Google has pushed back the introduction of a new Play Store billing policy in India after facing a backlash from developers and a growing push for an alternative independent app store.
The company postponed the enforcement of a 30 per cent fee on some in-app payments from September 2021 until April 2022 after facing an outcry from more than 150 start-ups in India, including leading digital payments company Paytm.
In a statement on Monday, Google said it was “extending the time for developers in India to integrate with the Play billing system” and that it was holding talks with app developers to clarify its policy.
Google said that its move to enforce the fee, which already applies to digital goods and services sold within apps, would affect “less than 3 per cent” of apps in the store, since most were already in compliance with it. Companies such as Netflix and Paytm had previously worked around this fee by getting subscribers to pay for their services via their websites.
“We want to reiterate that we are deeply committed to the success of the Indian ecosystem,” said Purnima Kochikar, a business director at Google Play. “We are setting up listening sessions with leading Indian start-ups to understand their concerns more deeply.”
The growing resistance in India to Big Tech’s supremacy comes as other companies around the world are working to fight against Google and Apple’s app store policies.
Last month, a group of 13 app publishers launched the Coalition for App Fairness. The coalition, which includes Fortnite parent Epic Games and streaming service Spotify, is pushing for “fair competition” across the app ecosystem and for the removal of Apple’s 30 per cent “app tax”.
India, the world’s second-biggest internet market, is the only country that has been granted an extension to comply with the new billing policy, said Google.
The extension comes after Google temporarily banned Paytm, India’s most valuable start-up, worth $16bn, from its Play Store in September for violating its anti-gambling policy, leading Paytm founder Vijay Sharma to publicly criticise the search giant.
In the following weeks, momentum against Google accelerated and the coalition of start-ups started exploring a formal alliance and the potential for a new independent app store.
The pushback in India is taking place just months after Google announced large investments in the country, including $4.5bn to Mukesh Ambani’s Jio Platforms and $10bn in new investments over the next five to seven years.
Google is a big player in India, where the vast majority of people use Android phones. More than 265m people also use YouTube, and GooglePay is one of the biggest digital payments providers.
“I’m very surprised by Google pushing [the fee] back until 2022,” said Jayanth Kolla, founder of Convergence Catalyst, a consultancy in Bangalore. “The company doesn’t want to flirt with trouble at this time.”
Mr Kolla predicts that even with Google’s commitment in India, opposition will grow. “In India there is a sudden rise in muscle, confidence and ambition,” he said, “This could go anywhere, these are early days.”
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