How Does Google Own You? Understand the Grand Google Geopolitics Strangling Small Biz

The battle between Google and Indian startups over in-app billing has been ongoing for almost a year now. Indian startups have exhaustively explored various forums and platforms and have knocked the doors of National Company Law Tribunal (NCLT), the Competition Commission of India (CCI), High Courts, the Supreme Court, and even direct government appeals, alleging that Google's monopoly is detrimentally impacting their businesses. In contrast, Google remains unwavering in its refusal to revert to the previous billing rates, taking the drastic step of delisting Indian startup apps that resist the implementation of the new rates.

After the Supreme Court's refusal to prevent Google from delisting the apps, the government stepped in, asking Google Play Store to relist the Indian startups. However, this apparent resolution is deceptive. The matter remains far from settled, navigating the complexities of listing, delisting, and relisting these apps.

The prominent Indian startup founders have been taking up the matter on the social media platforms, but all the efforts come down due to the harsh reality of Google's Monopoly in the Indian market.

Anupam Mittal, Founder, Shadi.com writes, "Many startups pay anywhere between 20-50% as Google Tax to get distribution & protect their own brand from bidders. It’s the Digital East India Company."

To gain a comprehensive understanding, let's have a look at the core issues, the perspectives of Indian startups, Google's stance, and the constraints faced by the government in assisting these startups adversely affected by Google's policies. 

Senior Policy Expert, Mr. Yatish Rajawat, in a conversation with TICE News, elucidated the history and prevailing issues between Indian startups and Google. 

Yatish Rajawat tells TICE News, "At the heart of the tussle is money, or the amount of money Google charges these app for access to Indian mobile user. Google owns mobile phones, as more than 94 % of the mobile phones in India run on Android, an operating system that Google owns. Google controls access to that mobile phone. Any APP maker if it wants access to the mobile user it has to go through the Google Play Store where the user can search and download the app. 

For the user, Android Operating System is free compare this to the laptop where you typically pay separately for mostly Windows OS or you pay for MS office apps separately. In the mobile world the user do not pay for the Android OS or even for the Apps. App makers also do not charge you for the APP download they charge you for specific service on the app.

But when you pay for a service on the APP Google demands a share of that revenue from the APP maker. Not just demands Google actually takes it for every transaction that it routes through the GPBS Google Play Billing System. Its not a small amount Google takes anywhere between 11 per cent to 30 % of the consumer spend. This is the point of contention that the Indian APP companies like Bharat Matrimoney, Naukri.com , Shaadi.com,  99 acres.com etc."

What is the Issue?

At the core of the ongoing clash between Google and Indian app companies lies a financial dispute revolving around the fees Google charges for access to Indian mobile users. The dominance of Android, owned by Google, in the Indian mobile market, with over 94% of devices operating on the system, grants Google a significant control over access to these users. To reach consumers, app developers have no option but to go through the Google Play Store, where users can search for and download applications.

In contrast to the traditional laptop model where users pay for the operating system separately, Android OS is free for mobile users. The revenue model for app makers does not involve charging users for app downloads but rather for specific services within the apps. The bone of contention arises when a user pays for a service, and Google demands a share of that revenue through the Google Play Billing System (GPBS), claiming a commission ranging from 11% to 30%.

The Competition Commission of India (CCI) Dilemma

Initially, Indian app companies, including Bharat Matrimony, Naukri.com, Shaadi.com, and 99acres.com, approached the Competition Commission of India, alleging anti-competitive behavior by Google, given its near-monopoly and control over access to Indian mobile users.

According to the expert, CCI's response in 2022, involving a minor fine and an order for more payment choices, was perceived by many as a missed opportunity to challenge Google's monopoly effectively.

"Initially they had gone to CCI as they felt that this was anti-competitive behaviour as Google is almost a monopoly and controls access to Indian mobile users. Google managed CCI case much better than the Indian App companies and got away with a minor fine and an order in 2022  asking it to offer more payment choice. CCI lost an opportunity to open up the monopoly control that the tech company has over india," Mr Rajawat explains.

What Was Google's Response on User-Choice Billing (UCB)?

In response to the CCI order, Google introduced User-Choice Billing (UCB), allowing developers to use alternative payment methods like UPI, credit cards, and net banking. However, it continued to impose a commission of 11-26%, which app developers deemed unsustainable. Google now offers app makers three choices: GPBS, UCB, or a "consumption-only" mode, where in-app purchases are disabled, and users must make payments externally on a browser.

The App Companies' Stand and Supreme Court Intervention

Refusing to comply with Google's terms, Indian app companies faced delisting threats. In an effort to prevent app removal, they approached the Supreme Court, seeking relief. Despite their plea, the Supreme Court, on February 9, refused to restrain Google from delisting non-compliant apps. Faced with the imminent threat of business disruption, some app companies reluctantly agreed to Google's terms.

Government's Limited Role and Cracks Among App Companies

In a bid to protect their interests, app companies sought government intervention. The Minister of IT Mr Ashwini Vaishnaw stated that delisting would not be allowed. However, the government's jurisdiction in this commercial matter is limited, and the ongoing litigation in the Supreme Court further complicates its role. Additionally, internal divisions emerged among the app companies, with some succumbing to Google's pressure and agreeing to the terms, leading to reinstatements.

Mr Yatish Rajawat provided insights into the crux of the matter. He emphasized the unique aspect of Google not charging users for the Android OS but instead levying fees on app companies through GPBS. This billing system, charging up to 30% without providing the service, led Indian app companies to perceive it as an abuse of Google's monopoly power.

He highlighted how Google strategically handled the CCI case, introducing UCB as an apparent solution but with continued high commissions.

Google Relisting The Indian Startups

Google reinstated almost all the delisted apps on its playstore. Reacting to this, Anupam Mittal, Founder, Shaadi.com wrote on X, "Thanks to the tireless efforts of a handful of founders & ur support, the Indian startup ecosystem sighed a sigh of relief yesterday when Google was compelled to defer its decision to impose monopolistic Lagaan, albeit temporarily. This was possible only due to the intervention of @BJP4IndiaMinisters Shri@AshwiniVaishnaw & Shri @Rajeev_GoI

 who acted with such alacrity & agility that it would put most startups to shame. Today, most of the delisted startups are back up with in-app billing as before. A 120-day period has been agreed upon to come up with a solution that is non-monopolistic & reflects free-market forces. This is required for long term viability of Indian startups & a thriving digital economy that can create millions of jobs. We continue to assert that Google transaction charges & policies are arbitrary, selective, unilateral and disproportionate, reflecting a blatant misuse of dominant power which will crush the local digital economy while Google continues to provide the same services for free to cos like Uber and Amazon. Thx again for ur support."

What Possibilities Does The Future Hold For Indian Startups?

As the Supreme Court denies appeals and Google starts reinstating compliant apps, the landscape of app billing in India is evolving. The rift among app companies, coupled with the limited government intervention, indicates that complying with Google Play Store policies may become inevitable for the majority. With alternatives like Indus Play Store emerging, challenges like pre-installation, efficiency, and marketing pose hurdles to becoming a true competitor to Google Play Store.

The clash between Google and Indian app companies sheds light on the intricate dynamics of app billing, monopoly challenges, and the evolving digital landscape in India. The Supreme Court's decision and potential future legislation, such as the Digital India Act, may play critical roles in shaping the future of digital platforms and their relationships with app developers.

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