Why did Google De-list some Indian Apps from Play Store?

07-03-2024

09:42 PM

1 min read

What’s in Today’s Article?

On March 1, Google announced that it was pulling the apps of almost a dozen firms out of its marketplace for Android apps.
However, after the Ministry of Electronics and Information Technology intervened, the apps were restored subsequently, but the issue remains unresolved.

At the heart of the issue is Google’s platform fees.
For all in-app purchases that involve a purely digital service — such as an e-book purchase or an OTT streaming subscription — Google collects a fee of anywhere between 11 to 30% per transaction.
This fee, Google argues, helps the company pay for Google Play and develop the Android ecosystem.
The exact fee paid by each developer varies.
- For example, if a developer is using Google’s own billing product, and is offering a recurring subscription service, or if they make less than $1 million a year in revenue from in-app payments, the company charges 15%.
- For app purchases for bigger firms, the amount is 30%. In India and South Korea, where regulatory scrutiny on these fees has been among the most intense, Google collects 11% or 26% in fees if developers choose to use a different payment method.
However, Indian developers — like many global counterparts — see these fees as a high price to pay.
Some, including Bharat Matrimony and Disney+ Hotstar, approached the judiciary at different stages to avoid paying the fee altogether.

Apple has not faced similar pushback in India, as relatively fewer Indians use its products.
Android, however, dominates the smartphone market, and Google Play is widely seen as the best bet for developers who want to be discovered by consumers.
However, both Apple and Google have faced serious international resistance to these fees, and both firms have pushed back strongly against developers’ resistance.
For example, the music streaming firm Spotify filed a complaint with the European Commission, after Apple stopped Spotify from telling its users how to pay for its service using a browser to avoid the App Store’s fees.
Additionally, Spotify said this was anti-competitive because Apple Music was not subjected to the 30% barrier that was erected for Spotify.
Following the complaint, Apple was hit with a €1.84 billion fine by the European Commission, which ruled that it had fined the company over “unfair trading conditions”.
Similarly, in the U.S., Epic Games, the developer of the popular Fortnite franchise, sued Apple as well as Google over the 30% fee.
Unlike Apple, Google allows third party app stores around the world, something that gives app developers a little more leeway in avoiding these fees.
But Google Play comes installed by default on most Android phones.

The Competition Commission of India (CCI) had in 2022 fined Google Rs. 936 crores for its Play Store policies.
The company is in the process of appealing that fine, as well as orders by the CCI that it give developers comprehensive choices for in-payments.
An appeal by Google against this fine is pending at the National Company Law Appellate Tribunal.
Meanwhile, the Indian apps that went to the Court are back on the platform for now.
In-app payments are not yet a major part of the digital economy in India, as purely digital services for which Indian consumers have been willing to pay have been limited to content streaming, dating and matrimonial service.

The Competition Commission of India (CCI) is a statutory body established in March 2009 under the Competition Act, 2002.
Objectives:
- Eliminate practices having adverse effect on competition
- Promote and sustain competition
- Protect the interests of consumers
- Ensure freedom of trade in the markets of India
The CCI aims to establish a robust competitive environment through:
- Proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions
- Being a knowledge intensive organization with high competence level
- Professionalism, transparency, resolve and wisdom in enforcement
The Commission consists of one Chairperson and six members who shall be appointed by the Central Government.

Ensure consumer interests are protected in the market
Implement the policies enumerated in the Competition Act, 2002
Advocate and educate other Government bodies about the Competition Act, 2002. Such as state governments and ministries etc.
To promote fair and constructive competition practices in the market
To prevent the realisation of anti-competitive agreements
To cooperate with other regulatory bodies to work more efficiently in ensuring the continuity of a free and fair market

The Competition Commission of India has the power to inquire into a certain agreement as well as the dominant position of enterprises.
It has the power to inquire into any acquisition or combination if it determines that such acquisition or combination may adversely affect competition in the Indian market.
It has the power to regulate its own procedures.
It has the power to impose monetary penalties upon violation of the Competition Act, 2002.
It has the power to pass an interim order for any act where there has been anti-competition agreements or abuse of position by dominant parties which adversely affects the competition in the market.

Insider trading is the trading of a public company's stock or other securities based on material, nonpublic information about the company.

The Federation of Indian Chambers of Commerce & Industry is a non-governmental trade association and advocacy group based in India

Source: Why did Google delist some Indian apps from Play Store? | Explained