NEW DELHI :
Microsoft’s decision to allow developers to keep 100% of revenues from in-app purchases (IAPs) or services and digital goods sold through apps may force Apple and Google to rethink their strategies, considering that the two tech giants have faced criticism for forcing app developers to use built-in payments tools on their Android and iOS app stores, and charging commission on sales.
Following the Windows 11 launch, Microsoft said developers can use their own commerce platforms and need not pay fees. “It’s a positive push in narrative that you have one (app) store taking a stand that it’s not going to charge developers atrociously high (rates), and it’s going to be reasonable about it,” said Rameesh Kailasam, CEO, IndiaTech.Org, a lobby group for startups. “You can read it in two ways. One, of course, is that it’s a significant push by Microsoft to gain more apps. But the second is that it makes the narrative stronger for many of us who have been asking why Google and Apple charge us so much.”
Indian startups have been up in arms against Google for charging 30% commission on in-app purchases, prompting Google to push back its policy compliance deadline to April 2022 in India. Apple and Google have also cut fees to 15% of revenues for the first $1 million earned by apps from IAPs.
Murugavel Janakiraman, founder and chief executive, Matrimony.com, said Microsoft’s move is a shot in the arm for startups, as did Bengaluru-based Oliver Jones, who runs Bombay Play, a gaming firm.
However, given that most app downloads happen on mobiles, while Windows 11 is meant only for desktop devices, it may not influence other players, they added.
“In terms of impact, Microsoft doesn’t have enough market share in this space. But its stance further increases the pressure on Google and Apple,” said Jones. “What we have realized over the past year is that this 30% cut for app stores is completely arbitrary.”
Janakiraman added: “The mobile is the most important device with 90% of app downloads. Any internet service access in India is happening via mobile apps.”
Furthermore, Google’s and Apple’s business models have also been under the regulatory scanner for a while. A group of 15 startup founders held a virtual meeting with the Competition Commission of India (CCI) last October to inform the regulators about the prevailing situation.
Experts said Microsoft’s move may not have an impact on future regulations. “I don’t think the CCI will be terribly impacted by what one company is saying or doing,” said Arindrajit Basu, research lead, Centre for Internet Society.
In fact, Akash Karmakar, partner at the Law Offices of Panag and Babu, said if Microsoft gains customers through this model and then starts charging developers, it may attract an investigation for predatory pricing practices.
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