August 9, 2022
Apple faces CCI antitrust investigation over alleged abuse of App Market

The Competition Commission of India (CCI) on Friday ordered a detailed investigation against technology major Apple for alleged unfair business practices regarding its App Store.

It was alleged that Apple abuses dominant practices in anti-competitive restrictions and markets in the distribution of applications (apps) to users, as well as in the processing of payments for digital content used within iOS mobile apps.

A complaint was filed against Apple Inc and Apple India Pvt Ltd.

Apple’s App Store is the only channel for app developers to distribute their apps to iOS consumers pre-installed on every iPhone and iPad, the watchdog said in a 20-page order.

“In addition, third-party app stores are not permitted to be listed on Apple’s App Store because developer guidelines as well as agreements prohibit app developers from offering such services … potentially shutting down the App Store market for app distributors,” the order said.

According to CCI, it prima facie denies market access to potential app distributors/App Store developers in violation of competition norms.

In addition, such practices result in limiting/restricting technical or scientific development of App Store-related services for iOS, as there is less pressure on Apple to continually innovate and improve its App Store, which There is also a violation of the rules of competition. , said the order.

Citing these factors, the regulator has ordered a detailed inquiry by its Director General (DG).

Apple did not respond to a query on the CCI investigation.

To assess the complaint, the CCI considered the “market for the App Store for iOS in India” relevant.

The watchdog said app developers rely on Apple’s App Store to reach app users and that app users also rely on the App Store to download apps.

“Thus, the Commission is of the prima facie view that Apple holds a monopoly position in the relevant market for the App Store for iOS in India. This reliance on app developers results in the acceptance of Apple’s mandatory and non-negotiable rules. relating to distribution of apps through the App Store, subsequently,” the order said.

Among other aspects, the watchdog observed that Apple accepts supplementary obligations on the app developer to the provision of app delivery services, which by their nature or pursuant to commercial use, have no relation to the subject of the contract for the provision of delivery services.

“This appears to be a violation of section 4(2)(d) of the Act. Further, it prima facie resulted from Apple taking advantage of its dominant position in the App Store market to access/protect its market for in-app purchases.” Payment Processing Markets, in contravention of section 4(2)(e) of the Act,” the order said.

Section 4(2) of the Competition Act deals with abuse of dominant position.

Regarding Apple’s claim that it has a market share of only 0-5 per cent, the order said, “The Commission is of the view that Apple’s view is wholly incorrect as the alleged anti-competitive sanctions have been imposed in the present case.” are imposed on app developers by Apple as App Store policies”.

In other words, the CCI said that the allegation in the present case pertains to abuse of dominance by Apple with respect to app developers.

“Therefore, at this stage, it appears that the relevant market is to be defined from the perspective of app developers and not from the point of view of end users,” the order said.

Apple has argued that the complainant is potentially working closely with parties with whom Apple has commercial and contractual disputes on a global scale and/or who have complained to other regulators.

Further, the company told the regulator that it should be wary of attempts by those who use proxy parties as a front, instead of coming forward in their own name.

In this regard, the CCI said that as per the existing statutory framework, the informant has a limited role and the proceedings before the Commission are entirely guided by the merits of the case in terms of the provisions of the Act. “The Commission shall intervene in any matter only if it is fit for consideration under the relevant provisions of the Act”.

The complaint was lodged by the NGO Together We Fight Society.

Leave a Reply

Your email address will not be published.