The Madras High Court has passed an interim injunction against Google over a plea filed by Matrimony.com, an online matchmaking platform. The injunction issued on April 25 bars Google from delisting Matrimony.com apps from the Google Play Store.
Matrimony.com claims that Google tried to make Google Play Billing System as mandatory, gave the sole option for payments and imposed a fee of 15% – 30% depending upon the annual revenue –something which was quashed by the Indian competition watchdog.
Google later rolled out an alternative billing system but with a service fee framework, which includes 15% for the first $1 million revenue earned by the developer each year, and 15% for automatically renewing subscription products purchased by subscribers, regardless of revenue earned by the developer each year, among others. For India, however, Google had lowered the Google Play service fee by 4% for those choosing to pay through the alternative billing payment.
Matrimony held that the present payment policy of Google, which is 11% – 26% fee on the revenue, will adversely impact the app developers and that the payment policy was in violation of the applicable law.
“Google is forcing app developers to agree to its payment policy of charging a service fee at the rate of 11% and 26% even with respect to the payments made by customers through its new users’ choice /alternate billing system without providing any services at all,” Matrimony CEO Murugavel Janakiraman said in a statement.
He further alleged that Google was trying to circumvent the CCI’s order that compelled Google to allow developers to deploy third party billing or payment processing services, either for in-app purchases or for purchasing an app.
Entrackr has reached out to Google for a comment on the HC order.
It’s worth noting that even in the European Economic Area and South Korea, two jurisdictions where Google has been compelled to allow alternate billing mechanisms, Google requires app developers to pay a reduced commission on in-app purchases.
Matrimony, however, is not alone in raising concerns about Google’s commission from app developers.
‘Death knell for Indian startups’
The Alliance of Digital India Foundation (ADIF), an industry body for Indian startups, described the 11%-26% service fee structure as a “death knell for the Indian startup ecosystem”.
“This would take away a huge chunk of the revenue made by Indian app developers and startups and would render business models of many young startups unviable, especially the one relying on in-app purchases, paid apps or subscriptions,” the group said in a blog post.
The blog also cited the example of Twitter’s Blue subscription price. It is available for Rs 650 per month if purchased through the web, but via Google’s Play Store the same costs Rs 900.
In the past the likes of Vijay Shekhar Sharma have too criticized Google’s commission from the app developers. Recently, Shaadi.com founder and Shark Tank-famed Anupam Mittal took to Twitter to slam Google.
“Received a call from @Google today mandating their payments for Indian developers in continued violation & disregard of @CCI_India orders & Indian laws. Neo-colonialism at its worst! Hope the media, courts & @PMOIndia are taking note … the Digital East India Co is here,” he had tweeted.