Transcript of interview with PhonePe founder and CEO Sameer Nigam on the Google vs Paytm controversy.
With all that’s been happening between Paytm and Google, on the face of it, what’s your take as the founder and CEO of one of India’s leading payment apps? How do you really see this whole issue and the way it played out? Where do you stand on this?
I think it’s unfortunate Anytime a major app, any app in any categories taken down, it’s not great for the brand is not great for the ecosystem, either. There’s millions of users using the app. I guess the question is, what are the conditions under which they were taken down? I think I think the reason it got here is because of a couple of sort of idiosyncratic, if I may call it idiosyncratic policies. But they are consistently applied. I mean, just because we face them, too. So there’s two things to the Google policy, they put out a blog, but I don’t think they cover the details. If you just search for play store gambling policies. One they allow gambling only in four markets. It’s US, UK, Ireland and France. There’s no answer. We’ve got till date on why India is not allowed Fantasy games, or poker, or Rummy given that the Supreme Court has ruled that these are skill based games, which is frustrating as an ecosystem. And I can empathize with Paytm on the first game site itself. I guess the second one is quite specifically a clause that says, if you are advertising that’s allowed. You can advertise these games, but you can’t redirect to another half if you have an ownership interest in them. And my gut says this is where paytm has tripped because they have an interest in Paytm first games.
The fact that they are a monopoly, they have a very powerful platform is a different issue. But based on your own experience, what you’ve seen and read so far last week, would you agree that it has been consistent despite however idiosyncratic its policies are?
I think if you’re asking me if they’ve applied them consistently, I believe they have if you’re asking me if it’s right, I believe it’s not. And those are two very different things. Because the policy is being defined by a team that’s not sitting in India . repeated please, on our end over the last year, we’ve had at least four or five takedown notices. And every time it goes, our request for a hearing goes into a sinkhole. We’ve had one from Apple in the past, and we got a response from their policy team within 48 hours. There’s a huge difference. The reason it’s relevant, that the right or wrong of it is relevant is that they are a natural monopoly .Natural monopolies are not evil, it just means that they have the best OS or the right OS match for a market like ours. But it does mean that there needs to be a redressal mechanism where they respond. When you reach a 95% plus monopoly situation, what is the rule of engagement in the market you play in? And I think this is where our laws are falling short, our CCI is falling short. We’ve always been very narrowly defined matters of antitrust-searches are different, ads or different gaming is different. OSS different plays those different. No, they’re not, because they’re leveraging that exact same ecosystem to compete against paytm or compete against PhonePe all day long. .
But Sameer would you have done what Paytm tried to do, in terms of, you know, advertising their game on the app, or using cashback as a means of reward, because there are reports that you know, these, you could play these games using the cashback. And you could also plough the winnings that you earn on the fantasy game back as cash back into the app. Are these workarounds that a phone people have done, which Paytm tried to do, and then they got pulled down from the Play Store? Among the other reasons.
I won’t speak to what we would not would not have done if we were in gaming. I think what they’ve done is consistent with, like, using cashback to promote an application or a category is consistent with anything that is happening across every category. That’s very normal consumer behavior. Would we do it perhaps? not at the risk of getting taken down just because we’ve experienced the threats before. But is it a good fight to fight- for a change I might actually align. I think this is a good fight to fight.
Okay, good fight to fight. That’s an important point for me. So let me ask you, have you reached out to Vijay or has Vijay Shekar Sharma reached out to you after this issue? Can we see founders banding together against this monopoly of Google and perhaps ask for a more fair way in which they set these rules and also enforce these rules. Have these conversations started happening between founders of some of the biggest payment companies payment apps in India?
Definitely no conversation between Vijay or I on this And I’m assuming he’s been tied up anyway. I think first port of call we’ll be talking to the folks you know, at Google. Right. I’m sure that they’ve also been pretty embarrassed with how much hoopla this has caused.. For years, you could not advertise on any Google brand name. I could not advertise against Google pay. But every single Phone pe or Paytm user sees a download Google pay app on Play Store every single time. And it’s like left pocket right pocket economics. We have to figure out how do we make it so that their sheer size does not discourage people from creating new OS. We have really good- Indus OS in India and map my india, but how do we as an ecosystem shape these up? The answer to Google iOS is not government of India, or iOS, it’s going to be private collaboration. And we’ll have to figure out how we actually get there. The role we just won’t be operating in perhaps 10 of us need to get together and create a R & D fund… I don’t know
Even as we speak, the CCI is also probing an antitrust complaint against Google, this was reported sometime in February this year for the control they have under dominance they have through their Android OS. They think, you know, CCI could be a solution or a legal recourse would be a solution. How do you really see this going forward? Or is the answer as you say, going to be perhaps an industry collaborative effort and alternative to this natural monopolies so to speak?
I don’t think legal recourse will work here because as I said, Google is well within its rights as a private company to enforce a policy that’s more restrictive, on the categories that open. They could tomorrow say we won’t allow education apps, and that’s still legally allowed. CCI is I think, where the answer lies, but it needs to reimagine its charter significantly, the problem we run into, and the reason we’ve never approached them is that they look at the definition of category, very, very narrowly. So and their view is, you must be in the category of demonstrating monopolistic practices within the category for them to act. The problem is playstore distribution gives every Google vertical product, a huge distribution edge, where we spend hundreds of millions of dollars, they get it for free. they stack up the rules on the advertising side. I mean, all these things, again, they’re getting heard in the US Senate. So CCI, then needs to decide what is Google’s business? Is it 10 different businesses, because they will actually not be able to build a case on any one alone. If they look at the composite, then I think there’s a very powerful case, right? Can one business because they’re playing house, they’re playing dealer, and they’ve got about six of the eight seats on the poker table. Now. They’re playing everywhere. And I think CCI doesn’t look at it that way. So I’m not very hopeful in the current context of how CCI looks at cases. You can’t punish Google for being a natural monopoly. You just need to demand consistency across category play.
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