Google’s Non-Compliance to Hit Indian Startups Hard, Says Alliance of Digital India Foundation

Indian Startups Voice Concerns Over Google's User Choice Billing System Non-Compliance, Citing Negative Impact on Startup Ecosystem.

The Alliance of Digital India Foundation (ADIF) recently held a meeting with leading startups in the country to discuss the implications of Google’s User Choice Billing system. Attendees, including Paytm, TrulyMadly, Shaadi.com, and Matrimony.com, expressed concerns that Google’s non-compliance with the Competition Commission of India (CCI) orders would negatively impact the Indian startup ecosystem. The ADIF spokesperson stated that the organization is exploring all avenues to challenge the said policy as being in violation of the CCI order and Competition Act.

Google’s Recent Billing Requirement Change

Google recently changed its billing requirement for app developers. Under the new policy, if a user pays through an alternate billing system, the Google Play service fee will be reduced by 4 percent. However, an alternative billing system will be permitted by Google, but it will continue charging service fees from the developers which will be 4 percent less than the normal service, meaning the commission rate under user choice would be 11 percent or 26 percent.

Impact on Indian Startups

Google’s non-compliance with the CCI orders could hurt Indian startups, which are already struggling with high costs and limited resources. The ADIF spokesperson said that Google’s policy is a blatant attempt to violate the decision of the CCI and that the organization is exploring all avenues to challenge the said policy as being in violation of the CCI order and Competition Act.

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CCI’s Penalty on Google

The CCI had imposed a penalty of INR 936.44 crore on Google in October last year for abusing its dominant position with respect to its Play Store policies, apart from issuing a cease-and-desist order. The Commission also directed Google to modify its conduct within a defined timeline.

Supreme Court’s Refusal to Modify the Court’s January 19 Order

Earlier this month, the Supreme Court refused to entertain a plea by Google seeking modification of the court’s January 19 order and asked the tech giant to raise its objections before the National Company Law Appellate Tribunal (NCLAT). In January, the apex court had declined to entertain a plea by Google challenging an NCLAT order, which refused to stay the operation of the Competition Commission of India (CCI) order imposing a fine of INR 1,337.76 crore on the tech giant.

Conclusion

Google’s non-compliance with the CCI orders could have a severe impact on Indian startups. The ADIF is exploring all avenues to challenge the policy as being in violation of the CCI order and Competition Act. Startups are already grappling with high costs and limited resources, and Google’s policy could add to their woes. It remains to be seen how this issue will be resolved and what impact it will have on the Indian startup ecosystem.

References:

  1. Sme Times. (2023, February 28). Google’s non-compliance to hit us hard: Leading Indian startups. Retrieved from http://www.smetimes.in/smetimes/news/top-stories/2023/Feb/28/google-copliance-startups90781.html

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