'Deflect & distract tactic': Alliance of Digital India Foundation on Google's commission cut

The Alliance of Digital India Foundation (ADIF) stated on Friday that Google's decision to reduce commissions charged from app developers for in-app purchases is a "deflect and district tactic".

ADIF, which is an industry body for India's digital startups, also stated it will double down on its efforts to protect fair competition and developer choices in the app economy.

On Thursday, tech giant Google had announced to reduce service fee for all subscriptions on Google Play from 30 per cent to 15 per cent from January 1.

ADIF has explained that Google's announcement might benefit developers who are already on the Google billing system but it fails to address the issues and challenges of scores of developers who stand to be affected by Google's earlier announcement of forced adoption of its billing system by March 2022.

The industry body has claimed that apart from the additional work developers would have to do, both with integration and re-onboarding of customers, almost all of them would see their margins get thinner owing to migrating to a much higher commission rate (15-30 per cent) from the present rates (1-2 per cent) being levied by their existing payment providers.

ADIF conveyed the differential pricing system that Google is attempting to implement with its latest announcement is also unfair and arbitrary. "As per the announced policy, different categories of apps would attract different tariffs while being provided exactly the same level of service. Moreover, such pricing structures would further distort market forces to the detriment of all," it said.

"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," said Sijo Kuruvilla George, Executive Director, ADIF.

Kuruvilla said 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."

ADIF has urged Google to pay heed to the concerns of all developers, and not just the ones already on their billing system.

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Also Read: Google to reduce Play Store fee for subscription services to 15% from Jan 1