Why did Vijay Shekhar Sharma knock on the doors of CCI?

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Industry leaders at the helm of India’s leading digital-focused companies attended a parliamentary standing committee on finance yesterday. BJP leader and former Union Minister Jayant Sinha chaired the closed-door meeting which probed various aspects of competition in the market.

Among those present at the three-hour session were Ola Chief Financial Officer Arun Kumar, Chairman and Chief Mentor of Make My Trip Deep Kalra, Zomato CEO Deepinder Goyal, Oyo Founder and Group CEO Ritesh Agarwal, Swiggy Vice Chairman and Group General Counsel Avantika Bajaj, Flipkart Group CEO Kalyan Krishna Murthy, Roland Landers, CEO of All India Gaming Federation, and Vijay Shekhar Sharma, Founder of Paytm.

He dwelt on various complaints that the Competition Commission of India (CCI) has received against several e-commerce players for alleged unfair trading practices. These include predatory sales tactics, steep discounts, and exploiting their monopolistic position to impose one-sided terms while competing with traditional players.

The National Restaurant Association of India (NRAI), for example, has alleged that Zomato and Swiggy take hefty commissions from restaurants, limiting the entry of new players. He also claimed that food delivery platforms leveraged their monopolistic position to bundle food ordering and delivery services, prohibiting restaurants from using their delivery staff. Additionally, not sharing customer details with restaurant partners has made them even more dependent on aggregators for repeat orders.

Do Apple and Google have the upper hand?

Interestingly, while trade bodies and industry stakeholders have complained against these e-commerce companies, some start-ups have also been the target of “anti-competitive practices” from global players. The ICC has investigated tech giants including Amazon, Apple, Google and Facebook over allegations of abuse of their dominant position in its attempt to protect indigenous e-commerce businesses and small businesses.

Source: NPCI

In September 2020, Google announced that apps in its Play Store had to use Google’s billing and payment system for certain in-app purchases, which charged a 30% commission. Apple has also enforced the use of its integrated payment system, which sets up to 30% commission.

According to the Alliance of Digital India Foundation (ADIF), several Indian developers have objected to such substantial commissions and the lack of choice in choosing a payment system, calling such policies unreasonable. “Google’s new rules could significantly reduce profit margins for developers, affecting both business viability and innovation,” it said in a report.

Following backlash from the Indian developer community, Google has postponed the application of a 30% commission on in-app purchases from its Play Store in India to October 2022. A Google spokesperson told Outlook Business, “We charge service fees for extended services. we offer on Google Play: Less than 3% of our developers worldwide pay service fees, of which 99% are eligible to pay 15% or less. Google Play‘s billing system provides consumers with an easy and secure way to transact. »

The company further added that the service fee supports its continued investments in Android and Google Play. This enables a range of distribution, development and security services, and reflects the value it provides to consumers and developers.

Unimpressed, in January 2022, CCI began investigating whether the payment policies of big tech companies like Apple and Google were hurting local app developers large and small. According to recent reports, its additional chief executive found Google’s contentious payment policy for Play Store developers to be “unfair and discriminatory.”

Clash of the app titans

In September 2020, Google removed the Paytm app from its Play Store for repeatedly violating its anti-gambling policies, although this was reinstated within hours. Without wasting any time, Paytm Founder and Chairman, Vijay Shekhar Sharma, launched the Paytm Mini App Store on October 4, 2022 to enable Indian developers to leverage Paytm’s reach and payments to build innovative new services.

In a blog post, he wrote, “Mini apps are a personalized mobile website that provides users with an app-like experience without having to download them, which would greatly benefit millions of citizens to save their data. limited and the memory of their phone. enable small developers and small businesses to set up inexpensive and quick-to-build mini-applications that can be created using HTML and JavaScript technologies.”

Paytm promised to provide the list and distribution of these mini apps in the app without any charge. For payments, developers could offer their users options such as Paytm Wallet, Paytm Payments Bank, UPI, net-banking, and cards.

During the same month, Sharma and the founders of other start-ups, including Ashish Dahiya of Policy Bazaar, Murugavel Janakiraman of Matrimony.com, Farid Ahsan of Sharechat and Vishwas Patel of CCAvenue approached the Ministry of Electronics and IT (MeitY) to raise their concerns. around Google’s Play Store billing policy.

The big fight

Paytm has led the battle on Google’s playing field to maintain its position in the growing digital payment space. UPI recorded 452 crore transactions in February 2022 worth INR 8.26 lakh crore, according to the National Payments Corporation of India.

Flipkart-owned PhonePe led with transactions of Rs 4.07 lakh crore, while Google Pay maintained the second lead with a transaction value of Rs 2.91 lakh crore. Paytm came next with transactions worth Rs 86,299 crore, followed by Amazon Pay at Rs 6,044 crore and Meta-owned WhatsApp Pay with transactions worth Rs 207 crore. As a local company taking on global entities in India’s growing digital payments market, Paytm is unwilling to give ground, at least not without a fight.

As the CCI investigates tech giants for their monopolistic approach, the government is also paying close attention to ending anti-competitive practices in a hyperconnected economy. He plans to give more teeth to existing competition laws.

The Competition Amendment Bill 2022 recommends changes to key provisions that can meet the needs of the evolving internet marketplace, with regulations for data usage and security. It also aims to strengthen the CCI team to process files more quickly.

Summarizing his meeting with business leaders yesterday, Minister Sinha told the Economic Times: “The Standing Committee on Finance is reviewing the digital economy and assessing changes to competition law that take into the issues posed by digital markets. The committee had extensive discussions with the Ministry of Consumer Affairs and the ICC on these issues. After obtaining the views of industry stakeholders, a meeting between the parliamentary committee finance and representatives from technology companies such as Amazon, Google, Meta and Twitter is expected soon.

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