Google's action against apps discouraging for Indian startup ecosystem

Industry feels that Google is acting too much as a regulator

Google's decision to impose a huge revenue share at 30 per cent will hit the Indian startup ecosystem, say experts. Google's decision to impose a huge revenue share at 30 per cent will hit the Indian startup ecosystem, say experts.

Recently when technology major Google issued a notice to food delivery apps Zomato and Swiggy for violating play store guidelines for using in-app gamification features, it did not go down well with the Indian startup community. Google had earlier removed Paytm from its play store for violating the company's guidelines and then restored it back again after a few hours. Industry feels that Google is acting too much as a regulator and such moves may hurt the Indian startup ecosystem.

When contacted by THE WEEK, Swiggy's spokesperson declined to comment on the issue. The Zomato's spokesperson on the other hand confirmed that they had received a notice from Google and felt that the notice was unfair. “We are a small company and have already realigned our business strategy to comply with Google’s guidelines. We will be replacing Zomato Premier League with a more exciting program by this weekend,” he said.

In-app gamification broadly means applying game dynamics in an app so that the user is prompted to return to the mobile app through gamification. In-app gamification is a tried and tested strategy that has been used for a very long time by app developers because it demonstrably increases customer engagement and app usage. The technique has its roots in basic human psychology, i.e the need for people to compete with others and achieve goals. 

“In-app gamification techniques usually involve the introduction of 'gaming dynamics' such as the ability for users to compete with each other and include features such as in-game rewards and virtual goods, leaderboards and quizzes. These features by themselves are quite harmless and at their worst, serve to push users to spend more time on apps. Gamification becomes dangerous, however, when it’s dovetailed with gambling, which is addictive and a real problem. This is the reason for Google’s play store guidelines regarding apps that promote gambling with real world money, which Swiggy and Zomato are claimed to have violated,” observed Krupesh Bhat, the founder and CEO of SignDesk. 

Interestingly, the in-app gamification features that caused these violations have to do with IPL. Traditionally, platforms have always used this event to boost user engagement with the introduction of leaderboards, features for making predictions about match results and other such features. 

“The controversy appears to have arisen with the cashback feature that allows users to obtain money back and discounts upon making correct predictions. If this is the case, it’s quite a stretch to consider this to be gambling, especially since food delivery apps had introduced essentially the same feature during the previous FIFA world cup and faced none of the same repercussions. Big app store providers such as Google need to be impartial when it comes to implementing their play store policies and must take certain intricacies into account rather than just going by word of policy. Overall, this stand that Google has taken might serve to foment discontent with the company amongst Indian app developers and could be said to be somewhat ill-advised,” pointed out Bhat. 

Many industry voices feel that this is a case of an overreach by Google and it is a large corporation that acts like the government to implement the procedures in ways that suit their interest the best. 

“This is unfortunate. Government bodies need to step in to curb such practices by large corporations. At the same time, government bodies have to make sure that they are acting fairly in preventing such hegemonic practices,” remarked Aditya Narayan Mishra, director and CEO of CIEL HR Services.  

Recently, it was widely reported that Google was enforcing a 30 per cent play store tax on the apps that were not paying it. This move had also come under criticism from different industry players and experts. It is widely known that Google's promoted ecosystem of android based apps is encouraging Indian start ups to actively promote consumer services, be it food delivery or financial services or education and fitness but such kind of steps may not be a positive move. 

“Google's decision to impose a huge revenue share at 30 per cent will hit the Indian startup ecosystem. Google's policy of disallowing innovative gaming and promotion schemes would further hurt industry and the reason cited as against its gambling policy appears more arm twisting to ensure the start ups fall in line. If the agenda is to seek revenue share, it may not be a wrong business practice but it needs to be handled more carefully,” pointed out Subramanyam Sreenivasaiah, the CEO of Ascent HR. 


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