• Google Play will collect a 30% commission on in-app purchases from 2021
  • Indian startup founders called these charges "unfeasible"
  • Google's Android holds a 95.8% market share in India

More than 150 top Indian startups and businesses, some of them big names, have banded together to challenge Google's monopoly over the Android app ecosystem in India and build an app store that the country can call its own, TechCrunch reported.

The move by Indian businesses to to build a national altenative to Google Play was prompted by Google's recent annoucement to force app developers on its store to use its payments system, which takes a 30% cut on transactions including in-app purchases. Reports said founders of leading startups like Paytm, a payments app simiar to Google Pay and is India's most valuable startup; MakeMyTrip and PolicyBazaar discussed Google's policy and the concerns on dependence on Google on a call.

It is not yet clear how far the effort has progressed.

TechCrunch said without naming any sources that dozens of executives “from nearly every top startup and firm” in India attended the call Tuesday and agreed that a Google's 30% cut was "simply unfeasible" and will hurt Indian businesses. It said the meeting discussed Google's "monopolistic" hold on India, which has one of the world’s largest startup ecosystems, and what the executives alleged were unfair and inconsistent enforcement of Play Store guidelines in the country by Google.

Google Play Store
Google's new Play Pass subscription service gives users access to hundreds of apps and games from the Play Store. REUTERS/Stephen Lam

Last month Google reiterated Play Store’s gambling policy and even pulled Paytm's app from the store for some time, citing repeated violations of the policy. Google leads the mobile payments market in India, and is a direct competitor to Paytm in the space.

Goolge also sent notices to OTT platform Hotstar and food delivery startups Swiggy and Zomato, reports said. The companies haven't responded to the reports.

Paytm app was pulled for adding a fantasy cricket tournament that the company recently included in the app, the Android-maker had confirmed. Although the app was back in Play store after a few hours, the ban sent shock waves through the Indian startup ecosystem which was hoping to cash in on the wildly popular Indian Premier League cricket that is currently on.

Paytm co-founder and CEO Vijay Shekhar Sharma is at the forefront of the initiative to a national alternative to Google Play and tweeted soon after his company's app was restored:

“Thanks everyone for your support! Paytm App is back, live in Play Store. We launched a UPI CashBack campaign this morning. Our app got suspended by Google for this. India, you decide if giving cashback is gambling.”

Sharma also said in a television interview later that Indians should know that digital business in the country are not running under its rules and regulations. "If we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations,” he said.

The Silicon Valley giant shared data that showed that consumer expenditure on apps and games developed by Indian developers doubled in 2020 from a year ago, according to the NDTV report. Likewise, figures by Statcounter show that in India’s OS market, Google’s Android held a 95.8% market share in August 2020.

The idea of an alternative to Google Play that will charge a lower service fee is not just keeping in mind the revenue for developers, but is also about an India-based platform that will encourage and help local apps, Vishal Gondal, founder of platform GOQii, told NDTV Gadgets 360.

Another app that took the hit from Google's allegedly opaque policy enforcement was Doosra, which offers users a virtual mobile number to filter out spam calls. It was pulled from the Play store just a week after its launch Sept. 15 and its founder Aditya Vuchi told NDTV Gadgets 360 that it took his team 48 hours to convince the Google Play store team to bring back the app.

“India needs a local app store long term, else 30% tax will eat up most businesses, is anyone trying to build one?” tweeted Harshil Mathur, CEO of payments gateway RazorPay.

The Indian startups' concerns may have some merit. TechCrunch quoted Vivek Wadhwa, a fellow at Harvard’s Law School, who likened Google’s hold over India to the rising days of the East India Company. The British trading company was formed in 1600 and colonized India over the next two centuries, subjecting the country to a brutal and exploitative rules, the scars of which still haunt India and shape its policies and political outlook.

“Modern day tech companies pose a similar risk,” Wadhwa told TechCrunch.

The Indian startups' move came a day after a group of apps including Epic Games, Deezer, Spotify and Tile, banded together to form the ‘Coalition for App Fairness’. This group, on its website, claims to fight against Apple’s control over its app store and in a minor way, Google as well. The website further claims that Apple makes $15 billion directly from its app tax. Their main demand is regulation of the app stores.