Last week, when Epic Games, Facebook, and Microsoft continued to raise concerns about Apple's “monopoly” influence on what a billion people can download onto their iPhones, a similar story unfolded in India, the world's second largest internet market, between a giant developer and the operator of the only other major mobile app store.
Google took Paytm, the app from India's most valuable startup, from the Play Store on Friday. The app returned to the store eight hours later, but the controversy and edge Google has created in the country will continue for years.
theinformationsuperhighway reported on Friday that Google pulled Paytm App from the App Store after a repeated pattern of violations of the Google Play Store guidelines by the Indian company.
Paytm, which is embroiled in a battle against Google to win the Indian payments market, has been frustrated for several quarters with Google's policies that are giving Google an unfair advantage over how the Android maker is marketing its new products limited users, sources familiar with the matter, theinformationsuperhighway said.
The explanation Google Paytm gave for pulling the Indian company's app off the App Store this week is the company's latest attempt to thwart the Noida-headquartered company's ability to attract new users.
In a blog post that Paytm published on Sunday evening (India local time), the Indian company said Google had problems with the company because it offered customers cashbacks and scratch cards for initiating transactions through UPI, a government-backed payment infrastructure in India , have provided popular way for people to exchange money digitally in the country.
Paytm announced that this new version of scratch cards linked to cricket was launched on September 11th. Users have collected these cricket stickers to send money to others or to conduct transactions like topping up funds on their phone or paying for broadband or electricity bill.
In a statement on Sunday evening, a Google spokesman said: "Just offering cashbacks and vouchers is not a violation of our Google Play gambling guidelines." Play Store "Guidelines are consistently applied and enforced by all developers."
But it is probably anything but consistent.
On September 18, Google Paytm announced that the app had been discontinued for non-compliance with the Play Store's "gambling policy" by offering games with "loyalty points". According to Paytm, prior to its announcement on Friday, Google had not raised any concerns about Paytm's new marketing campaign, which revealed that the Paytm app had been temporarily removed from the Play Store.
According to Paytm, Google itself is running a similar campaign related to cricket in India. (Why cricket? Cricket is very popular in India and one of the largest cricket tournaments in the world, the Indian Premier League, started its final season on Saturday.)
The Google Play Store in India has apps that promote gambling such as: B. Sports betting has been banned for a long time, and Google has previously raised concerns about Paytm's marquee app for Paytm First Games, a fantasy sports app from Paytm.
Paytm executives argued that PhonePe, A Walmart-owned payment app in India also promoted Dream11, the country's most popular fantasy sports app, and got away with it without any action.
Google also allows fantasy sports app operators – including Paytm – to advertise searching in India.
Where is Google hypocritical? Fantasy games are not allowed in the Play Store. However, you can advertise on Google search. Cc @vijayshekhar
At the top of the list is an app they banned today. pic.twitter.com/4USUD92kSc
– Nikhil Pahwa (@nixxin) September 18, 2020
"This is bullshit on a different scale," said Paytm boss Vijay Shekhar Sharma in a television interview on Friday about Google's objection to Paytm offering cashback. The Paytm app was only removed because Paytm was offering cricket cashback, he claimed. “Google does not currently allow us to acquire new customers. That's all that is, ”he added.
Google's payment app, Google Pay, competes with Paytm in India. In fact, Google Pay is the largest payment app for peer-to-peer transactions between users in India and holds the largest market share with UPI.
Without identifying names, Sharma, the figurehead of the Indian startup ecosystem, claimed that many founders in India have just accepted that Google has the final say on every matter in India – and not the country's regulators.
For Google, which reaches more users than any other company in India and whose Android operating system dominates 99% of the local smartphone market, this type of accusation is exactly what it needs to avoid in the country. The Silicon Valley search and advertising giant has launched a magic offensive in India, including a recent commitment to invest $ 10 billion – more than any other American or Chinese tech company.
The timing for Google's parent company Alphabet couldn't be worse. Google is currently the subject of an antitrust complaint in India on allegations of abusing its market position to unfairly promote its mobile payments app in the country. and in the US, Congress intimidated that it could take antitrust action against Alphabet and Apple over App Store concerns.
In India, Google's moves could have a devastating impact on businesses and everyday consumers.
Paytm is not just a payment app. It is also a fully licensed digital bank. And only an eight-hour absence from the Play Store caused panic among some of its users. A source familiar with the matter told theinformationsuperhighway that several people at Paytm withdrew their fixed deposit at Paytm Payments Bank on Friday.
Anecdotally, theinformationsuperhighway heard of cases where vendors who previously preferred Paytm for accepting money digitally asked their customers to use a different payment method after hearing that Paytm was "banned" in India.
According to Sharma, Google's monopoly on the Indian app ecosystem is of a magnitude unparalleled anywhere else in the world.
"If paying someone and getting cashback is a gamble, the same rule should apply to everyone," Sharma said. "It is a shame that we are on the cusp of an internet revolution in India and that we are being sanctioned by companies that are not governed by that country's law."
If that sentiment gains momentum in India, it could challenge Google's future in the world's second largest internet market.
Meanwhile, the US is forcing a Chinese company to sell shares in local firms in order to continue doing business in the country. In a recent episode of the Dithering podcast, Ben Thompson warned that the Trump administration's move – which some have argued is a long time due against Chinese companies (as China has long prevented US firms from being on the largest internet market in the world) – you may encourage other open markets to do what they do to TikTok to American companies.
Several US tech executives share these concerns.
The problem with this TikTok deal is that the US is the world's largest tech player. You can do this step once or twice, but we have a lot more to lose in the long run if we set a precedent like this.
– Aaron Levie (@levie) September 20, 2020
"I've already said that, but a US TikTok ban would be pretty bad for Instagram, Facebook and the Internet in a broader sense," tweeted Instagram CEO Adam Mosseri earlier this week. "If you're skeptical, keep in mind that most of Instagram's users are outside of the US, as is most of our potential growth. The long-term costs of sentiment countries that make aggressive demands and forbid us for the next decade outweigh us today the slowdown of a competitor. "
India, which Google, Facebook, and many other user tech giants consider their largest market, has made several proposals over the past three years – including mandates that overseas firms store payment information from local users in India and help businesses identify local enforcement agencies the originators of questionable messages circulated on their platforms – widely viewed as protectionist moves.
And India isn't even that open anymore. New Delhi has banned more than 200 Chinese apps in the past few months, including TikTok, UC Browser and PUBG Mobile. India has not made these cybersecurity concerns public and has recognized in its orders that users have raised concerns.
Enough noise against a foreign company might just be enough to face an avalanche of serious problems in India.