Top executives from leading gaming platforms have voiced their concerns over Google’s 30 per cent commission on in-app purchases in India, referring to the fee as an ‘extortionist tax.’ Both Google and Apple have historically required all transactions for in-app purchases to be made through their respective payment systems, with each company taking a 30 per cent cut on the transaction. This commission has been dubbed the “Apple tax” in the case of Apple.
Sai Srinivas, Co-founder and CEO of Mobile Premier League (MPL), argued that while the 30 per cent commission might be acceptable in developed markets like the US, it is essential for Indian game developers to receive a higher share of the revenue to invest in game development and produce more games. Speaking at a panel discussion at ‘Consilience 2023′, organized by the Law and Technology Society (L-Tech) at National Law School of India University (NLSIU) in partnership with All India Game Developers’ Forum (AIGDF), Srinivas stated, “My view is that we should provide Indian game developers with more revenue to invest in game development and build more games.”
Manish Agarwal, Co-founder of IndiGG, echoed this sentiment, labeling the commission on gaming apps as unfair. “The 30 per cent ‘jagirdari’ tax is an extortion, and I believe in India we should not allow anybody to do this, especially when you’re not an Indian company,” Agarwal said.
Anuj Tandon, CEO – Gaming at JetSynthesys, acknowledged that thefee was revolutionary when app stores and play stores first launched, as it significantly reduced the 70 per cent charged by OEMs or Telcos for game developers. However, he added, “At that time, it was a very good idea, but as the industry and business models have evolved, there needs to be a relook at the rates.”
Sean Hyunil Sohn, CEO of Krafton Inc. India, called for proper government intervention and the development of competition from third-party stores, which would be supported by consumers.
In September last year, Google announced plans to expand its user choice billing program for the Play Store to multiple countries, including India, Australia, Indonesia, Japan, and the European Economic Area. This new system will allow users to select alternative payment systems for in-app purchases on the Play Store.
The debate over the 30 per cent commission comes amidst ongoing antitrust cases against Google in multiple countries, including India. Last week, South Korean Assemblywoman Jungmin Hong expressed her support for the Alliance for Digital India Foundation (ADIF) in its fight against Google’s alleged monopolistic practices in India. Hong compared the situation in India to South Korea’s experience with Google’s anti-competitive behavior, which led to the world’s first ‘IAP Act’ banning mandatory in-app purchases.
South Korea’s legislation aimed to protect consumers and ensure the application ecosystem remains free from big tech’s monopolistic dominance. The Korea Fair Trade Commission (KFTC) also imposed a $32 million fine on Google for blocking the release of games on a competitor’s platform.
