After South Korea became the first nation to pass a bill to rein in the dominance Google and Apple exert overpayments on their app stores, Indian stakeholders have urged the government to enact such similar legislation that would give app developers a choice to use payment systems from homegrown companies and further boost the Indian startup ecosystem.
Startups and developers in India have questioned global app market operators’ exclusive in-app payment systems. Google and Apple have already been facing intense scrutiny over the restrictive aspects of their payments systems. Now, Indian tech firms are geared up to take on the biggies, opposing relatively high commissions on their respective app stores.
Sijo Kuruvilla George, Executive Director of Alliance of Digital India Foundation (ADIF), representing over 250 digital startups with Paytm, BharatMatromony, Innov8 and others as founding members, told Inc42 that the South Korean legislation is a very welcome development, one that sets a precedent for other countries and markets like India.
“This will also force Apple and Google to re-think some of the unfair practices that they have been pursuing in the name of AppStore/Play Store policies,” he said.
ADIF has also sent its letter of support to the proposed legislation.
“Our work at ADIF was focused on raising awareness around the issue and bringing the voice of the developers and startups to the policymakers. As we understand, the government/CCI (Competition Commission of India) has taken note of the matter. With the present development, we as ADIF will look to re-engage the government on the matter and explore/advocate for similar legislation in our country as well,” George elaborated.
The development, George added, also brings attention to the fact that the issue was never really about the 30% figure per se, “but about the unfairness in the high-handed and arbitrary manner in which these platforms were forcing the payment options choice”.
Google in March this year cut its commission to 15% from an original 30% for all in-app purchases on Play Store but four months later, the tech giant announced to push back its new in-app billing system to March 2022.
Apple reached a class action settlement in the US last month with developers who have accused it of exerting dominance in the app content distribution. Under the settlement, Apple had said it would allow developers to share information about payment methods outside of apps with its users — a move the iPhone maker had previously limited
According to George, until right now, the conversation was around advocacy – bringing attention to the issue and that it affects large segments of app store beneficiaries.
“It has now sharply shifted towards legislation. It sets a precedent and shows India the way forward on how to take on the issue i.e. legislation. The fact that it was a near-unanimous decision, with 180 of the 188 in favour, makes it all the more significant,” he told Inc42.