Google claimed on May 17 that less than 60 of over 200,000 Indian developers on Google Play could be paying a service fee of more than 15 percent, in an attempt to indicate the minimal impact of the app marketplace’s contentious new payment policy on app developers in the country, as the company gears up to enforce it here.
This move comes amid an ongoing standoff with several local developers who have sought the suspension of this policy, claiming it is in violation of CCI's October 2022 antitrust order on Play Store policies. On May 12, CCI stated that it needed to inquire whether the policy complies with the antitrust watchdog's earlier directives. The case is set to come up for hearing again next month.
In a blogpost on May 17, Google however claims that its updated payment policy is compliant with CCI's order that had directed the tech major not to restrict app developers from using a third-party billing system among other things.
"In 2020, we clarified the requirements of our Payments policy and developers in India have had considerable time to make the necessary changes to their apps. We are respectfully following the CCI’s October 2022 order, and in compliance with that order, we expanded user choice billing to all developers in India and updated our policy that went into effect starting April 26, 2023" the company stated in a blogpost.
Google had paused the enforcement of its in-app billing system in India in November 2022, following the CCI's antitrust order. The policy has already been made mandatory for in-app digital content purchases for users outside of India.
Allowing third-party billing for developers
As per Google Play's new payments policy, that was introduced in February 2023, the company is allowing app developers to offer an alternate billing system for in-app purchases alongside Google Play’s own billing system.
If a user pays through the alternative billing system (also termed as user choice billing system), the transaction will still be subjected to a service fee, but at a 4 percent rate reduction, which the firm believes "fairly reflect that Google Play’s billing system has not been used"
This effectively means that developers will have to shell out a service fee to Google ranging from 11-26 percent for in-app purchases and subscriptions, depending on the type of app/service and the annual revenue it generates on Google Play, as compared to the regular 15-30 percent service fee.
The commissions are further lower for specific media apps offering video, audio, or books that qualify for the company's initiatives such as Play Media Experience Program.
India is among the biggest markets for Google Play in terms of app downloads and users. The country is also emerging as a key monetisation opportunity for Google Play, driven by the rising adoption of digital transactions.
Read: Google tweaks Android licensing terms in India, allows third-party billing for all apps
'Lowest app store rates'
Google states that the service fees it levies from app developers enables the company to fund its investments in Android and Google Play that helps developers go to market faster, and reach global audiences while providing a secure experience to consumers.
It also helps them identify growth opportunities, understand their audience and monetise their apps across over 180 global markets.
The Android maker claims that its fees are the lowest rates of any major app store across the world.
"Our investments in Android and Google Play would not be sustainable without our service fee model" Google stated in the blogpost.
The firm is now informing developers who have not yet implemented any of the three billing options — Google Play's own billing system, an alternate billing system alongside Google Play's, or operating on a consumption-only basis (without any service fee) — that it will be taking "necessary steps" to ensure fair application of its policy.
Once developers are notified, they will have two weeks to make the requisite changes to their apps as per Google's policy requirements, Moneycontrol has learnt.
"We continue to comply with local laws and cooperate with local proceedings, as applicable," the company mentioned.
Alliance of Digital India Foundation (ADIF), a New Delhi policy think tank comprising prominent Indian internet companies such as Matrimony, Paytm, MapmyIndia, TrulyMadly and other local entrepreneurs, meanwhile claims that the tech giant is "representing factually incorrect information" that it is compliant with the order and its user choice billing policy is also fully compliant.
"As the matter is still sub-judice, Google mandating app developers to either comply with their policies or will face actions, including deletion from Play Store, is a clear case of abuse of dominance" an ADIF spokesperson said.
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