Google-Paytm row brings app store monopoly debate to India

Bangalore/New Delhi: The altercation between technology giant Google and fintech major Paytm has brought the global debate around app store monopolies to India. Startup founders and venture capitalists (VCs) from the country’s startup ecosystem are speaking up against the power the maker of Android wields over apps on its platform.

According to one founder who has apps listed on both Google Play Store and Apple’s App Store, it is almost impossible for an Indian company to challenge app store policies in India legally since Google follows the American standards for legal disputes.

"Taking on a giant like Google in the Indian courts involves the hefty court and legal fees, and the battle will be incredibly long drawn...because these big Internet firms do not fully follow the rules and regulations in India and a developer might have to fight a concurrent case in the US court as well,” the founder said.

“Paytm might be able to comply with Google’s policies instantly after being delisted without notice, and bring it back-up online, because it has a large engineering and development team to immediately re-edit the app and comply within hours. But when it comes to smaller app developers or a founder who has less than 50k users, it is bound to lose users by the minute. It will surely hurt the business,” he added.

According to Ramesh Kailasam, chief executive officer of tech lobby group IndiaTech.org, abruptly delisting an app from the Play Store is equal to enforcing a ban of sorts, and both the app and its publisher takes a hit. “There is disruption and mistrust raised in the consumer's minds due to the abrupt delisting because his or her actual money is sitting in the wallet. Also, shutting down an app on a marketplace, whose mobile OS is used by more than 80% of the market, also means you are shutting down the distribution of the app publisher,” he said.

“It is also strange that Google bans online fantasy gaming apps on its app store, while its closest competitor Apple in fact allows it,” he added.

Some developers have also chosen to remove their apps from Google Play in order to continue their business.

According to Dibyojyoti Mainak, VP, Policy & Legal, Mobile Premier League (MPL), delisting from the Play Store has been “great for its business”.

“Google charges a hefty margin (for transactions and in-app payments). What we saved there was channeled to our developer partners and players. We grew from around 15 million, when we delisted, to 60 million users with almost a billion dollars in GMV,” he said.

According to lawyers, even if Paytm were to take legal recourse in this matter, it may still have a tough time.

“It’s very easy to show that Google is dominant. But under the Competition Act, PayTM will have to show that what Google is doing is unfair trade practice or it’s an abuse of dominance,” said Alok P. Kumar, co-founder, Vidhi Center for Legal Policy.

“You will have to show how Google is affecting competition in the market, and how it is affecting consumer welfare in the market,” he added.