Startups Consider Options Against Google On Excess Fees

Google, on 24 February, opened its alternative billing policy to all developers in India. This allows firms selling digital items and subscriptions through the Play Store to integrate billing methods other than Google’s built- in systems.

However, startups are crying foul, accusing the company of overcharging for these payments. Google charges 15% for using its own billing systems for any payments on apps earning less than $1 million in revenue annually. For others, the fee is 30%. Under the new policy, if users choose third-party billing, app developers still have to pay 11% and 26%, respectively.

Startup founders and industry stakeholders met on 27 February to discuss the way forward. Two founders, who were part of the discussions, said requesting anonymity that they are exploring all legal avenues, which include filing another complaint with the Competition Commission of India (CCI), going to courts, and approaching the government. The startups are accusing Google of discriminatory pricing, which they said affects market competition. One of the founders said they are planning to file a case of contempt with the CCI, claiming that Google’s new policy violates the CCI order.

To be sure, Google updated its Play Store policy in January to comply with another CCI order, which found the US tech firm in violation of India’s competition laws. The CCI slapped Google with a ₹936 crore fine last October, and ordered it to allow third-party billing on Play Store.

Though third-party billing is now available to all developers, since last month, startups feel that Google is still charging high commissions on third-party billing.

"Google Play's service fee has never been simply a fee for payment processing, and even when a user chooses an alternative billing system, developers receive significant value from Google Play and Android," a Google spokesperson said in a statement.