The Alliance of Digital India Foundation (ADIF), a think tank with more than 440 digital startups, has called Google’s move to slash Play Store commission for apps that offer subscription services nothing but a reduced ‘lagaan‘ (tax).
In a blogpost Friday, Sameer Samat, Vice-President, Product Management, Google explained that 99 percent of the developers qualify for a service fee of 15 percent or less and these changes were made after learning from and listening to developers across many industries and regions, including developers like Bumble, Calm, Duolingo, PicsArt and Smule, and will help them “build sustainable businesses”.
Samat also pointed out that eBooks and on-demand music streaming services, where content costs account for the majority of sales, will be eligible for a further decrease in its service fee, which can be as low as 10 percent.
However, ADIF in a blog post has alleged that Google has not addressed the larger issue of allowing other payment choices for the developer ecosystem.
“The differential pricing system that Google is attempting to implement with this announcement is unfair and arbitrary. As per the announced policy, different categories of apps would attract different tariffs while being provided exactly the same level of service. Moreover, such pricing structures would further distort market forces to the detriment of all,” a statement by the think tank read.
Sijo Kuruvilla George, Executive Director, ADIF, in a statement, said, “The fact that Google is able to unilaterally declare and dictate prices, as is evident from this announcement as well, lies at the heart of the issue. What developers are asking for is fairness and not benevolence in the form of “reduced” commission percentages.”
He asserted that It was never about the percentages. “Price discovery should be left to the market forces. As long as Google gets to unilaterally dictate prices and people don’t have choices, it’s still a lagaan – be it 30, 15 or even 2, the percentages do not matter. Deflect and distract seems to be what’s in play here. The portrayal and grandstanding, as a measure that fully acknowledges and addresses the concerns of developers, is misleading and objectionable,” he added.
Rakesh Deshmukh, Co-founder and CEO of Indus OS, an Indian app and content discovery platform welcomed the move by Google. “This is a good move that is favourable for developers. What is interesting to understand here is that these are unidirectional terms that can be altered any day by Google. We have to create an environment where there is the true competition to protect developers and user interest, and the market determines the right commission.”.
Deshmukh believes that even though it is a good decision it won’t change the ongoing problem. “This move shows that Google can work with lower commissions. We witnessed Apple doing the same in Japan. What is the end game? How do these tech giants decide on exempted categories that remain as opaque as their platform policies?”
Last year, Google said that developers would have to pay a flat 30 percent commission on all in-app purchases but deferred its implementation to April 2022 following backlash by Indian startups.
Earlier in the month, ADIF filed a petition before India’s antitrust regulator seeking interim relief against Google’s new Play Store policy. Competition Commission of India (CCI) is investigating Google for alleged abuse of market dominance of its app store, the Android operating system, and its billing policy.
Meanwhile, Google acknowledged in a blog post that subscription model business faced specific challenges in customer acquisition and retention. “To help support the specific needs of developers offering subscriptions, starting on January 1, 2022, we’re decreasing the service fee for all subscriptions on Google Play,” the post added.
It is worth noting that Apple also faced a similar case in India. A non-profit called Together We Fight Society filed an information with the CCI opposing the 30 percent commission charged by Apple.