With around 99 per cent of India’s smartphone market, Google’s Android operating system enjoys unparalleled dominance in the Indian market. With this dominance comes a Hobson’s choice for app developers: Accept Google’s terms of service or risk being out of the only app ecosystem that matters in the Indian context.
Now, after Epic Games, makers of the popular videogame Fortnite, sued Google along with Apple over the tax they charge on app revenues, Indian startups are planning their own alliance in hopes of mounting a legal challenge against what they feel are unfair practices by Google.
According to Reuters, nearly 50 Indian entrepreneurs have held video conferences planning a possible showdown with Google, with Paytm founder Vijay Shekhar Sharma among them.
“If we together don’t do anything, then history will not be kind to us. We have to control our digital destiny,” Sharma was reported as saying. In the call, he said Google was the “big daddy” controlling the “oxygen supply of [app] distribution on Android phones, urging the executives to join hands to “stop this tsunami”.
Paytm, which is backed by Softbank, is one of India’s 21 unicorn companies (startups that are valued at more than $1 billion) and was an early mover in the digital payments space in the country. The app has since evolved into more of a ‘super-app’ offering services ranging from payments to booking flight tickets and e-commerce. With the advent of the Dream 11 sponsored IPL, Paytm also sought to introduce an IPL-themed ‘cashback’ feature allowing users to collect stickers of popular players with each transaction and potentially earn money from the collection.
However, the new feature resulted in the app being temporarily removed from the Google Play Store as Alphabet deemed the feature a violation of its terms of service against real-money gambling. Paytm was returned to the app store after it rolled back the cashback option after making a few tweaks to the game.
In a blog post, Paytm accused Google of arm-twisting tactics. On the occasion of Gandhi Jayanti, Paytm founder Vijay Shekhar Sharma even tweeted a tongue-in-cheek message about Google’s dominance. “Be the app that, you want to see in the world. Condition: If only Google let’s you be. #GandhiJayanti”.
Google also sent notices to foodtech companies Swiggy and Zomato when they launched similar promotional schemes.
According to the report, one suggestion was to launch a local rival to the Google Play Store—but Sharma said this would not be immediately effective given Google’s’s dominance.
"It's definitely going to be a bitter fight," Dinesh Agarwal, CEO of e-commerce firm IndiaMART told Reuters. "Google will lose this battle. It's just a matter of time," he added.
Google charges a 30 per cent commission on payments made within apps on the Android store—a cut Google has been increasingly strict about taking, adding a host of new app categories from education to dating and fitness that use Google billing to the list of examples that will have to pay the commission.