Google on the ropes in India

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This week, Google announced it would be making a series of changes to Android in India to comply with a ruling by the country’s competition watchdog last October, which found it guilty of abusing its market dominance.

October 20, 2022: The Competition Commission of India (CCI) fined Google Rs 1,337.76 crore and asked it to make several changes to its Android policies to prevent abuse of its dominant position in the mobile operating system market. The regulator has given Google three months until January 19 to comply.

Oct 25: The CCI fined Google another Rs 936.44 crore for its Play Store billing policies and asked it to make several changes to these rules as well, such as allowing third-party payment processors.

The appeals

December 21: Google appealed to the National Company Law Appellate Tribunal (NCLAT) against the Android ruling.

Indian competition law gives companies 60 days to appeal CCI orders with NCLAT.

The court refused to grant a temporary stay and ordered Google to deposit 10% of the fine within three weeks.

January 9, 2023: Google appealed the ICC’s second order regarding its Play Store policies in the NCLAT.

January 11: Two days later, the court again rejected Google’s interim relief and scheduled the next hearing for April 17. The tech giant then turned to the Supreme Court.

January 20: A three-judge panel of the Supreme Court delayed the implementation of the January 19 CCI Android directives by a week, but refused to block them. He also asked NCLAT to rule on Google’s appeal by March 31.

The result

January 25: A day before the deadline, Google announced several changes to Android in India, such as allowing device manufacturers to license individual apps for pre-install and allowing users to choose their default search engine. It has also made some changes related to its in-app billing system on the Play Store.

January 26: Some Indian internet startups said Google’s changes were purely cosmetic and accused the tech giant of using delaying tactics.

(With contributions from agencies)

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ETtech budget watch

Fintechs expect rewards, new funding avenues and more: Indian fintechs are looking for incentives to help broaden their participation in the formal financial economy, industry organizations and fintech founders told ET. The fintech industry, which has seen several regulatory reforms over the past year, is seeking priority sector status to promote financial inclusion, along with stops to cover the costs incurred in growing the country’s digital payment network. PE, VC investors seek tax parity: Private equity (PE) and venture capitalist (VC) investors have sought tax parity in upcoming budget, saying differential tax treatment for listed and unlisted securities is skewing decisions of asset allocation.

In essence, we said, many investments in emerging sectors are still managed by foreign capital and we have not seen a drastic fundamental change, Karthik Reddy, co-founder of Blume Ventures and president of the Indian Venture and Alternate Capital Association (IVCA) said to ET.

To accelerate public markets, investors were given perks 10-15 years ago and said to simply normalize them, he added.

Tech wants safe harbor rates, APA timing: Tech companies have asked the government to cut taxes in the next budget, boost startups and increase the ease of doing business. IT industry lobby group Nasscom has urged the government to prescribe timelines for closing Advance Pricing Agreements (APAs). The government should streamline APAs, mutual agreement procedures (MAPs), regulations and benchmarking, said PN Sudarshan, partner and TMT industry leader, Deloitte.

In e-commerce and food delivery

Exclusive ETtech | Accel, Tiger Global May Exit Flipkart: Two of Flipkart’s early lenders, venture fund Accel Partners and New York-based investment firm Tiger Global, are in talks to sell their remaining stake in the e-commerce firm , which collectively accounts for about 5% to its parent Walmart, sources told us. The Bentonville-based American retail giant could pay about $1.5 billion for this stock buy, they said. While Accel owns just over 1% stake, Tiger Global currently owns around 4% in Flipkart. Once the deal is finalized, Walmart’s stake in Flipkart will increase from its current 72% stake.

Meesho Tightens Returns Process, Sparks Outcry: Sellers are up in arms over e-commerce firm Meesho’s move to tighten control over product returns, sources have told us. Meesho has changed its product return policy following feedback from its third-party logistics partners, the sources added. In recent weeks, sellers, especially in Surat, one of the biggest hubs for fashion and apparel merchants, have given Meesho negative reviews and ratings on its app and stopped processing orders through the platform, merchants said.

