CCI finds Google’s Play Store payments policy ‘unfair’; General Catalyst to double down on India

In September 2020, Google said it would soon require app developers to mandatorily use its own payments system, on which it charges heavy commissions. It soon postponed the new policy to March 2022 and then to October 2022 for developers in India after a huge backlash. Now, India’s competition watchdog has deemed the policy ‘unfair and discriminatory’.

Also in this letter:
■ General Catalyst looks to boost its India investments
■ TCS turns talent factory for Tata Group
■ Delhi HC adjourns WhatsApp appeal in CCI case


CCI finds Google’s Play Store payments policy ‘unfair, discriminatory’

The Additional Director General of the Competition Commission of India (CCI) has found Google’s contentious payments policy for Play Store developers to be ‘unfair and discriminatory’, several sources told us.

The law: Section 4 of the Indian Competition Act states that no enterprise may abuse its dominant position, imposes unfair practices for the sale of goods and services, or indulge in that limit market access for others.

What’s next? Further hearings on the findings of the probe will begin shortly, the sources said. Google will then have a chance to present its argument, following which a verdict will be given. One of the sources said CII “is quite convinced that the policy will definitely harm developers if implemented.”

There’s more: The regulator also examined claims that Google manipulated search results to Google Pay and has directed the Reserve Bank of India to look into the matter, the sources added.

Google’s response: A representative for Google said the company was reviewing the report, adding, “This report is not the CCI’s final decision and does not prejudge the outcome of the CCI’s inquiry.” The company will “continue to engage with the CCI and demonstrate that our practices benefit Indian consumers and developers, without in any way restricting competition,” the person added.

Case history: The dispute dates back to September 2020, when Google—in a global announcement—said it would enforce rules that require app developers to use its payment system.

After facing a severe backlash, it pushed the implementation to March 2022 and then to October 2022 for developers in India.

It also reduced the commissions from 30% to 15% for the first $1 million of revenue that the developer earns each year. While stating that less than 3% of its developers globally pay a service fee, 99% of whom qualify to pay 15% or less.

Google

Not the first: In an earlier investigation, commissioned in 2019 and concluded in 2021, CCI found Google imposed a one-sided contract on original equipment manufacturers (OEM) to ensure its dominance for services related to search, music (through YouTube), browser (through Chrome) , and app library (Play Store), among others.


VC fund General Catalyst looks to boost its India investments

Nishar

Deep Nishar joined General Catalyst in January

US-based venture capital fund General Catalyst, which has backed Stripe, Snap and Airbnb, among others, will increase its focus on India and strike more deals across stages as it looks to bolster its presence here.

Leading the way: At the vanguard of this drive into India will be former SoftBank investor Deep Nishar, who joined General Catalyst in January, and Anand Chandrasekaran, a former executive with Snapdeal and Meta.

Hemant Taneja, the fund’s managing partner, who is visiting India, said he was excited about the opportunity here and that the fund would make early-stage to late-stage investments from its recent haul of $4.6 billion across three funds.

Hemant

Hemant Taneja

Since 2019, General Catalyst has made about a dozen investments in India and is looking to significantly increase its presence here, though it doesn’t have a country-specific capital allocation.

Its top India bets include credit card payments startup Cred, fintech firm Uni and used car marketplace Spinny.

Seven investments this year:
Nishar, who is also based in the Valley, told us that General Catalyst has already made seven new investments in India this year and will spend more time evaluating startups across segments such as consumer, fintech, web3 and crypto, agri-tech and others. It invested $25 million as part of a broader funding round in Farmart.

The firm may also hire a local team at time, but this year there are likely to be frequent visits by Nishar, Chandrasekaran and others. “It will be more intentional, going forward. We are not shy about cheque sizes and are willing to write large cheques,” he added.

Infographic Insight

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TCS turns talent factory for Tata Group

TCS

Tata Consultancy Services (TCS) is turning into a talent factory of sorts for the Tata Group, with former executives of the country’s largest software firm now holding top leadership roles in several Tata businesses.

The group’s dependence on talent from TCS has significantly increased in the past few years as it sharpens focus on digital across subsidiaries to reinvent their businesses, experts said.

It has launched four new businesses since the onset of the pandemic and chief executives of two of them came from TCS.

  • Pratik Pal, CEO of Tata Digital — which is stitching together the group’s ambitious ecommerce foray with its soon-to-be-launched super-app — is a 28-year veteran at TCS where he led the retail, CPG, and travel and transportation verticals.
  • Venguswamy Ramaswamy, the brain behind TCS iON platform and creator of SME and B2B digital solutions at TCS, now leads the group’s B2B digital platform Tata Nexarc.
  • Leaders such as AS Lakshminarayanan, CEO and MD of Tata Communications, and N Sivasamban, CEO of Tata Communication Transformation Services (TCTS), are also former TCS executives.

