India competition regulator commands review against Apple for commission on in-app expenses

India competition regulator commands review against Apple for commission on in-app expenses

According to the Competition Commission of India (CCI), Apple's App Store commission policies are anti-competitive. The CCI ordered a detailed investigation on Friday. After a non-governmental organization, Together We Fight Society, filed a complaint alleging abuse of Apple's dominant position in the market, it was ruled that Apple had violated Section 4 of the Competition Act, 2002.

App developers are only permitted to submit their apps to Apple's App Store if they wish to distribute them to iPhone and iPad users. Customers cannot download applications from other app stores. As both app developers and users rely on the App Store, the CCI concluded that "Apple occupies a dominant position in India's app store market."

Consequently, app developers must accept Apple's minimum and non-negotiable requirements for the distribution of apps through the App Store.

Furthermore, Apple mandates the use of its proprietary in-app purchase system (IAP) for the distribution of paid content, according to the CCI. The company also charges apps developers up to 30 percent commission on purchases made through their platform. App developers are unable to choose a payment mechanism of their choice if Apple mandates that Apple's IAP is used for in-app purchases, according to the CCI. App Store serves as the only way for iOS smartphones and tablets to download apps, which means Apple controls a large share of market payments and can leverage its position to advance its own interests.

The CCI also emphasized that third-party apps on the iOS platform are also in competition with Apple's proprietary apps. It is possible that Apple's policies will increase the cost of its competitors' apps, which may affect their competitiveness as compared to Apple's own. As a result, Apple's competitors could have a drawback in downstream markets like music streaming, video streaming and e-books. Apple may also make improvements to its services if it accesses the data collected from its competitors in the downstream market. This gives Apple a significant advantage over competitors who do not have access to such data.

Accordingly, the CCI determined that Apple violated Section 4 of the Competition Act, which mandates a thorough investigation. A report should be produced within 60 days by the Director-General after an investigation has been completed.

Apple was ordered last week to change its policies regarding in-app payments by the Netherlands Authority for Consumers and Markets. Other jurisdictions have also expressed opposition to Apple's commission policies, including the United States, South Korea and the European Union.