Zomato to Shut Down 10-Minute Food Delivery Business: Zomato is shutting down its 10-minute food delivery service Zomato Instant less than a year after its launch as it chases profitability amid challenging market conditions. The company recently told its restaurant partners it would seek to shut down the service, two sources familiar with the development said.

Zomato, however, said it is not shutting down the 10-Minute Delivery business, but is rebranding the service. “Instant will not close. We are working on a new menu with our partners and renaming the business. All finishers remain intact and no people are impacted by this decision,” the company said.

Read also | Zomato is looking to hire 800 people, says CEO Deepinder Goyal

Startup layoffs, exits

E-commerce firm Dealshare has laid off about 100 employees, or more than 6% of its 1,500-strong workforce. Confirming the development, Dealshare founder Sourjyendu Medda said the decision is related to his business plan for the upcoming financial year with a focus on profitability.

With this development, Dealshare joins a growing number of startups who have laid off employees in the new year to cut costs and streamline operations amid a prolonged funding squeeze and slowing growth.

ShareChat co-founders Farid Ahsan and Bhanu Pratap Singh will step down from their active roles at the vernacular social media platform they started eight years ago, co-founder and CEO Ankush Sachdeva told staff in an internal email.

Read also | ShareChat Fires Around 500, CEO Says ‘Overrated Market’

With nearly every major tech company announcing global layoffs one after another, industry professionals in India are frantically searching for safer options. Fearing further layoffs, employees in the tech sector are looking for more stable jobs that often strictly exclude startups, said recruiting experts at companies including Transearch, ABC Consultants, Adecco, Careernet and CIEL HR Services.

Meanwhile, Google has put on hold its Program Electronic Review Management (PERM), a key step in acquiring an employer-sponsored green card. The tech giant has sent an email to overseas employees, informing them that it will suspend any new PERM applications, leaving workers in limbo. An application for a PERM is a critical first step in the green card (permanent residency) process.

Technical policy

Google makes several billing changes to Android and the Play Store; Startups say they’re calling it delaying tactics: Google has announced several key changes to the way it runs its flagship Android operating system for smartphones and the Google Play Store in India to comply with two rulings by the Competition Commission of Indias (CCI). The changes came a day before the January 26 deadline set by the Supreme Court.

Meanwhile, startups in India say the tech giant is employing delaying tactics, cosmetic policy changes. Google is following the “same playbook” it used in Europe and South Korea and is exploiting loopholes to demonstrate compliance with orders that would go into effect on Jan. 26, the developers told ET.

New Social Media Influencer Guidelines To Bring Transparency But Lead To Higher Costs, Says DigitalROI: New guidelines for social media influencers to regulate promotions could lead to higher costs for advertisers as they may have to spend more more for creating compliant content, DigitalROI said. Last week, the government announced endorsement guidelines for celebrities and social media influencers mandating disclosure of benefits if they are promoting a product or brand through their social media platforms. Otherwise, a penalty up to Rs50 lakh will be applied.

Tech firms point to problems with Delhi’s EV fleet draft policy proposals: A group of tech firms have flagged proposals envisaged in the Delhi government’s draft aggregator policy launched last July, which seeks to convert taxis and delivery fleets in the national capital in electric vehicles in a phased manner. Industry body IndiaTech, which represents companies such as Ola, Zomato and Zepto, argued in its representation to the Delhi government that implementing the policy could create a burden on delivery executives and taxi drivers who own or lease vehicles.

In other news

It cost PhonePe Rs 8,000 crore to come to India, says Sameer Nigam: PhonePe co-founder and CEO Sameer Nigam said on Wednesday that since the startup completely shifted its domicile from Singapore to India in October, around 20 unicorns and their investors have inquired about the process and are actively looking to move here. However, he added that our investors paid nearly Rs 8,000 crore in taxes just to allow us to go back to India.

Rajasthan HC Tells DGGI To Stay Enforcement Action Against MyTeam11: The Rajasthan High Court has asked the GST Intelligence Directorate General (DGGI) to refrain from taking enforcement action against Jaipur-based gaming company MyTeam11. This followed a petition from the company after DGGI issued a show lawsuit notice alleging it was misclassifying the sale of indictable claims as services and thus evading the tax.

(Graphics and illustrations by Rahul Awasthi)

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