Apple. File. | Photo Credit: AP
An investigation by India’s antitrust body found that Apple exploited its dominant position in the market for the app store on the iOS operating system, engaging in “abusive acts and practices,” a confidential report showed Reuters.
The Competition Commission of India (CCI) has been investigating Apple Inc since 2021 for possibly abusing its dominant position in the app market by forcing developers to use the in-app purchase system.
Apple has denied wrongdoing saying it is a small player in India where phones using Google’s Android system are dominant.
The CCI investigation unit, in a 142-page report that is not public but seen by Reuterssaid Apple has “significant influence” on how digital products and services reach consumers, particularly through the 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 comply with Apple’s unfair terms, including the mandatory use of Apple’s billing and payment system,” the CCI unit said on June 24. report.
“From an app developer’s perspective, the Apple iOS ecosystem is really important.”
Apple and CCI did not respond to requests for comment.
The report of the Indian investigation comes as Apple faces antitrust scrutiny in other regions.
In June, the European Union’s antitrust regulator said Apple violated the technology block’s rules, which could lead to hefty fines for the iPhone maker. The company is also facing an investigation into new fees imposed on app developers.
In January, in response to a new EU law called the Digital Markets Act, Apple limited plans to allow software developers to distribute apps to users in the European Union outside of Apple’s own App Store.
The CCI report is the most critical stage of India’s investigation and will now be reviewed by senior watchdog officials.
Apple and other parties will be allowed to respond before a final decision is made, which could include monetary fines as well as directives to change business practices.
APPLE VS GOOGLE IN INDIA
The first Indian case was filed by an anonymous non-profit group called “Together We Fight Society” which argued that Apple’s in-app fees of up to 30% hurt competition by increasing costs for app developers and customers.
Later, a group of Indian startups, the Alliance of Digital India Foundation, and Tinder-owner Match filed a similar case at the CCI against Apple, all of which were heard together.
CCI’s investigative team said in its report that there are no third-party payment processors authorized by Apple to provide services for in-app purchases.
He added that in many cases, the app is also not allowed to contain external links that direct customers to other purchase mechanisms, in violation of India’s competition laws.
Apple iOS powered about 3.5% of the 690 million Smartphones in India by the middle of 2024, with the rest using Android, according to Counterpoint Research, although it increases Apple’s smartphone base in the country has become five times larger in the last five years.
In its submission to CCI, Apple said its market share in India is an “insignificant” 0-5%, while Google commands 90-100%. The company also emphasized that the in-app payment system allows to maintain and improve the security of the App Store.
But CCI said, “OS (operating system) specific App stores and Apple App stores are the only App stores available to reach iOS users.”
“Apple’s payment policies affect app developers, users and other payment processors,” he said.
The CCI report shows that comments from many companies including Microsoft, Uber and Amazon during the Apple investigation.
Google has also faced CCI heat for its in-app payment mechanism.
In October 2022, the CCI imposed a $113 million fine on Google and said it should allow the use of third-party billing and stop forcing developers to use in-app payment systems. Google has challenged the decision.