Google: Deferment Of 30% Fee Shows Google’s Guilt: Vijay Shekhar Sharma, CEO, Paytm

 

Paytm chief executive Vijay Shekhar Sharma said Google’s decision to defer the levy of a 30% commission from Indian businesses selling digital goods through Play Store apps was an “admission of guilt” by the US-based tech giant. Google last week said it would charge the commission on developers globally from September 2021.

Sharma alleged that Google’s “arbitrary” enforcement and relaxation of crucial policy measures that would impact the fate of the entire Indian app ecosystem, without any regulatory consultations, proved that it exercised undue control over the businesses here.

“The fact that they are now announcing this (deferment of 30% commission) shows that they know what they are guilty of,” the founder of the Noida-based fintech company told ET over a video call on Monday.

“They are talking about taking billions of dollars from tech startups of this country,” he said, terming the commission that Google proposes to charge as “Google Tax”. “It is a clear violation,” he said, adding: “How can someone other than the government announce a tax in this country and give businesses one year to comply?”

While its announcement triggered outrage among startups that depend on Play Store to distribute their products, Google said on Monday that it will defer the implementation of the contentious policy in India, as reported first by ET. Google vice president for product management Sameer Samat told ET that the company would push the enforcement of the global policy in India till April 2022.

In a blogpost on Monday, Google added that this decision was made after “setting up listening sessions with leading Indian startups to understand their concerns more deeply”.

Sharma’s outburst comes a day after Paytm officially announced the launch of a mini app store which was running on a trial mode since earlier this year. Paytm’s mini app store, though, doesn’t allow users to download apps as Google’s Play Store does. Instead, it allows users to directly make purchases from brands through Paytm’s in-app interface.

After Google’s announcement last week, more than 50 startup founders, including Sharma, Sameer Nigam of PhonePe and Yashish Dahiya of Policybazaar formed an informal grouping to raise the issue with the government, as reported by ET on Monday.

Sharma refused to acknowledge Google’s decision to defer the date of implementing the commission as any form of victory, saying that simply postponing the “Google Tax” would still impact the finances of Indian businesses as it would reflect in the profit and loss statements and funding plans of hundreds of small businesses.

“This is Google deciding what it can and cannot do. Having to move P&L by a year is not a victory. The company is still putting itself in everyone’s balance sheet,” he said.

Likening the ongoing tussle between Google and the country’s startup ecosystem to India’s independence struggle, Sharma said the “fight” against Google would be a long one.

“The number of the developers who are ready to fight are in hundreds,” Sharma said. “This is not hunger for one day or one night. We will take the independence of our technology ecosystem. There is no company east or west that can take command of our destiny as an independent tech ecosystem, whether you come from the US, China or from Japan or Europe.”

A complete withdrawal of the 30% commission model, unbundling of Play Store from the Android operating system and allowing third-party app stores to thrive on its OS, and subsuming its policy with Indian law “like Apple” are some of the steps Sharma said he expected from Google to show intent that its interests were with the growth of the Indian tech ecosystem.

He said government bodies and antitrust regulators must take a view of this soon.

Some of these points were raised by the startup founders during a meeting with Ministry of Electronics and Information and Technology (MeitY) secretary Ajay Prakash Sawhney on Saturday, he said.

Sharma said the next step would be the formalisation of the industry grouping to give more weight to the local startup community, as he had first indicated in an interview with ET last month. Sharma had at the time expressed concerns over alleged inaction by industry groupings including Nasscom and the Internet & Mobile Association of India, suggesting influence by foreign organisations.

Google, meanwhile in its blogpost on Monday, said its decision to levy the commission would affect only 3% of businesses in India, as the rest didn’t offer any premium services. Google’s Billing System makes use of multiple payment instruments including debit and credit cards and UPI of all major payment apps, and not just Google Pay, the company said.

 

Sandip Ginodia , CEO

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