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Understanding the dangers of Apple and Google’s Dominance to Indian Startups and Governance: Digital India Summit

Murugaval Janakiraman, CEO of Bharat Matrimony, spoke about the monopoly of big tech giants Apple and Google in the digital ecosystem and their attempts to enter the payments system in India.

Murugavel Janakiraman, CEO of Bharat Matrimony, warned about the monopoly of big tech giants Apple and Google in the digital ecosystem and its potential impact on Indian start-ups and the Indian government as well. He particularly spoke about the companies’ impact on the payments system when discussing the responsibilities of big tech in the Indian tech ecosystem during the Digital India Summit on February 27, 2024.

Big techs trying to monopolise payments: Janakiraman raised concerns that Apple and Google are trying to enter the payments ecosystem after controlling the mobile application ecosystem. He said that even though the internet is supposed to be open, start-ups have to win the approval of these companies due to their dominance in downloads and distribution.

They think they own the ecosystem. When you’re talking about what is the power of the big techs, they literally control the internet because [of the] operating system, the app ecosystem. So you have to depend on them for distribution, downloads, marketing. And today, they enjoy the great share on all aspects of internet from access, distribution. Now, they’re coming into the payments [ecosystem] also. Until recently, [one could] use any payment gateway, you pay one person a year, two person a year, whatever it is. They’re insisting that [companies] use their own payment system without any additional services,” said Janakiraman.

Big techs have made the internet highly restrictive: Giving the example of Europe, Janakiraman stressed how companies like Apple alter their policies to maintain dominance in the market. He gave the example of an incident in EU where Apple changed its App Store policy following the imposition of the Digital Markets Act.

“Apple comes with a different policy, now pay by downloads. What happens? Because they are controlling the ecosystem, tomorrow they can change the models. Tomorrow they can change Indian company downloading app [They could change the way Indian companies’ apps are downloaded tomorrow],” he said.

The Founder also argued that the influence of Apple and Google can also lead to the Indian government and start-ups losing money. “They distribute their revenue, they make money out of marketing, and they want 15-30 percent of revenue to be paid by them. So it’s becoming a highly restrictive environment from an open internet, because we have seen an open internet. Basically, the concern is not as Apple on mobile internet, but the biggest concern is it’s becoming a two-player control the whole ecosystem,” said Janakiraman.

New app store will need to build trust and discovery: When asked what influences a consumer’s shift towards a new app store, Janakiraman said the platform will need to address two issues of trust and discoverability. For the more well-known companies, this is easier since people are aware of the brand. Janakiraman even said that in the early days, companies used to direct customers towards Play Store and App store which built the trust further. Further, the store being in-built into a phone also gave the platform an advantage over other stores.

“In a way, today, the Play Store is the creation of the company’s marketing effort, plus also they were integrating all the OEMs,” said Janakiraman.

Indian market requires online as well as offline presence: When asked what challenges companies face in entering the Indian market, Janakiraman said that the Indian consumer requires an offline as well as an online presence. He pointed out that an online presence requires more manpower and cost for operations which is higher for the Indian startup compared to global startups. He argued that this situation is made worse by Google and Apple’s call for a 15-30 percent cut of the revenue.

“Today, people may think it’s limited to a digital service company. A simple change of terms and policy by Google, Apple, come on, they can change all company need to pay certain service fee. My view is not about only digital service companies getting reparted. All the startup in India should stand against the big tech. If you don’t stand up, if you don’t come together, it’s a matter of fact [that] they’re going to come after you. They’re going to charge money in some other way and making [it] too difficult to run your business operation,” he said.

Indian government must take the big tech monopoly seriously: Janakiraman said that the government must take the monopolisation of the market by the two companies seriously, especially since the tech giants try to find loopholes on restrictions. He gave the example of a Competition Commission of India (CCI) verdict wherein one order said “Google shall allow not press check any app using third-party billing payment service, shall not take any discriminatory or otherwise any adverse mechanism against those app for using third-party billing.” Janakiraman pointed out that despite this verdict Google sends emails pushing an app developer if it does not implement Google’s billing payment system. The verdict also directed Google not to “impose any condition, including pricing-related condition, on app developer, which is unfair, unreasonable, discriminatory, disproportion to the services provider to the app developer.” Once again referring to the EU incident, Janakiraman said that the big techs take a different route to avoid the legislation.

Google has control over the US notification stack: Moderator Deepit Purkayastha, Co-Founder, Inshorts Group, said that Google appears to have control over the notification stack in the US which he described as the “least talked about critical stack that [Google] own[s].” This is because the notification stack is an important growth lever for most app-oriented companies that use notifications.

“Google makes it compulsory for the OEMs as well as the app developers to use their stack. I think such multi-layered service creates a very, very restrictive environment for India because India has to chart its own path. Indian companies have to chart its own path in a very difficult market. So, if there is some policy being decided somewhere globally, it might suit their global revenues, but it actually harms India. Nobody has the right to be gatekeepers of growth for the India growth story,”  said Purkayastha.

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I'm interested in the shaping and strengthening of rights in the digital space. I cover cybersecurity, platform regulation, gig worker economy. In my free time, I'm either binge-watching an anime or off on a hike.

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