Mission Air India: “We are also trying to inject TCS people into Air India to organise its IT,” an insider said. “Clearly there’s a phenomenal amount of talent coming up from TCS to supplement the group’s leadership needs. They are bringing those inputs and bringing other companies’ tech at par with world class standards.”

The conglomerate turning into TCS for the right talent fit for group companies is not surprising given its increasing focus on technology.

N Chandrasekaran – himself CEO of TCS for eight years – was appointed chairman of Tata Sons in January 2017, he has highlighted the digital focus of the group while executing ‘One Tata’ strategy around the pillars of simplification, synergy and scale, or 3s.

TWEET OF THE DAY


Delhi High Court adjourns WhatsApp, Meta appeal in CCI case to July 21

WhatsApp

The Delhi High Court has adjourned to July 21 its hearing of an appeal by Meta and its subsidiary WhatsApp against a single-judge bench’s order dismissing their plea to squash a Competition Commission of India probe into WhatsApp’s 2021 privacy policy.

PDP Bill awaited: A division bench of Justices Poonam Bamba and Rajesh Shakdher adjourned the matter after WhatsApp’s counsel, senior advocate Harish Salve, said the Personal Data Protection Bill was yet to be passed by Parliament.

WhatsApp had given an undertaking to the central government that it would not enforce the privacy policy till the bill was cleared, Salve said.

Backstory: In January 2021, the CCI had decided to look into WhatsApp’s newly announced privacy policy, following claims that it allowed greater data sharing between WhatsApp and Facebook (which later renamed itself Meta) and violated the Competition Act, 2000. On March 24 last year, the competition watchdog directed its investigating arm to launch a probe.

WhatsApp and its parent challenged CCI’s order, but a single-judge bench of the Delhi High Court dismissed the pleas on April 22, 2021.


Indian startup IPOs remain on hold amid geopolitical headwinds

startup-ipo.

Amid high volatility in the public markets, many top-tier Indian startups have decided to postpone their IPO plans.

  • Delhivery, for instance, received Sebi’s approval for its IPO in January, but in an exclusive chat at Economic Times Startup Awards in Bengaluru on March 12, Sahil Barua, its cofounder and chief executive, broke the news that the company had decided to put its IPO plans on hold, partly because of market volatility.
  • Mumbai-based API Holdings, which runs PharmEasy, is also uncertain about its IPO plans despite receiving the clearance from Sebi last month. The company, which acquired diagnostic chain Thyrocare last year, was initially planning to launch its Rs 6,250 crore issue this financial year.
  • As for companies such as Urban Company, which was planning an IPO in the next 18-24 months, the focus has changed. “This year we would rather just focus on the business and continue to grow. When markets become neutral we will reconsider (our IPO),” said Abhiraj Singh Bhal, its cofounder and chief executive.

ETtech Done Deals

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  • Enterprise software-as-a-service (SaaS) firm OSlash has raised $5 million led by entrepreneurs from India and the US, including Kunal Shah, founder of Cred; Christian Oestlien, vice president of product at YouTube; Kevin Weil, president at Planet; Akshay Kothari, chief operating officer at Notion; and Cristina Cordova, partner at First Round Capital.
  • UK-based global talent investor Entrepreneur First (EF) has announced early-stage investments in six tech startups in India in its latest ‘Investor Reveal’. Amicus AI, Grabbit Live, Capitall, unScript AI, Coupl and FloWorks. EF has so far invested in 42 tech startups in India since its launch in 2019:

Other Top Stories By Our Reporters

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India ‘critical’ to Salesforce: Software as a service (SaaS) firm Salesforce believes India is extremely critical—as a market and as a talent hub for product development—as businesses across the board buy digital technologies to devise their return-to-work strategies, co-CEO Bret Taylor said at a global media conference.

Sales from local products in India to double this year, says Honeywell CTO: Honeywell’s India revenue from products developed for the local market is expected to double to $40 million in 2022 from last year, as it has seen many new business opportunities emerging out of the pandemic, a top executive said.


Global Picks We Are Reading

■ Pro-Russia Sentiment on Indian Twitter Draws Scrutiny (NYT)
■ TikTok being used by 16% of British toddlers, Ofcom finds (The Guardian)
■ Waymo to send driverless cars through San Francisco (WSJ)

Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.

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