Apple engaged “in abusive conduct and practices” to take advantage of its dominating position in the app stores market for its iOS operating system, according to an investigation by India’s antitrust body. A confidential research obtained by Reuters revealed the information. Since 2021, Apple Inc. (AAPL.O) has been under investigation by the Competition Commission of India (CCI) for potentially abusing its dominating position in the app market by pressuring developers to use its exclusive in-app purchase mechanism. Apple has refuted any wrongdoing, claiming to be a minor participant in India, where Android-powered phones predominate.
Apple has “significant influence” over how digital goods and services reach customers, particularly through its iOS platform and App Store, according to a 142-page assessment from the CCI’s investigations branch that was obtained by Reuters but has not yet been published. The CCI unit on the 24th of June stated, “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. From the perspective of app developers, the Apple iOS ecosystem is indispensable.”
The probe report from India coincides with growing antitrust scrutiny for Apple in other nations. The technology giant could be subjected to a major penalty after European Union antitrust regulators declared in June that the iPhone maker had breached the bloc’s tech regulations. An inquiry into the company’s new app developer fees is also underway. Apple announced intentions to enable software developers to distribute their programs to users in the European Union through channels other than Apple’s App Store in January, in response to a new regulation known as the Digital Markets Act.
The CCI report, the most important stage of the Indian probe, is about to be examined by senior officials of the watchdog. Prior to a final ruling, which might involve both financial penalties and orders to alter corporate procedures, Apple and other parties will have the opportunity to submit their reply.
A little-known non-profit organization named “Together We Fight Society” initially brought the Indian lawsuit, charging that Apple’s up to 30% in-app fee damages competition by driving up costs for both app developers and users. Subsequently, a collection of Indian entrepreneurs, including Match (MTCH.O), the owner of Tinder and the Alliance of Digital India Foundation, brought similar petitions against Apple before the CCI, which were being heard concurrently. According to the CCI inquiry team’s report, Apple has not given any permission for any third-party payment processor to offer in-app purchase services.
It further stated that, in the majority of instances, the apps are prohibited from having any external links that send users to other payment platforms, in violation of Indian competition regulations. As of mid-2024, about 3.5% of India’s 690 million smartphones ran on Apple’s iOS operating system and the remainder, according to Counterpoint Research, employed Android. However, the company notes that Apple’s smartphone base in the nation had grown five times over the previous five years. Apple argued in its CCI submissions that Google has a 90–100% market share in India, compared to its “insignificant” 0-5% share. Additionally, the business claimed it was able to grow and preserve the security of its App Store owing to the in-app payment method.
“App stores are OS (operating system) specific and Apple’s App store is the sole App store available for reaching iOS users. The payment policy of Apple adversely affects the app developers, users and other payment processors,” CCI pointed out. The CCI report disclosed that throughout its probe of Apple, it took into account feedback from other businesses, including Microsoft, Uber, and Amazon. Google has also been under fire from CCI for its in-app purchasing system. Google was fined $113 million by the CCI in October 2022 and ordered to stop pressuring developers to utilize its in-app payment mechanism and permit third-party billing. Google has contested the verdict.
