CCI antitrust investigation finds Apple abused position in India’s app market
An investigation by India’s competition authority has found that Apple abused its dominant position in the market for app stores for its iOS operating system and engaged in “abusive conduct and practices”, according to a confidential report seen by Reuters.
The Competition Commission of India (CCI) has been investigating Apple Inc. since 2021 for allegedly abusing its dominant position in the app market by forcing developers to use its own in-app purchase system.
Apple denies any wrongdoing and says it is a small player in India, where phones running Google’s Android system are dominant.
The CCI’s research arm said in a 142-page report, which is not public but was seen by Reuters, that Apple exerts “significant influence” over the way digital products and services reach consumers, particularly through its iOS platform and the App Store.
“The Apple App Store is an unavoidable trading partner for app developers and therefore app developers have no choice but to abide by Apple’s unfair terms, including the mandatory use of Apple’s own billing and payment system,” the CCI unit said in the June 24 report.
“From an app developer perspective, the Apple iOS ecosystem is indispensable.”
Apple and the CCI did not respond to requests for comment.
The Indian investigation report comes as Apple faces tougher anti-monopoly measures in other regions.
In June, European Union antitrust regulators said Apple had violated the bloc’s tech rules, potentially resulting in a hefty fine for the iPhone maker. The company also faces an investigation into new fees imposed on app developers.
In January, in response to a new EU law called the Digital Markets Act, Apple unveiled plans to allow software developers to distribute their apps outside Apple’s own App Store to users in the European Union.
The CCI report is the most crucial phase of India’s investigation and will now be reviewed by the watchdog’s top officials.
Apple and other parties will be given the opportunity to respond before a final decision is made. This could include fines and guidelines to change business practices.
Apple vs Google in India
The Indian case was first brought by a little-known nonprofit called “Together We Fight Society.” They argued that Apple’s in-app fees of up to 30% harm competition by raising costs for app developers and customers.
Later, a group of Indian startups, Alliance of Digital India Foundation and Tinder owner Match filed similar cases with the CCI against Apple. These cases were all heard together.
The CCI investigation team reported in its report that Apple did not authorize a third-party payment processor to provide in-app purchase services.
Also, in most cases, the apps are not allowed to contain external links that direct customers to other purchasing mechanisms, which is against Indian competition laws.
According to Counterpoint Research, of the 690 million smartphones in India, about 3.5% were running Apple’s iOS as of mid-2024, while the rest were running Android. However, the company admits that Apple’s smartphone base in the country has grown five-fold in the past five years.
In its submissions to the CCI, Apple argued that its market share in India is an “insignificant” 0-5%, while Google has 90-100%. The company also argued that its in-app payment system allowed it to maintain and develop the security of its App Store.
But the CCI said: “App stores are specific to a particular operating system and Apple’s App Store is the only App Store available for iOS users.”
“Apple’s payment policies negatively impact app developers, users, and other payment processors,” the report said.
The CCI report found that the company took into account comments from many companies, including Microsoft, Uber and Amazon, during its investigation into Apple.
Google also faced criticism from CCI for its in-app payment mechanism.
In October 2022, the CCI fined Google $113 million and said it must allow the use of third-party billing and stop forcing developers to use the in-app payment system. Google has appealed the decision.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
