BharatMatrimony And Jeevansathi In Trouble: Google's App Removal Threat Shakes Up Startup Scene

Google is reportedly considering the removal of apps from ten prominent Indian companies, including well-known matrimony platforms, as a result of an ongoing dispute regarding service fee payments. According to sources, this potential action may heighten tensions with startup firms in the country.

What Is Google¡¯s Dispute With Startups?

The disagreement between Google and the Indian startups centers on the startups' reluctance to comply with Google's imposition of a service fee, which falls within the range of 11-26 percent for in-app payments in India. This dispute follows regulatory intervention by antitrust authorities, compelling Google to dismantle its earlier fee structure that imposed charges between 15-30 percent. The ongoing conflict underscores the challenges and tensions arising from the evolving dynamics between tech giants and startups in the Indian digital ecosystem.

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Google Obtained Approval To Impose Fee And Remove Those Who Failed To Comply

Google secured the authorization to either impose the service fee or potentially remove apps based on court rulings in January and February. The Supreme Court's decision not to provide relief to the startups was pivotal in granting Google this authority.

Alphabet Inc.'s subsidiary, Google, has sent notices of Play Store violations to Indian companies Matrimony.com and Info Edge. Matrimony.com, known for the BharatMatrimony app, and Info Edge, the operator of the Jeevansathi app, are presently examining and evaluating the received notices.

The Aftermath Of Google Sending Notices To These Companies

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Following the news, shares of Matrimony.com and Info Edge experienced declines of 2.7 percent and 1.5 percent, respectively . However, the stocks have rebounded. As of 1.35 pm, Matrimony.com was trading at Rs 545, and Info Edge was at Rs 5,291.15. Executives from both companies have informed Reuters that they are currently reviewing the notice and will deliberate on the subsequent course of action.

"The move means all the top matrimony services will be deleted," Murugavel Janakiraman, the founder of Matrimony.com, told Reuters.

"To our mind, we have been compliant since February 9 on Jeevensaathi. We have paid all invoices on time. We are in touch with Google and replying to the notice to say that we are compliant," said Sanjeev Bhikchandani, founder of InfoEdge.

In a blog post, Google emphasized that 10 Indian companies have opted not to remunerate for the substantial value they derive from Google Play. The post underscored Google's prerogative to levy fees, referencing the Supreme Court's verdict on February 9, which declined to intervene in this matter.

Indian Startups Critical of Google's Practices in App Ecosystem

The possible elimination of apps by Google has generated apprehensions within the Indian startup sector, known for its reservations about the company's policies. Google, holding a 94 percent market share in Android-based phones, argues that the fees it charges contribute to investments in the app store and Android OS. This ensures free distribution and covers expenses related to developer tools and analytic services.

Furthermore, Google stated that merely 3 percent of the 200,000 Indian developers on the Google Play platform are obligated to pay any service fee.

(With inputs from Reuters)