Google’s move to cut commission a distraction tactic, says ADIF

The ADIF, which represents a group of Indian digital startups, said it will continue its efforts to protect fair competition and developer choices in the in-app economy.

October 23, 2021 01:48 pm | Updated 01:49 pm IST

Image used for representation purpose.

Image used for representation purpose.

Google's move to reduce commissions charged to app developers on in-app purchases is a tactic to "deflect and distract", according to the Alliance of Digital India Foundation (ADIF).

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The ADIF, which represents a group of Indian digital startups, said it will continue its efforts to protect fair competition and developer choices in the in-app economy.

On Thursday, Google reduced the commission for in-app purchases to 15% from 30% , effective from January 1, 2022 following growing pressure from developers. In the past, Apple and Google have drawn severe criticism from developers over the steep 30% app store commissions.

"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," ADIF Executive Director Sijo Kuruvilla George said in a statement.

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He added that 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. 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,” he said.

Many Indian startups had raised concerns around the steep charge, while some were of the view that India needs a local app store to provide more choice to consumers.

The ADIF argued that 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 .

It urged Google to pay heed to the concerns of all developers, and not just the ones already on their billing system.

Founded in 2020, ADIF (Alliance of Digital India Foundation) is a think tank for India's digital startups. Its members include Paytm, GOQii, MapMyIndia,, TrulyMadly and others.

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ADIF claimed that apart from the additional work they (developers) 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.

"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. 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," ADIF further said.

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Rakesh Deshmukh, co-founder and CEO of Indus OS, said there is a need to create an environment where there is the true competition to protect developers and user interest, and the market determines the right commission.

"Innovation is stifled when the developer is charged a commission at the source. We welcome conversations on in-app payments that are being raised globally. A revolution in in-app payments is possible when there is acceptance and availability of alternative distribution to the Google Play Store on the Android platform," he added.

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