All members of ADIF as well as most Indian tech startups, stand to lose from Google Play Store’s 30% commission on in-app purchases, the group said
Ajay Data, secretary-general of ADIF, said that the initial trigger came last year when Google removed his video conferencing app VideoMeet a day before the formal launch
Besides ‘predatory’ policies of big tech companies, ADIF will also work towards highlighting the startup ecosystem’s demand for regulatory changes
For Ajay Data, CEO of Data XGen Technologies, discontentment with tech giant Google and its Play Store policies began amid the pandemic last year. Data recounts how a day before the launch event for his homegrown video conferencing solution VideoMeet, the app was removed from the Play Store. The reason? “They said the privacy policy is not clearly mentioned,” Data told Inc42 about the email he received from Google in July which explained the removal of VideoMeet from the Play Store.
“We had written it as ‘terms and conditions’ but it contained information about the app’s privacy policy as well. Google gave me no warning about this, even though every app goes through the Play Store’s checks before being listed there,” Data said, adding that the incident worked as a trigger for him, to form an association of startups which could amplify the voice of the Indian tech ecosystem. The association, named Atmanirbhar Digital India Foundation (ADIF), was formally launched earlier this week, with many prominent names from the startup ecosystem.
Besides Data, who’s the secretary-general of ADIF, the association comprises startup founders and chief executives namely Murugavel Janakiraman of Bharat Matrimony, Snehil Khanor of TrulyMadly, Ritesh Mallik of Innov8, Sairee Chahal of SHEROES and Anand Lunia of India Quotient in its executive council.
Besides the fact that all members of ADIF helm their respective startup ventures, another commonality between them is how much they stand to lose from Google’s decision of charging the makers of all Play-distributed apps, a 30% commission on users’ in-app purchases of digital goods and services.
The 30% commission was introduced as a policy clarification in late-September last year, with the tech giant also stating that all Play Store-distributed apps selling digital goods would have to use Google Play’s billing system.
Inc42 had analysed the many sides to the argument around Google’s new Play Store policies.
Taking notice of the backlash, Google delayed the implementation of the new policy till March 31, 2022, for Indian app developers. However, the damage had already been done.
Several Indian internet entrepreneurs found common ground as they raged against the big tech companies’ ‘monopolising’ the internet.
Notably, the iOS App Store also charges a 30% commission on in-app purchases. However, that has never been a big concern given the low market share for Apple devices in India. On the other hand, Android accounts for over 95% of the smartphone user base in India. Plus, most of these Android smartphones come with the Google Play Store pre-installed and rely on Google’s services for optimal functioning.
For most of India’s tech startups which have yet to attain profitability, the 30% commission on in-app purchases will essentially work as a 30% hit on their EBITDA, worsening the prospect of turning in a profit in the near future.
The ADIF is a small cohort of the larger group of startups disenchanted by Google and its Play Store policies, as well as other big tech products that have a wide impact. The core objective of the association is to be the representative body for the Indian startup ecosystem, voicing their concerns to the government and regulatory bodies and playing a role in shaping the policy framework for the sector.
Data pointed out the policies of big tech companies in India will continually need to be scrutinised, as he talked about WhatsApp’s contentious privacy policy update.
Last week, the messaging platform stated that as per its new privacy policy, certain data from chats between users and business accounts on WhatsApp would be shared with Facebook and its group companies including Instagram. While nothing changed in terms of sharing of user data from peer-to-peer chats on WhatsApp, the fact that the platform didn’t give users an option to opt-out from their data being shared, along with misinformation about WhatsApp gaining access to users’ chats, peeved several netizens.
Paytm CEO Vijay Shekhar Sharma, while talking about the incident, called on big tech companies to stop treating India as a ‘third-world market’.
Taking notice of the backlash, WhatsApp, on January 16, delayed the implementation of its privacy policy by three months, from February 08 to May 15, 2021.
Data added that besides the ‘predatory’ policies of big tech companies, ADIF will also work towards highlighting the startup ecosystem’s demand for regulatory changes, in its dialogue with government agencies.
“Streamlining for funding, getting equal opportunities to work in government projects, becoming truly ‘vocal for local’ in practice and not just in words. We want the Competition Commission of India (CCI), the Ministry of Electronics and Information Technology (MeitY), and various other government agencies to work with us,” Data said.
And of course, the ADIF is open to more startups joining the group. The Play Store changes will affect a wide variety of apps and platforms.
“The ADIF has a limited bandwidth right now as it’s still early days. The ideas are all there and as more people join our mission, we will expand the scope of our activities. We practice what we preach, and are committed to ‘vocal for local’ and ‘Atmanirbhar Bharat’ in reality,” Data maintained.
