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Monday, September 20, 2021

App developers hope South Korea’s ‘anti-Google bill’ will set precedent for India

Indian developers see a lot of hope in the Korean law as it now gives India’s anti-trust regulator Competition Commission of India (CCI) an important precedent to follow.

Written by Shruti Dhapola | New Delhi |
Updated: September 9, 2021 11:28:39 am
Apple antitrust, Apple Antitrust rules, Google Antitrust law, Google South Korea bill, South Korea anti-google law, Apple Google monopoly, Apple monopoly, Google monopoly(AP Photo/Patrick Semansky, File)

As regulators scrutinise both Apple and Google for antitrust violations, some app developers and startups in India are growing more hopeful of similar moves in the country. The passing of an important South Korea law last week — dubbed as an anti-Google bill — in particular, is being seen as an important start.

“The South Korean legislation is a welcome development because it sets the precedent of law, which can be a guiding point for Indian regulators and for other countries and markets as well,” ​​Sijo Kuruvilla George, executive director at the Alliance of Digital India Foundation (ADIF) tells indianexpress.com. He says the conversation needs to move beyond advocacy — something which ADIF as a startup alliance has been doing for a year or so now — towards legislation.

Both Apple and Google charge a commission of 15-30 per cent from app developers for in-app purchases, subscriptions and other transactions. To ensure developers pay the commission, both ensure apps can only use their approved in-app payment methods. The South Korean law allows apps to use their own preferred app payment systems, thus bypassing both Apple and Google’s control.

Recently, Apple made a small concession to this 30 per cent commission where it said that reader apps such as streaming apps, magazine apps, newspaper apps, would be allowed to include links to their own websites, payment methods.

Indian developers see a lot of hope in the Korean law as it now gives India’s anti-trust regulator Competition Commission of India (CCI) an important precedent to follow. “CCI had convened a meeting to understand the issue better. It has also been doing independent studies to look at what is the right approach,” George explained.

While CCI cannot make laws, George says if it were to reprimand either Apple or Google and call out these practices as anti-competitive, then it could actually go a long way. “India is a more price-sensitive market and most Indian companies/app developers operate on thinner margins making it a lot more difficult to navigate the 30 per cent tax. The payment cycles further exacerbate the issue by adding to cash flow pressures,” he points out.

The Korean law also comes as CCI is investigating anti-trust claims against Apple over the 30 per cent in-app fees. The case was filed by Rajasthan-based NGO ‘Together we fight society’. In the US too, regulators are moving against Apple’s tight control over the App Store.

Sijo Kuruvilla George, executive director at the Alliance of Digital India Foundation (ADIF)

Meanwhile, Google had responded to the South Korea regulation saying its model and payment system help keep Android free. “We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks,” a spokesperson said.

But the issue for app developers in India is not just payments, which anyway impacts a very small percentage of apps on both platforms. The larger concern is one of distribution and being held captive to policies from both Google and Apple.

“Most of the Indian app developers have been at the receiving end of arbitrary and highhanded enforcement of policies and anti-competitive practices of Apple and Google app market monopolies. In the absence of enabling legislation, our app developers will always find it difficult to even pick up grievance redressal, forget challenging anti-competitive practices,” George explains.

This is a view that is shared by other platforms such as Indus OS, which is an alternative app store with over 400,000 developers. Indus OS also powers the Galaxy app store on Samsung phones in India.

“It is extremely clear that there is a need for another store in the market. Developers don’t have a choice… they need more options,” reasons Rakesh Deshmukh, CEO Co-founder, Indus App Bazaar. In his view, the payments and distribution story are interlinked and one cannot view these issues in isolation.

Apple antitrust, Apple Antitrust rules, Google Antitrust law, Google South Korea bill, South Korea anti-google law, Apple Google monopoly, Apple monopoly, Google monopoly Rakesh Deshmukh, co-founder of Indus OS.

While he agrees that CCI cannot pass a law given it is only a regulator, Deshmukh too believes if the anti-trust regulator were to call these practices out as monopolistic, it would be beneficial. “If CCI actually gives clear direction that there has to be a choice provided to the developers, whether it is for the alternative payment or for the distribution, that would be huge. That’s what we are hoping to see at some point,” he adds.

Deshmukh also points out that Google doesn’t allow another app store on its platform, which also ensures that Indus OS cannot be downloaded as an app from the store. In his view, users should have full freedom to download the app or app store of their preference. “It should be as simple as downloading an app on the PC is,” he says.

While both Apple and Google insist that the reason for this control is user safety and security, it should be noted that on laptops users can download the apps of their choice without worrying about whether it is in the app store or not. For example, the Chrome browser is not on the Mac App Store, but one can download and install it on their MacBook.

For upcoming platforms, navigating Google Play’s policies is not easy. In fact, when WinZo, the online arcade gaming platform, was delisted from Google Play in 2017, they had to pivot to a new model.

Apple antitrust, Apple Antitrust rules, Google Antitrust law, Google South Korea bill, South Korea anti-google law, Apple Google monopoly, Apple monopoly, Google monopoly Saumya Singh Rathore, co-founder of WinZo platforms.

“We pretty much initially felt that was the end for us (when banned from Google). But we opened a completely new distribution model through the micro-influencers,” Saumya Singh Rathore, co-founder at WinZo tells indianexpress.com. “We tied up with around two lakh plus micro-influencers, who are now generating around a billion views for us and even the bigger influencers have tied up with us. So yes, it might seem like Google is the only major platform for distribution, but we found an alternative.”

It should be noted that WinZo pitches itself as a platform where game developers can publish their games, though most of these have an element of skill it would technically also run foul of Google’s anti-gambling policy. In 2020, Google had removed Paytm from the Play Store over violations related to the anti-gambling policy.

But WinZo is not just about skill-based games. It is a platform where other developers publish their games. “We are not taking those heavy commissions. We don’t run subscription or in-app purchases. We focus on a micro transaction-led model,” Rathore explains adding that they have close to 50 million users.

In her view, while India might take time to regulate the monopoly of Google, it needs to be done to help “make a lot of businesses sustainable”.

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