Google has deferred the enforcement of its 30% cut on in-app purchases only for India to March 2022. The company said this will ensure that developers have enough time to integrate with Play billing system and implement UPI payment for subscriptions. The deadline for the rest of the world remains September 2021.
The change comes just two days after MEITY held a call with 30-40 Indian startup founders to discuss issues around Google’s apparent dominance in India. Google’s 30% cut on in-app purchases has riled up the Indian start-up ecosystem, which has accused it of abusing its dominance, playing unfair, and controlling the development of apps in India.
The Mountain View company is trying to assuage some of this anger: it will also set up “listening sessions” with Indian startups “to understand their concerns more deeply” and run policy workshops to clear any additional questions. The company has insisted that its billing system”is a one-stop shop” to manage subscriptions, since it allows for “clear disclosures” about price, subscription information, recurring payments, reminders about free trials, cancellations and refunds.
In short, our billing system provides a simple, safe way for consumers to transact — and we have seen that this simplicity and safety is critical to growing developers’ businesses inside Google Play.
Besides, Google’s Android OS has always allowed multiple app stores, the company said. Users can even change default apps for messaging, phone dialer, and the app store. Most Android devices ship with at least two app stores preinstalled, and consumers are able to install additional app stores, the company reminded.
What is Google’s 30% cut? Google is essentially enforcing its own billing system upon apps that have paid services — or in-app purchases. When apps use Google’s billing system, the company will cut 30% from the payment. While this cut is not new, Google is now getting apps to pay up — apps are barred from taking users to in-app browsers or websites to make payments.
Why is the Indian startup community angry? The key concern is the impact this has on startup revenues: Google gets a majority share of digital advertising in India for acquiring customers, and in addition to that, it now expects platforms to part with 30% fees for closing the acquisition as well. Google exercises complete control over app distribution since it owns both the app store, the Android operating system, and the AdWords advertising ecosystem. Additionally, Google nudges users towards its own Play Store by warning users that downloads outside of the Play Store may not be safe.
Founders are alleging that Play Store policies have also been applied inconsistently and arbitrarily. For instance, Google had removed advertisement for Mobile Premier League on apps operated by Time Internet, in a bid to restrict surrogate advertising of real-money gaming (Times Internet owns 3% of MPL).
Do read our story, based on conversations with many Indian founders, here.
What is the startup community going to do next? The community had several ideas for how it could proceed, and first on the agenda is setting up an industry association for Indian founders. Another is that Google should be forced to do in India what TikTok has been forced to do in the US. Create a local subsidiary, partly owned by local companies. Ideas for an Indian app store and complaining to the Competition Commission of India (CC) against Google were also considered.
- Indian startup founders gear up to take on Google’s Play Store policies
- Google will enforce its billing system on all Play Store apps to collect 30% cut on in-app purchases