Startups are not in favor of paying a commission on each transaction, they say it’s like paying tax and why should they be paying commission to Google for anything we sell, said a startup founder who was amongst the first to raise his voice against the issue in the year 2021. Several startups joined forces to file a complaint with the government and in court over the actual date for compliance of 30th Sep 2021. Google decided to give an extension of 6 months for app developers in India in order to make them comply with a new billing system for commission fees, this came after startups decided to against commission fees. Google will be enforcing the policy globally with more stringent rules while charging a 30% commission for in-app purchases beginning from March 31st, 2022 further adding that Google is being mindful of the needs of startups.
In one of the blogs, Google said, “We do not succeed unless our partners succeed” and that Google will now be conducting “listening sessions” in order to understand the issues of Indian startup founders. The issue was raised when Google had taken down Paytm for violating certain policies after which several startups criticized Google including Softbank India Founder- Vijay Shekhar Sharma.
“A deferment (of the fees) is just not enough,” a statement made by an Indian startup executive, who refused to reveal his identity. “The gatekeeper of the biggest application store should be fair and transparent.”
Recently entrepreneurs in India have held several meetings to come up with an alternative to Google Play in order to get rid of the dependency and further challenge Google legally. “Calling all developers. Let’s build India’s Digital Revolution, together,” the ad said, adding there would be no payment charge when a Paytm wallet or a state-backed payment system is used. Following this, an ad was published on the front page of several leading newspapers officially announcing the launch of a ‘Mini app store’.
“This can kill the startup ecosystem and drive them out of the app economy. This can be seen as a gross abuse of the dominance of the operating system market, as the normal use of payment gateway interfaces for any online transaction is the norm. It is generally around 1-3%. Thus, this commission rate can be challenged by startups, which is in line with the order of CCI,” said Ramesh Kailasam, President & Chief executive of IndiaTech.
For developers offering in-app purchases, Google is mandating the use of the Google Play Billing System (GPBS) from 31st Oct, apps that fail to comply may face suspension.
