Witnessing the Apple-Fortnite tussle firsthand in the US, Google would surely have anticipated retaliation when it removed Paytm from the Android Play Store for 8 long hours.
Paytm is the crown jewel of Indian startup ecosystem. On September 18, Google removed the app, which boasts 130 million users, reportedly due to alleged repeat violations of Play Store guidelines. However, Paytm claims that the move is the latest attempt by Google to foil the payment app’s ability to entice new users. Paytm is also the biggest competitor for the Android maker’s in-house payments app Google Pay in India.
“This is b******* of a different degree… Google is not allowing us to acquire new customers right now. That’s all what this is,”Paytm founder and CEO Vijay Shekhar Sharma on Google’s move to ban India’s leading payments app
Last Friday, when Google removed Paytm’s apps from the Play Store, the reason it communicated to the company was non-compliance of “gambling policy” by offering “loyalty points”. Paytm said that the ban resulted because of a new cricket-based version of its scratch cards for users to initiate transactions. Paytm argued that Google had a similar ongoing campaign in the cricket-crazy nation where the world’s most valuable cricket event the IPL (Indian Premier League) is currently underway. Google responded by saying that cashback and voucher offerings alone don’t constitute violations of its gambling policies. It also mentioned that it enforced Play Store policies equally and consistently on all developers.
A similar ongoing fiasco in the US is seeing Epic Games, the maker of the world’s top-selling mobile game Fortnite, embroiled in a bitter tussle with iOS maker Apple. Fortnite found itself removed from iPhone app store after it introduced a new direct payment method for its players which bypassed the app store and thereby Apple’s cut in any purchase.
Rebels Fortnite and Paytm force Spotlight on how Apple and Google moderate the App Market
The Apple Fortnite Row in The US
It all started when Epic Games decided to move past Apple and Google guidelines for transactions on third-party apps downloaded from their app stores. Much to Apple and Google’s dismay, it brought about new direct payment system which did not involve Apple and Google payment systems, depriving the iOS and Android makers their traditional 30% commissions that they charge developers for in-app purchases.
Apple pulled down Fortnite from the App Store shortly. Epic, which had anticipated the ban, sued Apple minutes after the ban, triggering the boldest rebellion from the developer community against the perceived monopolistic actions of app marketplaces. Apple, refusing to relent, revoked Epic Games’ other technology offerings used by developers on App Store. This included Epic’s popular Unreal Engine which is used by many game developers as well as films and TV shows, most notably Disney+’s The Mandalorian. A recent ruling from a district court called Apple’s retaliation to Epic’s lawsuit too severe, ordering the iOS maker to reinstate Unreal Engine and other tools. However, the court denied Epic’s motion asking to restore Fortnite on the App Store. Both Apple and Epic Games continue to engage in a war of words.
Watch: Epic Games explains Fortnite’s fight against Apple
Google’s Position in the World’s Second Largest Internet Market
Paytm has been vocal about its grievances with Google’s Play Store policies in India. The Indian unicorn alleges that Google, whose payments app G Pay has emerged as the market leader for UPI payments, keeps restricting its ability to acquire new users through marketing campaigns.
Sharma also claimed that several Indian app founders had resigned to their fate and accepted Google as the all-arching final authority instead of the Indian regulatory authorities. With 99% of the local smartphone market operating on Android, google has unprecedented sway on regulating the content and apps available in India.
As per Paytm, which has risen from a payments app to a licensed digital bank, claims that the 8 hour ban gravely harmed its business, creating panic among users. Several users reportedly withdrew their Paytm Payments Bank fixed deposits. Similar stories emerged about vendors shifting their customers to a different option to Paytm in the aftermath of the news of the ban.
Google is already engulfed in another market abuse controversy in India, fighting an antitrust complaint alleging that it leveraged its Android dominance in India to gain unfair advantage in promoting G Pay.
Both Google and Apple also face the prospects of an antitrust regulatory probe and subsequent action in the US, having been warned by the Congress. The outcome of both these sagas is expected to have an overlapping effect on the future triangular relationship between smartphone OS makers, app developers and governments.