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Startup body accuses Google of deflecting with Play Store fee cut

Startup body accuses Google of deflecting with Play Store fee cut
Photo Credit: Reuters
22 Oct, 2021

Google’s decision to slash Play Store fees for developers selling subscription services hasn’t been received as well as the company may have hoped. Startup body the Alliance of Digital India Foundation (ADIF), accused the company of trying to “deflect and distract” from what developers have been asking for so far.

“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,” said Sijo Kuruvilla, Executive Director, ADIF at an event. “Price discovery should be left to the market forces. 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,” he added. 

The industry organization had filed a plea with the CCI earlier, asking the antitrust regulator to stop Google from bringing its Play Store fee policies into practice till the CCI’s probe into the company had finished. “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,” Kuruvilla added.

Startups had approached the CCI against Google’s Play Store fees last year, and the antitrust regulator has asked its Director General to conduct a probe into the company.

Also read: Google reduces Play Store fees to 15% for subscription services

Last night, Google announced that it will reduce the 30% commision it was charging from developers providing subscription-based for using its platform to 15%. The new fees will come into effect from January 1, 2022. 

Both Google and Apple require app developers to mandatorily use their built-in payment systems for selling any content and services through their platforms. A few developers including Epic Games that tried to bypass the payment system were banned from these stores. Antitrust regulators worldwide have been looking into these rules, and Apple had recently changed its policies too. 

ADIF acknowledged that the reduction in Play Store fees will bring relief to developers who were dependent on Google's billing system and will improve their margins if they fall in the categories that qualify for Google’s relaxation in margins. 

Google, which also charges 15% commission for apps that make less than $1 million per year, claimed that 99% of developers would qualify for a service fee of 15% or less because of this rule. The company had started this last year after backlash from developers and startups worldwide.