The Resurgence against the App Store Monopoly

This piece will walk you through the recent resurgence against the app store monopoly. With Fortnite filing a lawsuit against Apple and Paytm launching their own ‘mini’ app store to fight back against Google, looks like the revolution has begun. Let’s dive straight into the story.

Fortnite against the App store Monopoly

On August 13th, 2020, one of the biggest games on smartphones disappeared from the Apple App Store.

Chances are you know this game, it is called Fortnite, it similar to PUBG. Fortnite had implemented its in-app payment system against the App store’s rules, which is why Apple kicked it out of its app store.

But what transpired post this action has had global repercussions. Fortnite filed a lawsuit against Apple and released a parody video mocking Apple. It did the same against Google, thus taking on the behemoths of the tech world head-on. Take a look at the video below:

The fundamental issue for all these actions by Fortnite was the charges (as high as 30%) Apple and Google levy on app developers for using its platform. To understand why Apple and Google command such power, let us try to look at their platform business model.

Google/Apple App store Business Model
Google and Apple App store business model

Apple and Google’s duopoly in smartphone OS gives them unbridled power over all other players in the game. A massive credit for establishing this power went to Steve Jobs when he introduced the App Store for mobile software distribution, which was readily copied by Google for its Android Play store. It has revolutionized the way the developers push their apps to users. Platforms like Steam have built on this model and have become hugely successful. Gone are days when you need to buy a CD of FIFA for your PlayStation; now, all the latest games are available at a click of your thumb. But this convenience for users is seriously hurting developers who must pay the platform charges.

Also, now that we see subscription-based apps, the charges by Apple/Google on each transaction are huge. Many companies have tried to escape these charges; for example, you can’t buy an eBook on the Kindle app; it needs to be purchased on amazon’s website. Similarly, Spotify subscriptions for iOS can only be purchased from its website and not on its app.

Fortnite’s lawsuit against Apple and Google seeks to end the monopolistic control these tech giants have on the ecosystem.

Indian Mahabharata

A similar war is shaping up in India; homegrown tech companies are trying to take on Google, whose android ecosystem holds nearly 99% share in the Indian smartphone market. The seeds of this war were laid when Google launched Gpay in India, taking on Paytm, which had raced on the backdrop of the digital push by the GoI post demonetization. Gpay is the market leader for digital payments leaving behind players like Phonepe, Paytm, Mobikwik.

Related: Take a look at the Story of Paytm

The recent removal of Paytm from the play store was one of the many scuffles this war is seeing. Google had pulled Paytm from its app store for violation of its gambling policies. While Paytm believes it was just providing cricket-themed scratch cards, which is only another version of providing cashback. Google said that the Play Store prohibits online casinos and other unregulated gambling apps that facilitate sports betting in India. On the other hand, we’ve seen Google Pay freely using their scratch card for rewards.

In a televised interview with CNBC TV18, Paytm co-founder and chief executive Vijay Shekhar Sharma accused Google of not allowing Paytm to acquire new users. To quote him:

app store monopoly

“This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build a digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations,” he said.

The rising Aatmanirbhar app store aspirations

How can we discuss any issue in India without invoking the word ‘Aatmanirbhar.’?

Very recently, Paytm has developed a ‘mini’ app store that has developers of Decathalon, Ola, Park+, Rapido, Netmeds, 1MG, Domino’s Pizza, FreshMenu, NoBroker, etc.

app store monopoly

paytm-mini-app-store

When the buzzword is Aatmanirbhar, how can the government fall behind? The Government has also expressed its aspirations of developing an App Store taking on Google and Apple in India.

The less we discuss this, the better it will be for everyone.

On a concluding note, the pushback led by Paytm and other tech companies has forced Google to delay its new Play Store billing rule in India to April 2022 from the current global timeline of September 2021. Though it might seem like a significant win for the companies fighting back, it is highly unlikely that the bullies (Google) will be bullied.

Author:

The author of this piece is Prasad Antapurkar. Share it with on WhatsApp. Let us know your thoughts about the app store monopoly, do you think other players can fight it back?

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app store monopoly