India's CCI says Apple misused its market dominant position – reports

India's trade practices watchdog, Competition Commission of India (CCI), has concluded that tech giant Apple abused its dominant market position regarding in-app purchases and commission rates, violating Indian competition laws, and negatively impacting app developers, according to media reports. The Indian regulator has now sought Apple's response on its report.

CCI initiated its scrutiny in this matter back in 2021 when Together We Fight Society, a non-profit organization, claimed that Apple's App Store policies were not conducive to competition. It said that high in-app fees, sometimes going as high as 30%, significantly increased the cost for developers, thus acting as a market-entry barrier for small business entities. High commission also hampered innovation. Once the initial investigations highlighted problematic practices, the CCI ordered a thorough investigation into the matter.

Now the regulator's director general (DG) has reportedly concluded that Apple did misuse its position as a market leader, which violates Section 4 of the competition law.

According to media reports, the CCI report says that Apple's App Store is an "unavoidable trading partner" for app developers who have little choice but to agree to the tech major's terms, including the mandatory use of Apple's billing and payment system.

More big tech scrutiny

The Times of India quoted unnamed sources who said "Apple imposes several onerous conditions via Developer Program License Agreement (DPLA) and Appstore review guidelines. The anti-steering provisions restrict the app developers from communicating alternative purchase methods within the app. Accordingly, no third-party payment processor is permitted to provide services for digital content on iOS devices."

In its order passed in December 2021, CCI said, "It has been inter alia submitted that Apple's App Store comes pre-installed in all iOS devices and other competing app stores are not allowed to be either pre-installed or downloaded. Thus, Apple's App Store is the only approved app store for iOS devices. App developers have no other alternative except Apple's App Store through which they can reach users of iOS. Thus, Apple is stated to have a monopoly in the iOS app distribution market."

Google has also faced a similar CCI investigation regarding its high commissions and mandatory use of its billing system. In 2022, CCI imposed a penalty of INR9.4 billion (US$111.53 million) on Google for taking advantage of its position as a market leader. Google challenged this decision at the National Company Law Appellate Tribunal (NCLAT) and the matter is yet to be decided.

CCI scrutiny of Apple’s in-app and App Store policies is crucial and can have significant consequences for Indian developers. Apple might have to rethink its policies if the CCI rules against the company. This may have a domino effect with other countries also demanding similar changes in fees and policies.