top of page

Google Delisting Apps: Key Considerations for App Developers



Recently, Google has delisted several Indian apps from the Google Play Store such as Matrimony.com, Naukri, 99 acres, and Shaadi.com among others citing non-compliance of such apps with Google Play Store’s new billing policy.

 

The main issue that multiple startups have is the high service fee being charged despite the use of alternative billing systems which is contended to be in violation of the Competition Act, 2022 (the “Act”).

 

These startups received interim protection from the Madras High Court and Google was directed to not remove their apps from the Play Store. However, in January 2024, a division bench of the Madras High Court dismissed the petitions and refused to grant any further interim protection observing that this matter falls under the jurisdiction of the Competition Commission of India (“CCI”) and the Reserve Bank of India (“RBI”).

 

The interim protection offered by the Madras High Court ended on February 12, 2024. Hence, certain startups appealed to the Supreme Court which accepted the appeals, issued a notice to Google and set the next date of hearing as March 19. However, the Court refused to provide any interim protection to the startups due to which Google began delisting apps were non-compliant with its billing policies.

 

In this article, we will delve into Google Play’s billing policies and how app developers can comply with them so as to avoid being delisted from the Google Play Store.

 

Google's Old Billing Policy and CCI's Order

 

Initially, Google mandated app developers who charge for app downloads or in-app purchases from Google Play to compulsorily use its billing system i.e., the Google Play Billing System (“GPBS”) to facilitate such purchases. No app developer was allowed to use any alternative or third-party billing system.

 

However, the CCI by way of order dated October 25, 2022 considered this practice of Google to be an abuse of dominant position and in violation of the Act. Accordingly, the CCI levied penalties to the tune of INR 930 Crores and stated that Google should not restrict app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps.

 

Post the order, Google revised its billing and payments policy to allow app developers charging users in India to utilize alternative billing systems.

 

Google's New Billing Policy


As per Google’s updated billing policy, app developers can use the GPBS or an alternative billing system and pay a service fee to Google for (a) charging for app downloads and (b) charging for in-app features or services. These in-app features and services include app functionality, digital services and digital products (“in-app purchases”). This means that most digital service apps which charge users to access content/features owe a service fee to Google. 

 

Notably, the GPBS must not be used by apps wherein:

1.     payment is primarily:

· for the purchase or rental of physical goods (such as groceries, clothing, electronics etc,);

· for the purchase of physical services (such as transportation services, cleaning services, gym memberships, food delivery); or

· a remittance in respect of a credit card bill or utility bill (such as cable and telecommunications services);

2.     payments include peer-to-peer payments, online auctions, and tax-exempt donations;

3.     payment is for content or services that facilitate online gambling;

4.   payment is in respect of any product category deemed unacceptable under Google’s Payments Center Content Policies.


Google does not charge any service fee on the above-mentioned apps which includes e-commerce apps, food delivery apps, D2C apps etc.

 

How Can APP Developers Comply with Google's Policy?


For now, based on Google’s Payment Policy, explained above, app developers would have the following 3 billing options to choose from:

 

Consumption – Only Model – No Service Fee


Under this option, any developer can allow a user of their app to access content that they paid for outside the app. Google does not charge any service fee for this model. The important thing to note is that the payment should not be collected from users via the app and such payment can be collected elsewhere such as from the developer’s website.

 

A key player which follows this is Netflix, wherein the app redirects app users to subscribe to its plans on the website. The content is paid for via the website but can be accessed on both the website and app.

 

GPBS – Service Fee

 

An app developer charging for app downloads/ in-app purchases can integrate the GPBS and enable users to make payment. Google charges a service fee for the use of the GPBS in accordance with the following calculation: 

 

Sr No.

Service Fee Type

Service Fee

1.      

Developers enrolled in the 15% service fee tier

15% for the first $1M (USD) revenue earned by the developer each year; or

30% for earnings over $1M (USD) revenue earned by the developer each year

2.      

Subscriptions

15% for automatically renewing subscription products purchased by subscribers, regardless of revenue earned by the developer each year

3.      

Other transactions

15% or lower for eligible developers who qualify under programs such as the Play Media Experience Program

 

Alternative Billing System – Service Fee

 

An app developer charging for app downloads/ in-app purchases can alternatively use any third party billing system to enable users to make payment. Interestingly, Google also charges a service fee despite the use of such alternative billing system. The service fee calculation is as per the above-mentioned table less 4%.

 

For instance, use of GPBS would attract a service fee of 15% for the first $1M (USD) of revenue for each year. On the other hand, use of any alternative billing system would attract a service fee of 11% for the first $1M (USD) of revenue for each year.

 

An important consideration for app developers to note is that the alternative billing system can only be used if payment is accepted from users in India. 

 

Way Forward


For now, to be on the safer side, app developers should necessarily comply with any of the three billing options to avoid delisting of their apps.

 

That being said, IT Minister Ashwini Vaishnaw on March 2, 2024 stated that “the removal of apps of Indian companies from the Play Store cannot be permitted and that he has called Google and the impacted companies for a meeting next week.”

Some of the apps that were delisted by Google, such as Naukri, 99 Acres, and Shaadi, are back on the Play Store. It is unclear if this is because of the IT Minister’s intervention or because these apps have moved to a consumption-based model. 

 

This is an ongoing matter with both the Supreme Court and the CCI yet to give orders on the new billing system of Google. Additionally, the meeting between Google, Indian startups and the IT Minister is likely to provide key developments. Stay tuned for more developments.

 

 

 

 

 

 

 

63 views0 comments

댓글


bottom of page