Crosshairs on Transparent Background: Startups' Sense of Privilege Exposed Again

The recent controversy surrounding Google Play Store's billing policy has once again put many Indian startups in the crosshairs, and for good reason. With scarce angel/VC funds available to burn and profitability hard to come by, founders of these new firms are often forced to rely on government support to stay afloat. However, their lack of sustainable revenue models and sense of privilege have led them to disregard regulatory norms, leaving them vulnerable to being pulled out of the Play Store.

Many startups in India have failed to grow their business after initial success due to this very reason. Those who didn't clear their dues were removed from the Play Store, a harsh lesson that few seem to have learned. But after the Supreme Court refused to interfere with Google's billing system, disgruntled startups were left with no option but to comply.

While most developers are already following Google's policy on payments, a handful of them had an extended relief since they successfully litigated the matter in court. Play Store hosts over 2 lakh apps in India and provides certain features and services to app developers. Google claims it has the right to seek a fee from apps using its Play Store services.

Google's action came after some startups moved the Supreme Court challenging Google Play Store's 'exploitative' billing policy, which the apex court granted no relief on. They also wanted the government to chastise the US firm for enforcing its own billing system. Piqued by the decision, promoters of some apps took to social media and unloaded their anguish over the tech giant's 'evil' business model.

Google temporarily removed 10 app developers from its Play Store for not complying with its updated payment policy (11-26 percent commission on in-app payments). The latest face-off between Google and some app developers over non-payment of service fees further exposed the sense of privilege among startup founders. It seems no lessons have been learnt from these episodes.

Such blatant violations of minimum standards of governance always put startup founders in regulatory crosshairs. Similarly, Byju's was reprimanded by the Ministry of Corporate Affairs for unexplained delay in reporting its financials. Earlier, Paytm was hauled up by the banking regulator for persistent non-compliance with multiple norms.

They also feel privileged enough to be exempt from regulations laid down not just by authorities but also by private partners whose services and platforms they use to do business. The latest Google Play Store episode reveals that some startup promoters believe regulations can be bent and rules broken. India's tech startups and new-age firms seem to have a compliance problem.

This article highlights the need for Indian startups to adopt sustainable revenue models and comply with regulatory norms. With the government providing limited support, startups must focus on building a strong foundation for their businesses to thrive in the long run.

Crosshairs on transparent background