly a reaction to the widespread outrage expressed by more than 150 start-ups in the country, who reportedly, are actively mulling over alternatives app marketplace to combat the ‘Google Tax’. In fact, Paytm, the Noida based fintech giant has already launched a mini app store containing popular apps such as 1mg, Practo, Domino’s Pizza, Gaana, and nearly 300 more which have already jumped on board.
Globally, app developers have said a 30% fee is excessive compared with the 2% fees for typical credit card payments processors. Apple, which charges a similar fee, has also been on the receiving end of criticism for requiring app developers to use its payment systems, has said the amount covers the security and marketing benefits their app stores provide. While such a fee would be fair, Vijay Sharma has also called for Indian antitrust regulatory bodies and the government to ensure that Google subsumes to fair play policies like Apple has been subjected to in India and not leverage market dominance for undue advantage.
It will be interesting to see how Google navigates this strait, seeing as how they could strain Google’s strong ties to Indian start-ups. It has been a heavy investor, helping hundreds with product development. As recently as July, its Indian-born CEO Sundar Pichai committed $10 billion in new investments over five to seven years.
With more than 90% of India’s half a billion smartphones running on Google’s Android and the kind of spark that these mutinies can potentially ignite, in these chaotic times, Google needs to tread carefully with the desis.
Ball is in Google’s court now, but its next move would have a far reaching impact, for sure.