“…their monopolistic behaviour needs to be brought in check… If they are not stopped soon, our whole digital economy will face a huge setback….”
These are the words of prominent Indian startup founders against tech giant Google’s User Choice Billing (UCB).
As many as 30 Indian startups have reached out to Google, urging the tech giant not to delist their apps from the Play Store or take any precipitative steps against app developers until the special leave petition (SLP) hearing on March 19. This move is expected to be followed by more startups, signalling a growing concern within the Indian digital ecosystem.
Supreme Court's Recent Decision Ignites Startup Pleas
This collective plea comes on the heels of the Supreme Court's recent decision, where it declined to restrain Google from delisting apps on the Play Store. However, the court has agreed to hear pleas from startups challenging Google's billing policy. The startups argue that the tech giant's actions are indicative of anti-competitive behavior and non-compliance with the Competition Commission of India's (CCI) previous rulings.
Startups Challenge CCI's Efficacy in Google Billing Dispute
Startups have filed a plea before the Supreme Court, challenging a Madras High Court ruling redirecting their case against Google's UCB to the Competition Commission of India (CCI). The startups accuse CCI of "non-adjudication" in handling their complaints against UCB and Google's alleged non-compliance with previous rulings. The startups claim that CCI has not adjudicated on their complaints for over 15 months. With the Madras High Court rejecting their plea, startups feel "remediless." The petition is scheduled for admission before the Supreme Court, where startups question CCI's delayed intervention, hinting at the regulator's negligence in fulfilling its statutory mandate.
Ministry of Corporate Affairs Initiates CCI Performance Review
As tensions escalate, the Ministry of Corporate Affairs (MCA) has called for a performance review of the CCI. Concerns about the regulator's inaction in addressing complaints against tech giants, especially Google, have prompted this move. Finance and Corporate Affairs Minister Nirmala Sitharaman is expected to convene a meeting within this month to scrutinize the regulator's functioning.
The Alliance of Digital India Foundation (ADIF), a leading policy think-tank for startups in India, has hailed MCA's decision to review CCI's performance. ADIF sees this move as timely, given the increasing frustration among digital startups and app developers regarding the alleged anti-competitive conduct by tech giants.
ADIF issued a statement saying, "Today, we stand at a crossroads where the principles of fairness, innovation, and entrepreneurship converge. We support the MCA’s bold step in reviewing the CCI, recognizing the urgent need to address the power dynamics that threaten the very essence of fair competition."
Startup Voices Grow Louder
The heart of the matter lies in the startups' allegations of anti-competitive behaviour and non-compliance with CCI's previous rulings against Google. Startups have decried the lack of decisive action by the regulator, labelling it as "Non-Adjudication." Several cases against major tech giants, including Google, Meta, and Apple, have been languishing without resolution.
CEOs from prominent startups have voiced their concerns about the perceived monopolistic behavior of Google.
Anupam Mittal, CEO of Shaadi.com, said, “While the Finance Minister’s intervention towards getting CCI to enforce the orders it had passed is welcome, we do need to act with urgency. Big tech, particularly Google and Apple are acting with complete impunity and have little disregard for the laws of our country. China understood this and blocked them and in the process created multiple $100 billion companies. While we don’t advocate blocking these companies, their monopolistic behavior needs to be brought in check with penal provisions that ensure they do not even consider such abusive moves. These companies are the modern version of the digital East India Company and will corner our entire economy over time as gatekeepers to the Internet. In many countries, they are already more powerful than the government and we cannot allow that in India.”
Snehil Khanor, Co-Founder & CEO of TrulyMadly, said, “Despite clear order from CCI to not restrict or impose any restriction on app developers for using third-party billing, google has been continuously abusing its dominant position and threatening us to use Google billing system or face delisting. Internet was supposed to be 'open' but has sadly been invaded by a bunch of Digital Zamindars who are imposing heavy and unnecessary taxes on digital startups. If they are not stopped soon our whole digital economy will face a huge setback. While we make IN India, we will end up making FOR American Big Tech. I appeal to the government to look into it urgently and save our Digital India dream and economy from becoming a slave to American Big Tech.”
Google is delving deep into various facets of our business, extending its influence from billing to data control. Often likened to the 'East India Company' of the internet, Google now possesses the authority to designate auditors for our operations. In the era where data is considered the new oil, there are concerns that Google aims to extract and relocate a significant portion of this valuable resource outside the borders of India, said Vinay Singhal: Co-founder and CEO, STAGE.
Resonating a similar sentiment, Murugavel Janakiraman, CEO of BharatMatrimony, commented, “It's highly detrimental to the Indian startup ecosystem and the Indian governent also will end up losing a lot of tax revenue so it must be urgently looked into by the government and put to an end.”
Tech Giants and the Future of Fair Competition
The ongoing legal battle between digital startups and big tech is seen as a critical juncture for the Indian digital ecosystem. ADIF stands firm in supporting a future where fair competition prevails, innovation thrives, and entrepreneurship flourishes.
The outcome of the legal proceedings and the MCA's review of CCI's performance will undoubtedly shape the future of the Indian digital landscape. The startups demand a level playing field, emphasizing fairness, justice, and the spirit of entrepreneurship as essential principles for a thriving digital economy.
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