India’s Competition Commission (ICC) on Friday ordered a detailed investigation against tech giant Apple for alleged unfair business practices with its App Store.
Apple was alleged to use anti-competitive restraints and abuse dominant practices in the markets of delivering apps (apps) to users as well as processing payments for digital content used in iOS mobile apps.
The complaint was filed against Apple Inc and Apple India Pvt Ltd.
In a 20-page order, the watchdog said Apple’s App Store is the only channel for app developers to distribute their apps to consumers with iOS, which comes preinstalled on every iPhone and iPad.
In addition, third-party app stores are not permitted to be listed on Apple’s App Store, as the developer guidelines as well as the agreement prohibit app developers from offering such services … these restrictions imposed by Apple exclude the market from application stores for iOS for potential distributors of applications, ”the order said.
According to the CCI, this translates at first glance into a denial of market access for potential application distributors / developers of application stores, in violation of competition standards.
In addition, at first glance, such practices have the effect of limiting / restricting the technical or scientific development of services linked to the App Store for iOS, due to reduced pressure on Apple to innovate and constantly improve its own App. Store, which is also in violation of the competition rules. , says the order.
Citing these factors, the regulator ordered a detailed investigation by its managing director (CEO).
Apple did not respond to a query on the CCI probe.
In assessing the complaint, the ICC selected the “India iOS app store market” as relevant.
The watchdog said app developers seem to depend on the Apple App Store to reach app users, and app users also depend on the App Store to download apps.
“Thus, the Commission is of the prima facie view that Apple has a monopoly position in the relevant market for iOS app stores in India. This dependence on app developers appears to lead to acceptance of the mandatory rules. and non-negotiable from Apple, among other things relating to the distribution of applications via the App Store, by the latter, ”indicates the order.
Among other aspects, the watchdog observed that Apple conditions the provision of application distribution services on the acceptance by the application developer of additional obligations which, by their nature or according to commercial use, do not ‘have no connection with the subject of the contract for the supply of distribution services.
“This appears to be in violation of section 4 (2) (d) of the law. In addition, it also has the prima facie effect of exploiting by Apple its dominant position in the App Store market to enter / protect its in-app purchase market. payment processing market, in violation of article 4 (2) (e) of the law, ”the order states.
Section 4 (2) of the Competition Act deals with abuse of dominant position.
Regarding Apple’s claims that its market share was only 0 to 5%, the order stated that “the Commission is of the opinion that Apple’s approach is completely wrong because the alleged anti-competitive restrictions, in this case, were imposed on application developers in the form of App Store policies, by Apple.
In other words, the ICC noted that the allegation in this case concerns the abuse of dominance by Apple over application developers.
“Therefore, at this stage, it appears that the relevant market should be defined from the point of view of application developers and not from the point of view of end users,” the ordinance said.
Apple argued that the plaintiff was likely acting in concert with parties with whom Apple has ongoing commercial and contractual disputes globally and / or who have filed a complaint with other regulators.
Additionally, the company told the regulator it should be wary of attempts by people to use proxies as a front rather than come forward on their own behalf.
In this regard, CCI stated that under the current legislative framework, the informant has a limited role and proceedings before the Commission are purely guided by the merits of the case under the provisions of the Act. “The Commission would only intervene in a matter if it merited consideration under the relevant provisions of the Act”.
The complaint was lodged by the NGO Together We Fight Society.