The Alliance of Digital India Foundation (ADIF), an industry body for Indian digital startups, has today released a detailed landscape study of the app store policies of big tech companies and their adverse effects on Indian developers and users. The study also includes detailed information on regulatory actions and proposed legislation worldwide targeting the control of these big techs that control the mobile app ecosystem globally.
The report titled ‘Towards Regulating App Stores’ has been prepared by ADIF and The Quantum Hub, a leading public policy consulting firm.
The 30-page report draws attention to one of the many ways in which big tech companies are affecting India’s technology ecosystem – through the app stores. Both Apple and Google charge a hefty fee for the services that their app stores provide. Starting October 2022, Google – which has a mobile OS market share of over 95 per cent in India – will effectively bar developers from using any other method to accept payments from customers, thus forcing the payment of its commission.
Several Indian developers have objected to the quantum of the commissions, and the lack of choice in picking a payments system, terming the proposed policy unreasonable. The monopolistic policies of the app stores and their abuse of market power are forcing unfavourable terms on developers, who are left with no choice but to comply.
Taking cognizance of these issues, several regulators around the world have expressed concerns with the policies of the dominant app stores. Apple is currently under investigation from regulators in the US, Europe, Japan, Australia and India, while Google is also facing proceedings in the US, Europe and India, among other countries. In India, cases have been filed against Google and Apple with the Competition Commission of India (CCI), which is investigating them for abuse of market power.
The report released by ADIF broadly covers some of the contentious policies of the dominant app stores, the effects of app store policies on the mobile app market, international developments in app market regulation, and the limits of antitrust regulation. Considering the market power wielded by Apple and Google over mobile digital distribution platforms, there is an urgent need to ensure fair competition and improve choices for both developers and consumers.
In light of this urgency, ADIF welcomes the credible step taken by the Parliamentary Standing Committee on Finance to hold a meeting with big tech companies with the aim of deliberating issues related to their competitive practices. The disregard by big tech players and technology firms for India’s competition laws can have a detrimental impact on competition in the marketplace and stifle the growth of the country’s startup ecosystem.
Sijo Kuruvilla George, the Executive Director, ADIF said, “The dominant position enjoyed by the gatekeepers of the app ecosystem can severely hurt competition and innovation in the market, while also adversely affecting the ecosystem in many ways. It’s thus commendable that legislators are taking notice of such issues and actively taking steps to address the anti-competition practices of big players. The need of the hour is a balanced approach.”
