CCI orders probe into Apple’s App Store business model
The Competition Commission of India (CCI) on Friday ordered an investigation into Apple’s business practices for suspected violation of several provisions of Section 26(1) of the Competition Act, 2002. The Commission has asked the Director General (DG) to investigate and submit a report within 60 days of receiving the order.
Plaint by NGO
The order came in response to a complaint filed by Rajasthan-based NGO Together We Fight Society in August, alleging that the tech giant has been misusing its dominant position by charging 30 per cent commission on in-app purchases and sale of digital goods and services via its App Store ecosystem. It also charged the company with employing anti-competitive practices.
Apple declined to comment when BusinessLine reached out.
The CCI order noted, “Apple has sought an opportunity for a preliminary conference hearing before the Commission prior to passing an order. However, the Commission, based on the information available on record (including the submissions made by Apple), is prima facie convinced that a case is made out for directing an investigation by the DG. Apple would be at liberty to make further submissions before the DG during the investigation wherein the same would be appropriately examined,” it added.
The DG will be able access both confidential and non-confidential submissions of Apple made earlier in response to the NGO’s allegations.
Restricting choice
The CCI is of the view that mandatory use of Apple’s IAP for paid apps and in-app purchases restrict the choice available to app developers to select a payment processing system, given the high commissions charged by Apple. It also noted that Apple’s proprietary apps are competing with third party apps on the iOS platform and the allegedly high fee would increase costs for the competitors in downstream markets across music and video streaming, e-books, etc.
The investigation would further check if Apple has access to the data collected from the users of its downstream competitors which would enable it to improve its own services, while the competitors may not have access to this information.
