Tech Giants Evict Non-Paying Apps, COAI Criticizes Free Ride

New Delhi, Mar 5 (PTI) Industry body COAI on Tuesday said technology giants are ready to evict non-paying small businesses from their app platforms though large traffic generators (LTG) themselves prefer to enjoy a free ride over telecom service providers' networks.

The comments have come against the backdrop of internet giant Google seeking to impose a fee of 11 per cent to 26 per cent on in-app payments. Google last week removed apps that were not paying the fee after the Supreme Court did not provide interim relief to companies behind these apps in their battle against the search giant's app marketplace fee.

"It is rather surprising that these LTGs, which are generally global corporates based in foreign countries, are ready to evict non-paying small businesses as they expect the "immense value" that their platform provides to the apps, themselves prefer to enjoy a freeride over the TSPs' networks, while profiting heavily from them.

"Moreover, they continue to make misleading claims that the proposed fair-share would hurt the startups, MSMEs and smaller players and constrain innovation, which is clearly contrary to the truth," COAI Director General SP Kochhar said in a statement.

After government intervention, Google has agreed to restore apps and work out a solution with apps over the dispute on payment charges.

Cellular Operators Association of India (COAI), whose members include Reliance Jio, Bharti Airtel, Vodafone Idea etc, has proposed a 5- 8 per cent revenue share fee on large traffic generator (LTG) apps like Google, Netflix, Facebook, Twitter etc to support the cost of telecom infrastructure.

As per industry estimates, 80 per cent of total data traffic carried by telecom networks is generated by LTG apps.

COAI estimates that telecom operators have spent an additional Rs 10,000 crore in 2022-23 to support traffic generated by large entertainment and communication apps.

"Ironically, these same LTGs vehemently oppose the proposal for a fair-share contribution for the additional costs borne by the telecom service providers (TSPs) for carrying their disproportionately large traffic and provisioning the increasingly demanding infrastructure required to deliver so. Moreover, the LTGs' advocates contend that this fair-share charge would deter small players and startups from being able to operate on the network," Kochhar said.

The telecom operators have said that smaller players, startups and MSMEs which generate low traffic would not be required to pay the fair-share charge, but only the top 4-5 LTGs which generate the mammoth volumes of traffic would have to contribute the same to share in the rising network costs.

"These global behemoths seem fully prepared to oust the home-grown Indian companies based on pure financial motive, with no regard for this vital ecosystem of players who bring innovation and entrepreneurship to the fore," Kochhar said.

He said that the app stores are making huge revenues from the app developers and buyers and users of apps, and also by monetising the users' data and through ads and other businesses.