The Alliance of Digital India Foundation (ADIF), an industry body for more than 440 digital startups, on Friday hit out at Google, calling its Play Store commission cut a deflect and distract tactic — nothing but a reduced ‘Lagaan’.
The search engine giant Google has announced that it will cut the service fee for all subscriptions on Play Store to 15 per cent from 30 per cent for app developers starting January 1, 2022.
In a statement, Sijo Kuruvilla George, Executive Director, ADIF, said that 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. Price discovery should be left to the market forces,” he argued.
“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,” George added.
In a blog post late on Thursday, Google had said that to help support the specific needs of developers offering subscriptions, starting on January 1, 2022, “we’re decreasing the service fee for all subscriptions on Google Play from 30 per cent to 15 per cent starting from day one”.
In addition, Google announced that ebook and music streaming apps would be eligible for a service fee as low as 10 per cent.
Apple already offers reduced 15 per cent subscription fees, but that’s limited to developers who are part of its App Store Small Business Programme, which is available to those who earn up to but don’t exceed $1 million in a calendar year.
In India, start-ups have been claiming that Google abuses its monopoly, enforcing the billing system. Google had said this wasn’t new and its payments policy has always required this.
George further said that “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 added.
The announcement might come as a source of happiness for the subset of developers who are already on the Google billing system. The cut will improve their margins – should they fall into the “right” categories that the company deemed fit for Google’s relaxation in margins.
“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,” the ADIF stressed.
Moreover, apart from the additional work they 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 per cent/15 per cent) from the present rates (1 per cent-2 per cent) being levied by their existing payment providers, the industry body elaborated.
“The differential pricing system that Google is attempting to implement with this announcement is also unfair and arbitrary,” it said.
The ADIF urged Google to pay heed to the concerns of all developers, and not just the ones already on their billing system.