As Apple and Google push developers towards an ad-based business model, industry stakeholders on Thursday stressed on the need to correct the power imbalance between app store operators and developers in the Indian context, urging the government to formulate a law to address developers’ concerns.
A virtual panel discussion, organised by the Alliance of Digital India Foundation (ADIF) and the Coalition for App Fairness (CAF), deliberated on the limitations of the current legal and regulatory frameworks in dealing with such digital markets and touched upon the need for specific legislation such as the one enacted in South Korea, and currently under consideration in the US and the EU.
“In India, the dating app Truly Madly is priced 30 per cent higher on iOS than on Android because the 30 per cent commission hasn’t been enforced on the Google Play Store as yet, highlighting how the high commission is passed onto consumers,” said Sijo Kuruvilla George, Executive Director, ADIF.
Google and Apple, with a combined market share of 99 per cent, currently dominate mobile operating systems and act as gatekeepers to the app ecosystem.
However, a “lack of competition in the market as well as the app stores’ practice of bundling of services like app review, content moderation, and transaction processing, makes it difficult to determine the ‘fair’ charges for these services”, the experts lamented.
According to Mark Buse, SVP and Head of Government Relations at the Match Group,A unlike transactions made through credit/debit cards, Google and Apple hold on to the payments for upwards of 90 days, “limiting the availability of funds for smaller and newer developers”.
“This dampens innovation and depresses new apps from being built,” he noted.
The panel also touched upon policy recommendations that can be considered by the Indian regulatory agencies to help the startup ecosystem.
“By forcing app stores to unbundle all the services that they provide (app review, content moderation, transaction processing, etc.), it would be easier to determine fairer rates for individual services. This will also increase control for developers on the choice of service they wish to avail themselves,” the panel recommended.
Payment choices for users can also be enhanced by legislating the removal of anti-steering provisions in the app store policy.
“These regulations can be modeled around the recent South Korean regulations which sought to achieve the same goals,” the experts suggested.
The lack of oversight on the imposition of app store policies leaves too much power in the hands of Google and Apple.
“Hence, regulations that prohibit unfair delays in review and those that hold app stores liable for wrongful removal of apps are needed to ensure a fair and transparent review system,” the stakeholders said, adding that some form of governmental oversight is required to ensure that the app stores do not stifle the growth of developers.
The experts also highlighted the case of the Netherlands’ authority for Consumers and Markets (ACM) finding Apple’s app store policy as anti-competitive.
Despite weekly fines of $5.7 million, Apple has not made changes to its policies that the ACM deems necessary.
“While the ACM has fined Apple 25 million euros till now, Apple might view it as just a slap on the wrist and the cost of doing business. In the end, it will be the customers who pay for such non-compliance by Apple,” said Hannah Rickets, Deputy Director of CAF.