Govt to meet Google, startup executives over app issue on Monday | Company News

Eight of the 10 startups that were delisted from Google Play Store on Friday are now back online, with the remaining two also in the process of their return — after they accepted a compromise formula offered by the US technology giant. 

The relisted apps include Naukri.com, Jeevansathi.com, Shaadi.com, and Bharat Matrimony.

Ashwini Vaishnaw, the Union minister for communications, electronics, and IT, who intervened in the contentious issue on Saturday, has scheduled a meeting with the two sides for Monday. Speaking to Business Standard, Vaishnaw stated: “We will continue to support the startup ecosystem. App developers and Google teams will meet tomorrow (Monday) and explain their viewpoints.”

Under Google’s new formula, it will relist the apps on Play Store for free, provided any transaction on those apps does not take place through Google’s billing system. These apps can use any third-party payment channel through their respective websites and are not obligated to pay a commission of 15 to 30 per cent (which includes 4 per cent for transactions through Google’s own billing system). However, those that continue to use Google’s payment system will still have to pay the commissions.

Startups have expressed dissatisfaction with Google’s action of delisting without providing adequate notice. They are concerned that the hefty commissions being demanded will force them to pass on the burden as a “Google tax” if they want to survive.

Startups and other app developers argue that Google is giving differential treatment to Indian developers. They point out that the new formula offered has already been implemented or is in the process of being implemented in the European Economic Area and the UK. In the EU, as a pre-emptive compliance measure, Google has allowed app developers to offer only their preferred payment processes and not offer the Google payment system at all. A similar proposal is under discussion in the UK.

Many startups have argued that, in addition to being large advertisers on Google, they are now also paying substantial commissions for being on the app store and conducting transactions, which they deem unfair. 

Sources familiar with the development say that Google took action on delisting only after the Supreme Court did not grant any interim relief to the petitioners, including these startups, challenging the tech major’s billing policy, against delisting the apps. Even then, Google waited for a substantial period and started to delist from March 1, leaving a significant amount of time in between, they said.

In their discussions with app developers, the sources said, Google has made it clear that the commission is based on their business expectations and is a commercial contract, and that developers have a choice not to use its app store. It further argued that the startup ecosystem does not get impacted as the majority of the app developers don’t pay in any case.

In a statement to the Standing Committee of Finance, Google stated that only 3 per cent of the app developers are subject to the service fee while the rest, 97 per cent, can distribute their app on Play Store and utilise all the developer tools and services at no cost. Apple Inc. reported a similar situation, stating that 87 per cent of the developers do not pay Apple any commission at all.

First Published: Mar 04 2024 | 12:55 AM IST