After the landmark South Korean ruling that bars Google and Apple from forcing software developers to use their payment systems, a number of Indian startups and digital companies are now planning to reach out to the government to bring similar rules.
These players have alleged that Google and Apple are misusing their monopolies in India, which is hurting the local startup ecosystem. They want action from the Indian government on these tech majors that insist on the use of their proprietary payment systems while charging a commission of up to 30% for purchases made on their app stores.
South Korea has become the first country in the world to pass rules which force Google and Apple to let developers direct users to pay through alternative platforms with an aim to promote fair competition. The move also side steps up to 30% commissions over app-related purchases.
The Alliance of Digital India Foundation (ADIF) said that the South Korean ruling sets a precedent that will ”find resonance within government circles.”
The 350-member strong group was formed earlier this year to protest Google’s move to impose a hefty commission for in-app purchases on its proprietary store. Digital companies like Paytm, GOQii, Innov8 and BharatMatrimony are its founding members.
ADIF said that it will “re-engage” with officials at the ministry of electronics and IT (Meity). Notably, ADIF’s campaign led to India’s anti-trust regulator, the Competition Commission of India (CCI), opening an investigation into the issue in November.
Paytm, which is the second most valuable startup in India, also applauded the South Korean ruling. The company’s founder Vijay Shekhar Sharma tweeted, “this is a key milestone for the mobile internet age! India should also give freedom to millions of young startups, do business using their preferred payment systems.”
Rakesh Deshmukh, CEO and co-founder, Indus App Bazaar said that alternative payments are always welcome but “we need diversified distribution to establish the level playing field for app distribution. With this positive move and if diversified distribution gets allowance on Android, Indus App Bazaar will be able to launch a consumer-facing solution for India.”
The Indus App Bazaar, formerly known as the IndusOS app store, has over 100 million monthly active users in the country.
Notably, the Indian government previously nudged startups that it may not intervene in the issue as it relates to the policies of private companies, which are driven by profits. However, the IT ministry, known as MeitY, is also scaling up the state-owned app store to provide a level playing field for local app developers. The “Mobile Seva” App store currently hosts only governance-centric apps, and the government may launch a full-fledged app store for everyone in line with Prime Minister Narendra Modi’s self-reliant vision.
iPhone-maker Apple had last week changed its App store policy to allow app developers to email their users about non-Apple purchase options. The move was in line to assuage the concerns of app developers globally.
Indian startups, however, believe that Apple’s latest policy tweak and previous steps by Google are mere “eyewash” that do nothing to solve the problem.
“..there is ( now) a case for regulation, which will find more resonance with the government, following South Korea’s regulatory strike,” Sijo Kuruvilla George, executive director of ADIF was quoted as saying by the Economic Times.
“…we agree that it is clear that the quantum of the commission whether it is 30% or 20% should be decided by the market forces but there are lots of other issues such as enforcing arbitrary policies to govern the marketplaces which require regulation…From the point of view of the users’ freedom of choice and the prevention of abuses in the marketplace, there is a case for regulation that is now stronger since we have precedence of a legislation,” he told the publication.