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Indian startups unite for 'independence' from Google

Paytm's alternative to Google Play could renew interest in web-based apps

Paytm, India's top mobile payment app, is launching an alternative to the Google Play app store in protest at the high fees charged by the U.S. search giant.   © Reuters

Ever since gaining independence from the British in 1947, Indians have been sensitive to even a hint of Western "domination" over them. Now Google, with its ubiquitous Android operating system, has unwittingly touched on the most sensitive of national nerves.

The uproar started when Google announced on Sept. 28 that it will start strictly enforcing a rule that any sales made in apps distributed through its Google Play store must use its proprietary payment system and be subject to a 30% commission fee.

Startups and app developers across India quickly blasted the move as "unilateral" and "arbitrary," with some even comparing it to the hated salt tax imposed by Britain on colonial era India.

The founder and chief executive of Paytm, India's top mobile payment app, is among the most vocal critics.

"This giant monopoly, namely Google, is no more an innovation ecosystem but rather a toll collector," Vijay Shekhar Sharma said in an online conference held on Oct. 8.

According to Sharma, more than 120 Indian online-business startups have agreed to form a new industry group to advocate policy and business initiatives to curb the U.S. search giant's influence over online business in India -- 97% of all smartphones in the world's second-most populous country run on the Android system.

Paytm, which boasts 150 million monthly active users, has also gone a step further and launched an alternative mobile-service distribution portal -- dubbed the "Mini App Store" -- inside its Paytm app on Oct. 5. In just three days, more than 5,000 Indian companies had expressed interest in being listed in the new portal, Paytm said.

GOQii, a health monitoring platform that offers cloud-based services for use with wearable devices, is one of those 5,000. Its founder and chief executive, Vishal Gondal also had harsh words for Google at the Oct. 8 online event, which also served as a developers' conference for the new Mini App portal.

Gondal compared the new rule enforcement and 30% commission with the salt tax imposed by Britain, which monopolized the distribution of the commodity in colonial India. He compared the Mini App store to the historic Salt March of 1930, a non-violent protest led by Mahatma Gandhi against the salt monopoly as a symbol of the injustice of colonial rule.

"This is not just about 30%. This is about this entire East India Company-like structure, which is trying to oppress us," Gondal said. "We need to take a step-by step-approach to fight this ... to have a free and fair digital space in this country," he said.

Google said it will enforce the payment requirements from Jan. 21 for new apps, and from April 1 for existing ones.

The rebellion against Google in India is part of a growing global movement of mobile developers seeking a "free and fair" marketplace. In late September, a dozen Western online game and service providers, including Epic Games of the U.S. and Spotify of Sweden, set up the Coalition for App Fairness to collectively negotiate with Apple over its 30% commission on revenue from in-app purchases.

Apple has maintained far more stringent rules on the distribution of mobile apps for its iOS-based iPhones than Google does on Android-based smartphones. Apple only allows apps distributed outside of its App Store to be used on its devices, and every in-app purchase of digital goods and services, such as music, videos and games, must go through Apple's payment system, which charges a 30% commission.

By contrast, anyone can distribute Android apps through any channel, although Google warns that downloading apps from outside of Google Play may cause security issues. There are numerous third-party Android app stores run by Android device vendors such as Microsoft, Amazon.com, Samsung Electronics of South Korea, and Huawei of China, as well as independent stores like APKPure.com of the U.S. Most developers, however, choose to use Google's app store as it is a far more effective channel for acquiring users.

Pressure from mobile app developers, as well as from lawmakers and government anti-trust bodies in the European Union and the U.S., is growing against the 30% commission commonly charged by the likes of Apple and Google. Whether this pressure translates to change, however, remains to be seen.

In the meantime, Paytm's push to create an alternative to Google Play could renew attention on a web-centric form of providing services and digital content to smartphone users.

The Mini App store is not exactly an "app store" because it offers "web apps" instead of "native mobile apps." A web app is basically a website that has been optimized for smartphones with various functions performed by modern browsers and advanced Java script and HTML programs. Paytm's new portal lists links to those websites, and automatically creates icons on a smartphone's home screen that function as launcher for those sites.

Back in the early 2000s, some online service providers, including the U.K.'s Financial Times, now owned by Nikkei, made similar efforts to promote web apps to gain freedom and independence from Apple's tight control over iPhone apps. A major motivation was engineering costs, as multiple versions of an app were needed to function with iPhones, iPads and Android phones and tablets.

After several years, those efforts subsided, giving ways to native apps, which have maintained their edge in functionality, response speeds and off-line capabilities. The renewed demand today for alternative channels to portals run by Apple and Google may reignite development efforts to make web apps more functional and commercially feasible. And a success in those efforts could be a bigger threat to those two giant platformers' business models than the recent protests.

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