The App Fee Conundrum
Billing policies of Google’s Play Store have been a bone of contention with developers for long, but there doesn’t seem to be any solutions in sight yet
a long-standing conflict has pitted some of India’s most prominent start-ups against global tech giants. The bone of contention? The high share of revenue charged by Google Play Store and Apple App Store. Recently, apps of some wellknown Indian brands like Info Edge (including the apps Naukri and 99acres), BharatMatrimony, TrulyMadly
and Kuku FM were removed from the Google Play Store for not complying with the tech giant’s billing policies. It sparked outrage from the country’s developers with the Internet and Mobile Association of India (IAMAI) labelling this action as “unfair and disproportionate”.
Google later agreed to reinstate the delisted apps after Ashwini
Vaishnaw, Union Minister of Railways, Communications, Electronics, and IT, got the tech giant and Indian start-ups to the negotiating table. But the company made it clear that it “maintains its right to implement and enforce its business model,” citing various court orders that were made in its favour.
Developers’ discontent with Google’s billing policies have been simmering since 2020, when Google announced that it would start enforcing its billing policies— including levying a fee of 30% on financial transactions made on the Play Store—from the next year, till when developers had time to comply with the policies. Later, after protests from Indian developers, Google delayed enforcing its billing policies and brought the fee down to 12-26%.
“It is acceptable for a company like Google to charge app hosting fees for its platform. The company provides an extensive ecosystem that requires
research and development,” says Jiten Jain, cybersecurity expert and Director at network security firm Voyager InfoSec. “However, charging exorbitant fees in the range of 1226% per cent can be a threat to many small and medium sized companies.”
The policy of restricting downloads on the Apple App Store or the Google Play Store is often justified on the grounds of security; this is because apps on the Play Store are typically vetted to prevent malware and other security risks. But some experts have criticised this practice as monopolistic because it can limit the availability of apps, potentially stif ling competition. Google does allow users to side-load apps and lets users download alternative app stores, but none of them are able to attain the same level of integration with Android, the operating system.
What, then, is the solution? Sanjeev Bikhchandani, Founder & Executive Vice Chairman of Info Edge, in a post on X, suggested that India needs its own App Store/Play Store that is a part of Digital Public Infrastructure, akin to UPI and ONDC. “Even if the government introduces a new ecosystem to reduce the monopoly of tech giants like Google and Apple, it will need to charge certain fees to maintain the security and infrastructure of the ecosystem. Similarly, companies like Google need to charge a certain fee, but the government can play an important role in capping the charges,” says Jain.
According to Jain, both Google and Apple could consider reducing their app store fees. This would directly address the primary concern of many developers, but this could impact the revenue of the tech giants. Google could also democratise app stores by allowing alternative ones, giving developers more freedom, says Jain. He adds that it remains to be seen that if the government decides to create its own app store, whether Google would allow it. Apart from its own app store, government regulation could also play a role in resolving this issue, feel experts. By setting rules about what tech giants can and cannot do, governments could ensure a more level playing field. The flip side is that this could stifle innovation and competition.
Another issue experts have highlighted is that the dominance of just two smartphone ecosystems gives them exceptional leverage but it leaves small and medium businesses vulnerable to heavy charges. The latest flare-up has brought to the fore the power dynamics at play in the digital world. The Alliance of Digital India Foundation (ADIF), a policy think-tank representing home-grown start-ups, says that by delisting apps, Google is trying to intimidate and coerce the developers who have dared to challenge its policies. They call it a “clear case of abuse of dominance by the big tech”.
Globally, too, developers have complained about the high fees charged by app stores. In 2020, Epic Games, the developer of Fortnite, filed antitrust suits against both Google and Apple over their in-app purchasing fees. Epic had tried to implement a payment system within Fortnite in 2020 that would have bypassed Google and Apple. Both companies briefly banned Fortnite from their app stores in response. The jury found Google at fault for all 11 antitrust claims brought by Epic, but a judge ruled against Epic in the case against Apple. Even Elon Musk, after taking over X in 2022, had called out app stores for the high fees they charge for in-app purchases.
Thomas George, President of CyberMedia Research, says that addressing this issue will require a comprehensive approach that includes regulatory oversight to ensure fair practices, promoting competition by supporting alternative app stores, and providing developers with more control over payment options. “This complex issue demands collaboration among policymakers, industry stakeholders, and the developer community to create a more balanced and innovative digital marketplace,” he explains. There is a long way to go till a permanent solution to the issue can be arrived at.