CCI stated that application developers seem to be determined by Apple’s Application Store to achieve users.
The Competition Commission of India (CCI) on Friday launched an investigation against the tech giant Apple for allegations of unjust business practices in relation to the App Store.
It was claimed that Apple has a history of infringement on the competition. The use to monopolize practices the distribution of its applications (apps) to provide users with apps and the processing payments for digital content used in iOS mobile applications.
The complaint was brought by Apple Inc and Apple India Pvt Ltd.
In a 20-page document, the watchdog claimed that the Apple App Store provides the sole platform app developers can use to distribute the apps they develop to iOS users. It is installed on each iPhone or iPad.
“Further, 3rd party application stores aren’t permitted to become available for auction on Apple’s Application Store because the developer guidelines in addition to the agreement stop application developers from offering such services… these limitations enforced by Apple foreclose the marketplace for application stores for iOS for potential application distributors,” an order stated.
As per the CCI, it is a prima facie violation that results in a lack of market access for potential app distributors/app store developers in breach of competition norms.
Additionally, such practices are likely to limit or restrict the scientific or technical development of services that are part of the apps for iOS as a result of the reduced pressure placed on Apple to constantly create and enhance their store, which is in direct violation of competition laws according to the order.
In light of these reasons, the regulator has issued a thorough investigation through the Director General (DG).
Apple did not respond to a question regarding the CCI probe.
To evaluate the complaint, the CCI has deemed as its source the “market for app stores for iOS in India” as the appropriate one.
The watchdog stated that the application developers seem to be determined by Apple’s Application Store to achieve the application users. The Application Store will also select application users to download apps.
“Thus, it is clear that the Commission is in the first instance of believing that Apple is the sole player on the market that is relevant to apps for iOS within India.This dependence from the application developers seems to lead to acceptance of Apple’s mandatory and non-negotiable rules among other things associated with the distribution of apps through Application Store, through the latter,” an order stated.
In addition, The watchdog also observed that Apple requires the delivery of distribution services to apps on app developers accepting additional obligations that, in their nature or accordance with commercial practice, have no connection to the subject of the contract for providing distribution services.
“This seems to stay in breach of Section 4(2)(d) from the Act. Further, additionally, it prima facie leads to the leveraging by Apple of their dominant position in Application Store sell to enter/safeguard its marketplace for in-application purchase payment processing market, in breach of Section 4(2)(e) from the Act,” an order stated.
Section 4(2) from the Competition Act relates to abuse of dominant positions.
Concerning Apple’s claims that it holds an estimated market share of just 0-5 percent just, the order stated that it was the “Commission is of the view that the approach of Apple is misdirected because the alleged anti-competitive limitations, in our matter, happen to be enforced around the application developers utilizing Application Store policies, by Apple.”
Quite simply, the CCI said that the accusation in the case is related to a monopoly abuse by Apple about app developers.
“Therefore, at this time, it seems the relevant market needs to be defined in the outlook during the application developers and never in the outlook during finish users,” an order stated.
Apple has argued that the complainant is working in concert with other parties with whom Apple is in ongoing commercial or contract disputes worldwide and has made complaints to regulators in other countries.
Additionally, the company advised the regulator it must be cautious of people who use proxy companies as a cover for acting under their names.
In connection with this, CCI stated that the informant includes a limited role as reported by the extant statutory framework. The proceedings before the Commission are purely led through the merits of the matter regarding the provisions from the Act. “The Commission would intervene in almost any matter only when the same merits consideration underneath the relevant provisions from the Act.”
The problem was submitted by the NGO Together We Battle Society.