Dear Editor of Economic Times:
 
This has reference to the above mentioned article by Ateesh Tankha in today’s edition of Economic Times.
 
This article is full of errors of omission. While parrotting the large app developers’ narrative that Play Store fees is pure payment processing fees, the author has conveniently omitted many facts. Let me outline some of them. 
 
In the early days of Play Store, whenever we offered to do marketing for them, app developers fobbed us off by saying “We’re on Play Store, why do we need you?” So app developers get marketing from Play Store. Google has subsequently explained that it also provides other services like app discovery, app distribution, commerce platform, analytics, and training. It has also complied with the CCI directive to allow app developers to use external billing systems.
Google Play Store is not a monopoly. Android app developers are free to distribute their apps on their own – many actually do. If they still choose Play Store, then they must be willing to pay for whatever benefits they get only from Play Store.
In today’s India, there’s no price control for food, clothing, healthcare and other basic necessities. I see no place for regulator to cap the fees that Google can charge apps for using its Play Store.
If the regulator goes overzealous and forces Google to reduce the fees for paid apps, there’s nothing stopping Google from withdrawing free listing and introducing listing fees for all apps. If that happens, millions of small apps will shut down, leaving the market to just the large app developers. This will exactly contradict the charter of the regulator.
 
The population of India does provide a large market for multinationals, but it’s only by volume. By value, the Indian market contributes less than 1-2% to the global revenues of the Facebooks, Googles and Twitters. On the other hand, their investments in India easily amount to a majority of investments made in India. So I disagree with the author’s faux patriotic claim that “they need India more than India needs them”.
Thanks and Regards.

KETHARAMAN SWAMINATHAN

Pune, INDIA
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Ketharaman, pardon the delay in my response. I obviously missed this one. Let me try and respond to some of your objections.

1. I realise that this is not about pure processing fees. But it has been bundled together and represents a stark contrast to earlier charges. This is analogous to a bait-and-switch pricing tactic, unfair at best. It is absolutely acceptable to charge for advertising and maintenance, BUT not like this. Trying to consume such a large share of the profits is typical big-aggregator/ middleman behaviour.

2. While app developers are “free to distribute their apps on their own”, Google and Apple have created ecosystems that have been made successful in no small part by the developer community. Recognising this, as recently as April 24, a US Appeals Court upheld a judgement saying that Apple (the larger player in the US) could not prohibit app store developers from accessing payment options outside the store.

3. Lastly, have a care when accusing another of doling out “lame shill”. You have caught the bull by the tail. This article is about monopolistic behaviour, not Google’s much-vaunted support skills, though both may well co-exist. Your shrill arguments, however, sound like excessive protests.

I wonder why.

SKR Reply on LinkedIn:

(1) If you realize that 30% is for payment processing + listing + discovery + commerce + etc. after I’ve said it, why did your article perpetrate the lie that 30% is for payment processing alone? (2) You now make a big deal out of Apple not being allowed to prohibit app developers in USA from using external payment options. However, Google has already complied with CCI orders in India and already permits app developers in India to access external payment options. Why is there no mention of that in your article? (3) According to antitrust law, pricing power equals monopolistic behavior only if it results from regulatory action. That’s obviously not the case here. Google gets pricing power due to the compelling value it provides to app developers. Instead of making lame allegations of monopoly – ICYMI US court dismissed similar charges against Apple even though iOS does not allow sideloading of apps – app developers and their shills should try to figure out ways to provide similar value to their ecosystem and acquire pricing power.

As I said your article is full of omissions.

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SKR Comment on LinkedIn:

Here’s the as-published version of my response.

Reply from Author on LinkedIn:

Thanks for sharing. But this is typical of a monopolist. An app developer may not be interested in Google’s much-vaunted other services. So Google should unbundle payment fees from other fees.

But frankly, listing fees are even more problematic. Google cannot afford to only have large apps, because its traffic volume will crash.

Let’s not fool ourselves into believing that Google has the best interests of the small fry at heart. Just because a dragon slays manticores does not mean it will spare hares and deer in the long run.

Anyway, this discussion is now becoming absurd. Let posterity decide which of us is right. I want neither faux-patriots nor Google fanboys to win.

Economic sense should prevail.

Reply from SKR on LinkedIn:

As I’ve said earlier, Google already allows app developers to use third party payment modes in India. So, if app developers are not interested in “Google’s much vaunted other services”, they should use the alternative payment modes and exit Play Store – Google anyway always permitted apps to be sideloaded outside Play Store. Why are they not doing that?
It’s very lame to say that I insist on using your product but you must agree to all my terms. Far from Google behaving like a monopoly, it’s the large app developers who are behaving like a monopsony (that they are not).