The EU is finalizing the Digital Markets Act that could impose fines of up to 10% of companies’ global turnover if app developers are denied access to alternative payment mechanisms. In India, where Google has an overwhelming market share of the mobile operating system and therefore the application delivery platform, the company’s behavior has been investigated by the Chief Executive of the Competition Commission of India (CCI) and was found to be the leader in denying market access.
Rather than engage in protracted litigation around the world, Google and Apple have therefore offered concessions to app developers. These sops, critics say, are preserving most of the $133 billion they earned from their app stores last year. The easier terms on offer are aimed at the vast multitude of app developers who generate a small proportion of revenue, while the rest will continue to pay eye-watering commissions of up to 30%.
Google lost the first round of appeal in two out of three EU antitrust cases involving more than €8 billion in fines for anti-competitive behavior involving online shopping search, the Android operating system and its AdSense advertising service.
Concessions to app developers may not be enough in India, which has the world’s third-largest startup ecosystem. The Indian digital market has a relatively lower revenue realization across all services offered.
Faced with a monopolistic distribution channel, the road to profit becomes longer. For what it’s worth, Indian startups indirectly benefit from oversight in other jurisdictions. They would not be wrong to expect a more proactive attitude from their own regulator.