Several Indian startup founders came together to evaluate legal options as well as on approaching regulators such as the Reserve Bank of India and the Competition Commission of India against Google over its PlayStore policy, which is turning into a raging issue in the tech industry.

Google on Monday reiterated its Play Store billing policy which entails that a 30 percent fee will be levied on all in-app purchases of digital goods and that all payments for in-app purchases will have to be routed through Google’s Play Store billing platform.

Google’s Billing Policy Explained:

Tech giant to charge 30% fee from all in-app purchases starting next year

This has not gone down well with the Indian startup ecosystem, especially as they rely largely on the over 90 percent penetration of Android phones in the country.

The Internet and Mobile Association of India (IAMAI), an industry body for startups and Internet companies, both domestic and global, called for a founders’ meeting on Friday to discuss the issue and the impact of the policy on Indian players.

Founders of several leading startups such as PhonePe, RazorPay, Dream 11, Sharechat, as well as the Payments Council of India were part of the meeting, as per sources. None of these founders has confirmed to CNBC-TV18 on their presence at the meeting.

Google, which is also an IAMAI member, however, was not part of the meeting, sources suggested. Both Google and IAMAI did not respond to specific queries.

“We discussed all possible options, including taking up the matter with the RBI on Google’s restrictive clauses on payments and the CCI on the anti-competitive policies on the PlayStore,” an industry member who attended the meeting told CNBC-TV18, requesting anonymity.

“We will also be speaking to lawyers to evaluate all options, including taking this to the court,” the person said.

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It is not clear whether IAMAI will immediately take these steps or will hold further meetings, including with Google at the table. The IAMAI meeting follows another heated one among several founders earlier this week.

Leading internet company founders such as Vijay Shekhar of Paytm, Yashish Dahiya of Policy Bazaar, Murugavel Janakiraman of Matrimony.com, Farid Ahsan, cofounder of Sharechat and Vishwas Patel of CCAvenue were part of a Zoom meeting on Tuesday, in which they criticized Google’s PlayStore Billing policy and called for setting up of an industry body, CNBC TV-18 learned from sources.

The proposed association has tentatively been named as the Aatmanirbhar Digital India Foundation, sources said.

The issue is largely around the commission on every transaction that Google will take, which even leading internet players said will not be feasible.

Murugavel Janakiraman of Matrimony.com raised this issue on CNBC-TV18 earlier this week.

"We don't even make 20 percent EBITDA margins if we give 30 percent revenue to Google, how can we run the business?" he said.

Payment players, including the Payments Council of India, have raised concerns over Google's restrictive policy to route all payments through its own billing store.

Vishwas Patel, Founder CCAvenue and Chairman, Payments Council Of India said, “Just because Google owns the gate and the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations which are contrary to our country’s laws. Also, they cannot force Indian Apps developers/owners selling digital services to compulsorily use the Google Billing and payment system and charge 30 percent MDR."

"In Indian Courts, Google says it does not need RBI authorisation as it is not a payment system operator and here it is mandating that Indian Apps use only Google’s proprietary Billing and Payment systems. Google should not use dominant position rather allow a level playing field for everyone in the ecosystem," he added.

First Published:Oct 2, 2020 6:32 PM IST