Statement | ADIF calls Google’s commission cut a deflect & distract tactic; to double down on efforts to protect fair competition and developer choices in app economy

The announcement does nothing to address the issues and challenges of scores of developers.

The recent announcement by Google, related to changes in PlayStore pricing, points to an admission of guilt and unfairness on Google’s part in their PlayStore policies. While Google has attempted to address one aspect of the unfairness - high prices (albeit in a half-hearted manner), the more important aspects related to anti-competitive practices – of restricting other payment providers to operate in their app economy and allowing a choice of payment provider to developers, remain unaddressed & unresolved still. 

The announcement might come as a source of happiness for the subset of developers who are already on the Google billing system. The cut will improve their margins – should they fall into the “right” categories that the company deemed fit for Google’s relaxation in margins. 

The announcement does nothing to address the issues and challenges of scores of developers who stand to be affected by the earlier announcement by Google of forced adoption of their billing system by March 2022. Moreover, apart from the additional work they would have to undertake, both with integration and re-onboarding of customers, almost all of them would see their margins get thinner owing to migrating to a much higher commission rate (30%/15%) from the present rates (1%-2%) being levied by their existing payment providers. 

The differential pricing system that Google is attempting to implement with this announcement is also 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. 

“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. It has never been 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,” said ​​Sijo Kuruvilla George, Executive Director, ADIF. He added: “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”

ADIF urges Google to pay heed to the concerns of all developers, and not just the ones already on their billing system. We have maintained that Google must be fair and end the ongoing anti-competitive practices in the name of PlayStore policies. The matter has been challenged, is being studied by CCI and is awaiting verdict. 

Until the investigation is complete, let's all pledge to maintain the status quo – the prayer of our petition to the CCI as well seeking interim relief. This remains our interim appeal to Google as well. 

Founded in 2020, ADIF (Alliance of Digital India Foundation) is an industry body for India’s digital startups formed to fully capitalise on the sector’s promise with the objective of its long-term prosperity in mind. ADIF aims to transform the Indian startup ecosystem into the top 3 globally by 2030.

Among the issues ADIF is working on, we are fighting Google and Apple on their app store monopolies.

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