Upset Indian startups unite against Google policies: Reports

By Rahul Vaimal, Associate Editor
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Dozens of Indian technology startups are uniting to explore ways to challenge Google as they are angry at the US-based tech giant’s local domination of key apps, reports suggest. 

Even though Google, owned by Alphabet Inc, has worked closely with the booming start-up industry in India and is ramping up its investments, several tech companies have recently been upset by what they claim are unfair practices of Google.

According to sources, setting the stage for a possible showdown, entrepreneurs held two video conferences this week to strategize.

“It’s definitely going to be a bitter fight and Google will lose this battle. It’s just a matter of time,” said Dinesh Agarwal, CEO of e-commerce firm IndiaMART.

Executives are considering the creation of a new start-up association aimed primarily at lodging protests against Google with the Indian government and courts.

Almost 99 percent of India’s half a billion users’ smartphones operate on Google’s Android mobile operating system. Some Indian startups say Google exercises undue control over the kinds of apps and other services they can provide, a claim that the company has rejected.

The uproar started last month when Google removed from its Play Store the popular Paytm payment app, citing policy violations. This led to a sharp rebuke from the founder of the Indian company, Vijay Shekhar Sharma, whose app returned to the Google platform a few hours later, after some changes were made by Paytm. Paytm is backed by SoftBank Group.

One idea the group raised was to launch a local alternative to the app store of Google, but Sharma said this would not be effective immediately given the dominance of Google, a source said. Recently, the Indian government had said that it was willing to launch an alternative platform if there is sufficient demand.

The 30% cut

The US company annoyed some Indian startups this week by deciding to impose a 30 percent commission it charges on Android store purchases made within the apps.

The decision was slammed by two dozen executives of Indian companies. Two sources said they discussed filing antitrust lawsuits and approaching Google’s India head for discussions. Participants included Dream Sports sports technology company, funded by US hedge fund Tiger Global, ShareChat, the social media company and PhonePe, digital payments firm, the sources said.

Google defended the policy saying that 97 percent of apps worldwide comply with it.

Google is currently facing an antitrust lawsuit related to its payments app in India and a competition inquiry into complaints that it exploited the dominant position of Android. The organization claims it complies with all rules.

Google’s close links to Indian startups are strained by these disagreements. It has invested in several and helped with product growth for hundreds of Indian apps. In July this year, Google’s Indian-born CEO, Sundar Pichai, had pledged $10 billion new investments over the next five to seven years.

The conflict “is counterproductive to what Google has been doing – it’s an odd place for them to be,” said a senior tech executive familiar with Google’s thinking. “It’s a reputation issue. It’s in the interest of Google to resolve this issue.”

Google has refused to comment. It had previously said its policies are aimed at protecting Android users and that it is consistently introducing and enforcing them on all developers.