Time To Break The Google Play Store Monopoly In India? It Happens This Month

For anyone using a smartphone in India, or even the world save for China, there are practically two options for an “app store” — an app that’s a home for apps on a mobile device — Google Play and Apple’s App Store.

Between the two, it isn't even a fair contest within India: Google's Android mobile operating system runs on more than 95 per cent of all smartphones in the country.

Still, the two app marketplaces are a go-to for downloading apps that help people stay connected, listen to music, watch videos, create documents, track news and information, play games, be more productive, live better — what can’t an app do? (Maybe increase your time offline, in the real world, but that’s a separate story.)

With the app-based operating system model prevailing on our smartphones, Google Play and App Store currently hold sway with more than 3 million and more than 2 million Android and iOS apps, respectively. This level of numerical superiority and dominance implies that users and app developers have nowhere else to turn to, even if they are at the receiving end of unfavourable pricing and policies.

A new homegrown app store entrant is, however, promising to ease the grip of the two existing powerhouses. The offering will cater to the Indian ecosystem while resolving the major concerns of app developers in recent years, who have grown a long-standing grouse with Google Play.

The new Android-based mobile app store is by the digital payments company PhonePe. Indus Appstore will be launched on 21 February, reportedly in New Delhi with a significant gathering of government officials and representatives from the startup and developer communities.

When PhonePe launched a developer platform for its app store in September 2023, seeking an initial burst of app uploads on their store, Akash Dongre, Indus Appstore co-founder, spoke about the need for a “new-age, localised Android app store” for India — a country that’s likely to have over one billion smartphone users by 2026 — and, in particular, an alternative to Google Play.

“Despite being such a large consumer market, app developers have always been forced to work with only one app store — Google Playstore — for distributing their apps,” Dongre said at the time, promising “a credible alternative… one that is more localised and offers better app discovery and consumer engagement.”

Dongre singled out Google Play probably because the Alphabet Inc company has been frequently alleged to have adopted practices that impede or block competition. One part of it pertains to monopolising the distribution of apps on Android smartphones.

As a result, it has found itself embroiled in antitrust lawsuits in the United States (US), Europe, and India over the years.

Google’s Antitrust Troubles

In December 2023, Google agreed to a $700 million settlement and other concessions against allegations that it had been suppressing competition to its Android app store.

Earlier, the company came under fire from a US federal court jury for the use of anti-competitive tactics in its Play app store for Android apps.

A large share of Google’s settlement with the US states is marked as compensation for consumers who have had to use a payment processing system that allegedly raised prices for digital transactions within apps downloaded from the Play store.

Similar to Apple's approach with its iPhone app store, Google charges commissions ranging from 15 per cent to 30 per cent on in-app purchases — commissions which generate billions of dollars in profit annually for Google. US state attorney general argued that these fees drove prices higher than they would have been in an open market for payment processing.

The settlement is expected to result in reduced fees for app makers who manage their own transactions, although customers may not see a direct reduction in fees with app developers likely to hang on to the discount. Google has said it will also enable developers to display different pricing options when users make a purchase.

Opinions vary on how significant these concessions, which anyway worryingly come with an expiration date, really are.

In India, Google has gotten into hot water for alleged abuse of its dominant position across various areas — smart televisions, digital payments, web search, news aggregation, and digital advertising.

It began with the country’s antitrust regulator launching an investigation into claims that Google had misused Android's dominant position in the smart television industry. The Competition Commission of India (CCI), which began probing these charges in 2020, found the tech-giant in breach of anti-competitive regulations.

The CCI is responsible for enforcing the Competition Act, 2002, which prohibits anti-competitive agreements and the abuse of a dominant position by enterprises.

The regulator had taken objection to Google making pre-installation of its proprietary apps (particularly its app store) conditional upon signing of the Android Compatibility Commitments for all Android devices manufactured, distributed, or marketed by device manufacturers.

As a result, Google had allegedly reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android and “thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the Act,” the CCI said.

Google had denied these allegations, claiming that their smart TV licensing practices complied with all applicable competition laws.

A 750-page CCI report, based on a probe initiated in 2019 and released in June 2021, said Google abused the dominant position of its Android operating system in India. In response, Google said it looked forward to working with the CCI to “demonstrate how Android has led to more competition and innovation, not less.”

The CCI, thereafter, opened a probe into Google's alleged abuse of dominance in news aggregation, after a complaint was filed by the Digital News Producers Association (DNPA), a body that promotes and protects the interests of digital news publishers.

One of the allegations levelled against Google was that, as the leading player in the market and apparently accounting for about half of all traffic to news websites, it controlled which news websites were discovered via search using its algorithms.

In October 2022, the CCI levied a fine of Rs 936 crore on Google for alleged abuse of dominance in connection with the app store. As per the CCI order, linking access to the Play app store with mandatory use of the Google Play billing system for paid apps and in-app purchases constituted imposing unfair conditions on app developers.

Thus far, Google has been fined a total of Rs 2,274 crore in India and compelled to make changes to its business practices and agreements with partners, though it has maintained that it will appeal the CCI’s rulings.

Though the fines imposed in India might appear high, they are far less than in places like the European Union (EU), where the tech-giant has been under a similar antitrust scanner for many years. Google was fined 2.42 billion euros and 4.12 billion euros in 2017 and 2018, respectively, after being found guilty in antitrust cases in the EU.

Indus Appstore As An Answer

In response to Google’s allegedly unfavourable pricing and practices, the Indus Appstore is promising Android app developers a fair and level-playing field to list, distribute, and promote their products in the Indian app ecosystem.

PhonePe has said it will not charge Android app developers a platform fee or commission for in-app payments on the Indus Appstore. Developers will also have the option to pick the payment gateway of their choice within their apps on the store.

PhonePe won’t charge for app listings on the Indus Appstore Developer Platform in the first year; subsequently, only a nominal annual fee will be charged.

Many of the app store’s developer tools and features are tailored to the Indian market. For instance, for the benefit of startups and new app launches, the Indus Appstore will have a dedicated section called “Launch Pad,” to help enhance the visibility and discoverability of new apps.

The homegrown app store will also provide a dedicated customer support team available round-the-clock in India, addressing the concerns of local developers for whom, the time zone difference with the US, has caused late replies and other hassles.

Moreover, the Indus Appstore will provide the option to list apps in 12 Indian languages besides English, and enable mobile-number-based login for the benefit of those who don't have an email account.

Thus, for those Indian businesses who have grown frustrated with Google Play over time, an alternative, India-centric app store option can’t come soon enough. The wait ends in February.