Indian antitrust regulator finds Apple's App Store abuses market power
Latest in a line of global antitrust regulation against Apple
Apple faces another regulatory hurdle, this time in India as the country's antitrust body, the Competition Commission of India (CCI), finds the tech giant abused its dominant position in the app store market.
This comes after a comprehensive investigation triggered by complaints from developers and non-profit groups.
A confidential 142-page report, seen by Reuters, details the CCI's findings. The report highlights Apple's "significant influence" over digital goods and services due to its control over the iOS App Store.
The crux of the issue lies in Apple's mandatory use of its proprietary in-app purchase system, forcing developers to pay a commission of up to 30% on all transactions. The CCI deems this practice unfair and anti-competitive.
"Apple App Store is an unavoidable trading partner for app developers, and resultantly, app developers have no choice but to adhere to Apple's unfair terms, including the mandatory use of Apple's proprietary billing and payment system," the CCI unit said in its report, according to Reuters.
"From the perspective of app developers, Apple iOS ecosystem is indispensable."
This sentiment aligns with the arguments presented by the initial complainant, "Together We Fight Society," which claimed Apple's fees inflate costs for both developers and consumers.
The investigation also found Apple restricts the use of third-party payment processors and prohibits developers from including links directing users to alternative purchasing methods within their apps. These practices, according to the CCI, violate Indian competition laws.
However, Apple downplayed the accusations. The company argues its market share in India is minuscule compared to Google's Android dominance and that its in-app purchase system ensures a secure App Store environment.
The CCI report marks a critical stage in the Indian investigation. The findings will now be reviewed by senior officials, with Apple and other stakeholders allowed to respond before a final decision. That decision could include hefty fines or directives forcing Apple to change its business practices in India.
Interestingly, Google faced a similar CCI probe for its in-app payment practices, resulting in a $113 million fine and a mandate to allow third-party billing options. Google has challenged this decision.
While India's smartphone market is largely Android-driven, Apple's user base within the country has grown significantly in recent years. This growth, coupled with the CCI's findings, could force Apple to adapt its App Store policies in the Indian market.
For Apple, this is is the latest in a long line of antitrust accusations. In March, the European Commission fined Apple €1.84 billion (roughly £1.5 billion, or $1.95 billion) for violating EU antitrust rules by abusing its dominant position in the app store market.
"For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store," said Margrethe Vestager, executive vice-president in charge of competition policy at the Commission.
"They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem."
Apple denied the allegations, and said it planned to appeal.
Earlier this year, Apple said it was opposed to the introduction of ex-ante regulations in India within the framework of the proposed Digital Competition Bill. The company said in its submission to the Committee on Digital Competition Law (CDCL), that it "prefers a regulatory framework that fosters innovation" rather than imposing stringent pre-emptive measures.