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India’s most-valued unicorn accuses Google of misusing its dominance

An advertisement of Paytm, a digital wallet company, is pictured at a road side stall in Kolkata
Reuters/Rupak De Chowdhuri
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Softbank-backed digital payments firm Paytm has said Google temporarily removed its app from its Play Store without any warning and forced it to comply with its mandate.

“This will be familiar to all Indian internet companies since they face similar arm-twisting and fear of Google’s dominance over India’s digital ecosystem every day,” Paytm said in a statement yesterday (Sept. 20).

On Sept. 18, Paytm was temporarily removed from the Play Store due to “repeated policy violations,” according to Google. Hours later, it was restored.

Paytm said, Google said

On Sept. 11, Paytm launched a campaign where users could collect cricket stickers and scratch cards on making transactions on its app via the unified payments interface (UPI), which allows users to transfer money via an app without the need for any bank account details. Users could win cash backs upon collecting a certain number of stickers.

As per Google, this scheme itself did not violate its policy but Paytm was taken down because it was using its payments app to promote Paytm First Games, which has a daily fantasy sports aspect to it.

“Our policies don’t allow online casinos or support any unregulated gambling apps that facilitate sports betting, including daily fantasy sports in India,” a Google India spokesperson said in a statement. “We enforce our policies very thoughtfully to provide a safe and secure experience for consumers, while also giving developers the platform and tools they need to build sustainable businesses. In the case of repeated policy violations, we may take more serious action which may include terminating Google Play Developer accounts. Our policies are applied and enforced on all developers consistently.”

As per Paytm, Google sent its first notification at 11.30 am on Sept. 18 and subsequently banned the app without giving it the opportunity to respond. “We maintain that our cashback campaign was within guidelines, as well as all laws of the land,” Paytm in its statement. “We did not break any rules and there was no violation. It is not related to gambling in any manner whatsoever.”

As per Paytm, the scratch card-based “Paytm Cricket League” cashback campaign drew unwarranted flak for violating online gambling rules.

Paytm has also said that Google’s blitz was rooted in more dubious reasons.

War of the digital payments apps

In its statement, Paytm suggested that Google temporarily removed its app in an attempt to suppress a formidable rival.

“Google’s own payment app, Google Pay regularly runs similar campaigns in India,” it said, citing Google Pay’s “Tez Shots” campaign. “Presumably, such cashback campaigns of Google Pay are not in breach of Play Store policies, or maybe they are, but a different set of rules apply to Google’s own apps.”

It doesn’t help that the rules are blurry. Paytm can’t advertise it’s fantasy sports app on its payments app but it can do so via Google’s search and Google-owned video-sharing platform YouTube.

This isn’t the first time Google has been accused of giving its own apps an unfair advantage. Since a complaint was filed in February, India’s antitrust body has been looking into these allegations. Over 95% of Indian smartphone users use Android phones—the operating system owned by Google—and Google decides the rules for their app store.

Outside India, too, Google and Apple have been accused of wielding too much power on the apps ecosystem through their app stores. In the US, Fortnite developer Epic Games brought lawsuits against these digital market gatekeepers in August.

CEO Sharma is in for a “long fight,” involving the government and the Competition Commission of India (CCI) to protect Indian startups against the tech major, he told daily newspaper Economic Times.

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