Paytm, other Indian startups vow to fight "big daddy" Google's clout-sources

IndiaMART InterMESH

05/10/2020 24:30

(Repeats Saturday story, no change to text)
    * India startups in talks to challenge Google, file
complaints
    * Startups mulling new association to take on Google - exec
    * Google counts India as key market with focus on startups

    By Aditya Kalra
    NEW DELHI, Oct 3 (Reuters) - Dozens of India's technology
startups, chafing at Google's local dominance of key apps, are
banding together to consider ways to challenge the U.S. tech
giant, including by lodging complaints with the government and
courts, executives told Reuters.
    Although Google, owned by Alphabet Inc  GOOGL.O , has worked
closely with India's booming startup sector and is ramping up
its investments, it has recently angered many tech companies
with what they say are unfair practices.
    Setting the stage for a potential showdown, entrepreneurs
held two video conferences this week to strategise, three
executives told Reuters.
    "It's definitely going to be a bitter fight," said Dinesh
Agarwal, CEO of e-commerce firm IndiaMART  INMR.NS . "Google
will lose this battle. It's just a matter of time."
    He said executives have discussed forming a new startup
association aimed chiefly at lodging protests with the Indian
government and courts against the Silicon Valley company.
    Nearly 99% of the smartphones of India's half a billion
users run on Google's Android mobile operating system. Some
Indian startups say that allows Google to exert excessive
control over the types of apps and other services they can
offer, an allegation the company denies.
    The uproar began last month when Google removed popular
payments app Paytm from its Play Store, citing policy
violations. This led to a sharp rebuke from the Indian firm's
founder, Vijay Shekhar Sharma, whose app returned to the Google
platform a few hours later, after Paytm made certain changes.
 urn:newsml:reuters.com:*:nL4N2GF2II
    In a video call on Tuesday, Sharma called Google the "big
daddy" that controls the "oxygen supply of (app) distribution"
on Android phones, according to an attendee. He urged the
roughly 50 executives on the call to join hands to "stop this
tsunami."
    "If we together don't do anything, then history will not be
kind to us. We have to control our digital destiny," Sharma
said.
    One idea raised was to launch a local rival to Google's app
store, but Sharma said this would not be immediately effective
given Google's dominance, one source said.
    Sharma and Paytm, which is backed by Japan's SoftBank Group
Corp  9984.T , did not respond to requests for comment.
    Google declined to comment. It has previously said its
policies aim to protect Android users and that it applies and
enforces them consistently on developers.
    
    STRAINING TIES
    This week the U.S. company angered some Indian startups by
deciding to enforce a 30% commission it charges on payments made
within apps on the Android store.  urn:newsml:reuters.com:*:nL1N2GP11Z
    Two dozen executives were on a call on Friday where many
slammed that decision. They discussed filing antitrust
complaints and approaching Google's India head for discussions,
said two sources with direct knowledge of the call.
    Participants included sports technology firm Dream Sports,
backed by U.S. hedge fund Tiger Global, social media company
ShareChat and digital payments firm PhonePe, the sources said.
None of those companies responded to requests for comment.
    Google defends the policy, saying 97% of apps worldwide
comply with it.
    Google already faces an antitrust case related to its
payments app in India and a competition investigation into
claims it abused Android's dominant position. The company says
it complies with all laws.  urn:newsml:reuters.com:*:nL4N2D93DL 
    These spats strain Google's strong ties to Indian startups.
It has invested in some and helped hundreds with product
development. In July, its Indian-born CEO Sundar Pichai
committed $10 billion in new investments over five to seven
years.  urn:newsml:reuters.com:*:nL3N2EK20K
    The conflict "is counterproductive to what Google has been
doing - it's an odd place for them to be," said a senior tech
executive familiar with Google's thinking. "It's a reputation
issue. It's in the interest of Google to resolve this issue."
    Google looms over every aspect of the industry.
    Paytm on Saturday told several startup founders, in a
communication seen by Reuters, that it was collating input on
challenges to Google Play Store and its policies to submit to
the authorities.
    To craft their attack, they are using a shared Google
document.

 (Reporting by Aditya Kalra in New Delhi; Editing by Euan Rocha
and William Mallard)
 ((aditya.kalra@tr.com; +91-11-49548021; Twitter @adityakalra;))