For quite some time, multiple Indian startups have been protesting against Google and Apple levying commission on in-app purchases for apps listed in the respective app stores. Finally, according to industry executives, now the Indian Government is all set to step in and resolve the issue.
On Tuesday, the Alphabet-owned search behemoth announced that it would reduce commission charged from developers to 15% down from 30% for the first $1 million earned as revenue each year. Similarly, earlier in January, Apple also announced that reduction of commission to 15% for the first $1 million revenue developers earn.
So, now the question arrives, why are Google and Apple still facing backlash from internet companies?
Indian technology entrepreneurs believe the move is nothing more than a PR stunt as these big tech giants have made the use of their own app store billing mandatory for in-app purchases. Both Google and Apple, in the near future, won’t allow the use of any other merchant payments’ system which charge a significantly lower fee for processing transactions.
Currently, most app developers prefer using inexpensive payment gateways for enabling in-app purchases in their apps. However, after Google’s new directive comes into motion, developers will not be left with any other choice as Android owns a whopping 95.23% share of India’s entire mobile operating system space.
Note here that India-based developers have been granted time till the end of March 2022 for integrating the Google Play Store’s billing into their Android apps, whereas in other parts of the world, it will be effective from July 2021 itself.
The company announced that they will be charging the regular 30% commission for billings that exceed $1 million in revenue.
In October 2020, after Vijay Shekar Sharma, founder and CEO of the homegrown payments’ giant Paytm, accused that Google of exploiting developers by leveraging its monopoly over the app ecosystem, the Alphabet-owned tech giant had to defer its plan to implement a 30% commission on in-app purchases in India.
Post that outrage, several Indian startups went on to group themselves under the banner of ADIF aka Aatmanirbhar Digital India Foundation and are now actively lobbying to establish a level playing field when it comes to local startups against big tech firms like Google and Apple.
U.S legislators, taking note of the problem, are already one step ahead in resolving the issue in their homefront. In early March, the House of Representatives in the Arizona State passed legislation that prevents all app store operators from forcing a developer to adopt an exclusive payments system.
It now remains to be seen if the GOI can implement a similar law and ensure the Indian startup ecosystem can remain in a fair and competitive environment in the face of Big Tech giants pulling strings in their own favour. We will keep you updated on all future developments. Until then, stay tuned.