Google vs Indian Startups: A Battle for the App Economy

Google is one of the most powerful and influential tech companies in the world, with a dominant presence in the online search, advertising, cloud computing, and mobile app markets. However, in recent years, Google has faced increasing challenges and criticisms from Indian startups, who accuse the company of abusing its market position, imposing unfair policies, and stifling innovation and competition.

The main bone of contention between Google and Indian startups is the Google Play Store, the official app store for Android devices, which accounts for more than 90% of the smartphone market share in India. Google requires app developers who use the Play Store to follow its policies and guidelines, which include using Google’s own billing system for in-app purchases and subscriptions, and paying a commission of 15% to 30% to Google for every transaction.

Many Indian startups, especially those in the digital services, gaming, education, and dating sectors, have protested against Google’s billing policy, arguing that it is too high, arbitrary, and anti-competitive. They claim that Google is exploiting its near-monopoly in the app distribution market to force app developers to pay exorbitant fees for its services, while offering little value or support in return. They also point out that Google’s billing policy contradicts the Indian government’s initiatives to promote digital payments through low-cost and interoperable platforms such as UPI and RuPay.

Some Indian startups have also alleged that Google has been selectively enforcing its policies and removing apps that violate them, without giving sufficient notice or explanation. For instance, in March 2024, Google delisted several popular Indian apps, such as Shaadi.com, BharatMatrimony.com, and Jeevansathi.com, from the Play Store, citing non-compliance with its billing policy. The apps were later restored, but without their in-app payment options. The app developers accused Google of being biased, arbitrary, and high-handed, and said that the removal of their apps caused them significant losses and damages.

In response to Google’s actions, many Indian startups have decided to take legal and regulatory action against the company, and have appealed to the Indian government and the Competition Commission of India (CCI) to intervene and protect their interests. They have also formed an alliance, called the Alliance of Digital India Foundation (ADIF), to collectively voice their concerns and demands, and to explore alternative app distribution platforms and payment systems. Some of the prominent members of the ADIF include Paytm, PhonePe, Zomato, Swiggy, Ola, MakeMyTrip, and Byju’s.

The conflict between Google and Indian startups is not only a commercial dispute, but also a cultural and ideological clash. Google represents the global and western model of tech innovation and dominance, while Indian startups represent the local and emerging model of tech entrepreneurship and empowerment. Google claims to be a champion of openness, innovation, and choice, while Indian startups claim to be a champion of sovereignty, diversity, and inclusion. Both sides have their own merits and flaws, and both sides have a lot at stake in this battle for the app economy.

The outcome of this battle will have significant implications for the future of the Indian digital ecosystem, and for the relationship between India and the global tech giants. It will also set a precedent for other countries and regions that face similar issues and challenges with Google and other tech companies. The question is, can Google and Indian startups find a way to co-exist and cooperate, or will they continue to compete and confront each other? The answer may depend on how they balance their interests and values, and how they respond to the changing needs and expectations of the Indian consumers and regulators.