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‘Absolute hogwash’, Paytm on Google’s move to lower app store commission

Paytm slams Google's move to half the app store commission
Paytm slams Google's move to half the app store commission (Reuters)

Google said it would reduce the service fee for Google Play to 15% from 30% for the first $1 million revenue developers make through the platform. 

Paytm on Tuesday said that Google’s move to slash Play Store commission is an attempt to divert the attention from a larger issue. The company also reiterated that Google must allow other payment platforms.

"It is absolute hogwash on the big issue of how Google is taking the money from the Indian app industry altogether & this is an attempt to divert the attention. Digital-native companies have millions of dollars of revenues & they continue to pay 30 percent which is way exorbitant & are not allowed to use even our own payment platforms. It is shocking that Google has yet not solved the biggest issue that they control the destiny of this country's internet and technology industry & overall all industries which aim to use the internet & technology by allowing them to use their own payment platform & not force them to pay this tax,” a company spokesperson said.

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“Google's tax of 30 percent is effectively all the margin any technology company in India can ever make & means that we would raise equity and pay Google those dollars back in their home. It does not grow India's digital ecosystem. It does not grow India's technology industry. It is clearly yet not addressing the basic fundamental issue that exists that Google blocks open market, usage of payment platform, usage of distribution opportunities. This is nothing but a gesture made to divert attention which we must know is still unaddressed. Google must allow other payment platforms to be used. It must allow the distribution of apps openly and without any hindrances where the law of land allows that service to exist,” the spokesperson added.

Late Tuesday, Google announced that it would reduce the service fee for Google Play Store purchases by half for developers. The reduction in commission, however, is applicable for the first $1 million of revenue every developer earns each year. Google also said that the move would benefit 99% of developers globally that sell digital goods and services through the Play Store. The policy will come into effect on July 1, 2021.

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Google’s Play Store commission has drawn wide criticism. Already, popular international companies like Epic Games have taken the legal route to challenge app store policies. In India, many startups, including Paytm had raised concerns over the commission. Following the backlash, Google was forced to delay its Play Store rules to March 2022.

Separately, Paytm founder Vijay Shekhar Sharma told TechCrunch that Google’s latest move was nothing but a “PR stunt.”

“They are basically saying that as soon as you build a business larger than $1 million — which is a very low bar — you are going to pay a 30% fee, which after taxes, becomes 44%,” Sharma told the publication.

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