Google misusing dominant position to exploit small businesses, App developers says

Union Minister Ashwini Vaishnaw had earlier said that the startup ecosystem is key to the Indian economy and their fate cannot be left to any big tech to decide.
Last Updated 04 March 2024, 17:12 IST

New Delhi: Google is misusing its dominant position in the market to exploit Indian startups, as well as violating competition watchdog CCI's ruling and Digital Personal Data Protection Act by charging unjustified exceedingly high charges, Indian app companies body ADIF said on Monday.

In separate meetings with Minister of State for IT and Electronics Rajeev Chandrashekhar, and Union Minister for Railways, Communications and Electronics and Information Technology Ashwini Vaishnaw, the troubled startups voiced out their concerns and sought support from the government.

“The government has assured us support for both immediate resolution and long-term framework. They extended support for our concerns, which were mainly about discriminative pricing, arbitrary revenue share, and Google misusing its dominant position in the market,” Alliance of Digital India Foundation (ADIF) said.

Union Minister Ashwini Vaishnaw earlier said that the startup ecosystem is key to the Indian economy and their fate cannot be left to any big tech to decide.

"Government will continue to work towards a level playing field for big and small firms alike while creating an ecosystem that will catalyze growth for startups," MoS Rajeev Chandrashekhar said.

Vinay Singhal, CEO of the Stage OTT app, which was also delisted by the Google Play Store on Friday, said that Google is misusing its dominant position in the market and price gouging to extract unnecessary exorbitant revenue out of small start-ups.

"Most payment gateways charge 0.5-2 per cent charges, whereas Google charges 15-30 per cent for the same. Google is using its dominant position to price itself at a 30 per cent revenue share, without giving any justifications," he said.

“The service of Google Play Store remains the same for big names like Amazon, Uber and relatively smaller players like Kuku FM, Stage, Kutumb, and Truly Madly, but there is discrimination in charging where they are charging 15-30 per cent from small apps, while they are charging nothing from the big names,” said Snehil Khanor, Co-founder and CEO of Truly Madly, a matchmaking app.

The founders said that they are obligated to use Google’s API (Application Programming Interface) while implementing any Google model, which gives them access to all of the company’s customer data, which is a clear violation of Competition Commission of India's (CCI) order.

“In the name of real-time billing, they want access to all our data. Moreover, Google has also asked for audit rights, which is an infringement of the Digital Personal Data Protection Act (DPDP),” they said.

More than 200 apps have been delisted by the Play Store, out of which less than 15 apps have been reinstated.

“The apps that have been reinstated are those that have complied with Google’s policies. Most of us had to comply to get reinstated to maintain our visibility. People started considering us as a fraud because they are unaware of what is actually happening”.

The troubled founders said that their revenues dropped by more than 40 per cent in the last three days since they were not acquiring any new customers. Google’s action has put a halt on our businesses, they echoed.

“Kuku FM was leading with over 40 lakh downloads and around 10 crore revenue per month, which has now been halted to absolutely zero. Google's unjustified move is proving detrimental to small businesses,' Co-founder and CEO at Kuku FM, Lal Chand Bisu said.

On Friday, Google said 10 companies in the country, including 'many well-established' ones had avoided paying fees despite benefiting from the platform and Play Store, and proceeded to delist some apps.

Google asserted that allowing a small group of developers to get differential treatment from the vast majority of developers who are paying their fair share creates an uneven playing field putting all other apps and games at a competitive disadvantage.

(Published 04 March 2024, 17:12 IST)

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