Startups

Only 0.08% Of Indian Developers On App Store Pay 30% Commission: Apple To Parl Panel


The information was published by the Parliamentary Standing Committee on Finance, which had summoned Apple and Google India executives earlier this month

While there are 21,000 Indian app developers live on Apple App Store, the number stands at 30,947 for Google Play Store

Both Google and Apple argue that not all app developers are liable to pay a commission; only apps selling digital goods and services pay a commission

According to iPhone maker Apple, only about 0.08% of Indian apps or developers live on its App Store pay a 30% commission. This translates to 17 paying app developers from the 21,000 live on the Apple App Store.

The information was published in a report by the Parliamentary Standing Committee on Finance, which had summoned Apple and Google India executives earlier this month.

The report, titled ‘Anti-Competitive Practices By Big Tech Companies’, mentioned that a vast majority or about 87% of Indian app developers on Apple App Store do not pay any commission.

At the same time, tech major Google told the standing committee that only about 3% of the developers on the Google Play Store pay a commission. The rest are free to use all the developer tools and services.

While there are 21,000 Indian app developers live on Apple App Store, the number stands at 30,947 for Google Play Store. For every two iOS app developers in India, there are three Android developers. It is also likely that a significant cross-section of app developers live on both app stores.

Both Apple and Google have been accused of indulging in anti-competitive practices in India, particularly with their app store policies.

While Apple has so far gotten away by claiming its operating system, iOS, is closed source, Google’s open source operating system Android saw it come in the crosshairs of the Competition Commission of India (CCI).

The CCI charged Google for indulging in anti-competitive practices and fined INR 936 Cr for not allowing app developers to access any other billing service than the in-built one in the Play Store.

Who’s Paying To Google & Apple?

Google told the standing committee members that the app developers that are liable to pay the commission are the ones who have paid apps or have in-app purchases within their apps. Similarly, Apple argued that only the apps selling digital goods and services are charged a commission.

As such, apps such as Amazon, Flipkart, Zomato and Swiggy do not qualify to pay the 30% commission. Only apps like OTT platforms such as Netflix and Amazon Prime Video, gaming apps such as Dream11 and music streaming apps such as Spotify are required to pay commission.

Even so, the 30% commission applies to only those apps that are making more than $1 Mn as ‘post-commission earnings’. Therefore, the app must earn at least $1.43 Mn in revenue for Google and Apple to charge the said commission. 

However, both companies have tried to rationalise the commission fees. If a developer’s earnings fall below this threshold in the next calendar year, they only have to pay a 15% commission. Apple’s small business programme also allows startups and other SMEs to pay only 15% commission. Last July, Apple started charging developers who reached their first million in earnings with only a 15% commission.

Google also changed its model to reduce the commission on subscriptions to 15% in October 2021 and then to 10% under the Play Media Experience Programme. The tech major also launched the pilot of user choice billing in India to allow app developers to use other payment providers to provide in-app billing services.

Why Pay The Commission?

The depositions before the standing committee took place at a time when there are growing concerns over Apple’s and Google’s app store policies. 

Only a tiny sliver of the total app developers live on the two app stores pay the companies the commission. However, there are debates about whether app developers should pay a commission to either Apple or Google.

The ongoing debate has prompted countries to introduce legislation to ease sideloading of apps. Essentially, sideloading means app developers will get access to users without having to go through either Google Play Store or Apple App Store. 

Legislation for sideloading is reportedly being finalised in the US and the EU.

However, sideloading comes with its risks. While Apple and Google charge commissions from app developers, they also provide security to users. The two companies regularly scan and remove millions of malicious apps.

While billions of dollars are at stake, making sideloading mainstream might compromise every smartphone on the planet. Sideloading might leave smartphones vulnerable to malicious apps, a wide variety of cyberattacks and other security risks.



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