The India Competition Commission (CCI) has formally requested an investigation into Apple’s App Store payment method, commissions, and other issues following a complaint filed by a consumer organization in September.
Apple has less than 2% of the smartphone market in India. This does not prevent the authorities from requesting a probe into Apple’s business practices, including the company’s requirement that iPhone software developers utilize a proprietary payment mechanism. On Friday, the commission issued an order formally initiating the probe requested in September.
The Competition Commission of India, which ordered the Director-General to complete the investigation within 60 days, stated that the mandatory use of Apple’s in-app payments system for paid apps and in-app purchases “restrict[s] the choice available to app developers to select a payment processing system of their choice, especially when it charges a commission of up to 30% for app purchases and in-app purchases.”
Following a complaint by Together, We Fight Society, a non-profit headquartered in Rajasthan, India’s western state, the watchdog began investigating the matter. According to the group, Apple’s decision, which forbids app developers from using a third party or their payment system, has a major impact on their earnings. Shivani Dharnia, the group’s founder, stated in an interview with Indian media in September that the group had four primary concerns that needed to be addressed.
Aside from the 30% commission, Apple’s App Store removal of apps, App Store suspension reform, and App Store review standards where Apple is “not only the player” but “also the umpire” are all things to look forward to. Dharnia also claims to have a “watertight case” against two other major digital companies, but the accusations have yet to be made public. It has previously filed a lawsuit against a reverse osmosis installation company, which is currently being investigated.
The investigation could go beyond app payments. The investigative order also inquires whether Apple exploits information gathered from potential competitors to improve its services. It needs to be clarified how the commission will investigate this. The commission also stated that it would investigate the need for consumer-friendly third-party payment methods. “At this stage, it appears that the lack of competitive constraint in the distribution of mobile apps is likely to affect the terms on which Apple provides access to its App Store to app developers, including commission rates and terms that prevent certain app developers from using other in-app payment systems,” according to the complaint.
In India, Apple has very little market share. It accounted for around 2% of India’s half-billion cell phones by the end of 2020. Estimates for 2021 are not yet available, although the share increased from 1% to 2% in five years.
The European Union’s ongoing inquiry into Apple’s App Store payment requirements is comparable to the most recent international antitrust assessment of Apple’s App Store payment requirements. It also comes after a vote in South Korea that requires Apple and Google to enable alternatives if they want to operate in the country.
South Korea passed legislation earlier this year making it unlawful for Apple and Google to gain money by forcing developers to use their proprietary payment systems. Epic Games challenged Google and Apple in the United States by implementing its payment mechanism in the sleeper smash game Fortnite. It is now embroiled in legal wranglings with Google and Apple. Attorneys general from 36 states launched an antitrust complaint against Google this year, arguing that the Play app store constitutes a monopoly. This year, a bipartisan bill filed in the US Senate aims to limit how the Apple and Google app stores work and the limitations that can be imposed on app creators.
Last year, the European Union introduced the Digital Markets Act to prevent technology platforms from abusing their position as gatekeepers. “At this time, it appears that the lack of competitive constraint in the distribution of mobile apps is likely to affect the terms on which Apple provides app developers access to its App Store, including commission rates and from using other in-app payment systems,” the CCI wrote in a 20-page order on Friday.
According to the CCI, it is worth investigating whether Apple exploits data gathered from competitors’ users to “enhance its services.” Recall that Apple urged India’s antitrust authorities earlier this month to dismiss a complaint alleging market power abuse in the apps industry, claiming that it is too minor a participant in the South Asian country where Google dominates.
After the Competition Commission of India (CCI) began investigating charges that Apple harms competition by requiring app developers to utilize its proprietary system, which can charge commissions of up to 30% on in-app purchases, the filling was made. Apple refuted the charges in its filing to the CCI and stated that its market share in India is “insignificant” at 0-5%. However, Google controls 90-100% of the market because its Android operating system runs most other handsets.
“Apple is not the market leader in India… “Without dominance, there can be no abuse,” Apple stated in a November 16 filing signed by Kyle Andeer, its Chief Compliance Officer. It said, “It has already been established that Google is the dominating player in India.”