The Competition Commission of India (CCI), an India antitrust body has discovered that Apple exploits its dominance in the market for app stores on its iOS operating system, engaging in abusive conduct, according to a confidential report seen by Reuters. The investigation, which began in 2021, focuses on allegations that Apple abused its dominance by forcing app developers to use its proprietary in-app purchase system.
Apple denies any misconduct, arguing that it is a minor player in India where Google’s Android system is dominant. However, the CCI’s investigations unit, in its 142-page report dated June 24, confirms that Apple exerts signicant advantage over how digital products and services reach consumers via its iOS platform and App Store. The report further states that for app developers, the Apple App Store is an “unavoidable trading partner,” compelling them to comply with Apple’s “unfair terms,” such as the mandatory use of Apple’s billing and payment system.
The CCI’s findings presents a critical stage in the investigation, which will now be reviewed by senior officials within the watchdog. Apple and other parties will have the opportunity to respond before a final decision is made, which could include monetary fines and directives to change business practices. The report comes as Apple faces increased antitrust scrutiny in other regions. In June, European Union regulators accused Apple of breaching tech rules, which could lead to significant fines. Additionally, Apple is under investigation for imposing new fees on app developers. In response to the EU’s Digital Markets Act, Apple has announced plans to allow software developers to distribute apps outside of its App Store within the EU.
The Indian case against Apple was initiated by “Together We Fight Society,” a non-profit group that argued Apple’s in-app fee of up to 30% harms competition by increasing costs for developers and consumers. This case was later supported by the Alliance of Digital India Foundation and Tinder-owner Match, who filed similar complaints. The CCI’s investigation revealed that Apple does not allow third-party payment processors for in-app purchases and generally prohibits apps from including external links to alternative purchasing mechanisms, actions deemed to violate Indian competition laws.
Despite Apple’s assertions that its market share in India is a negligible 0-5% compared to Google’s 90-100%, the CCI report emphasizes that app stores are specific to operating systems, and Apple’s App Store is the sole platform available for iOS users. The report concludes that Apple’s payment policies negatively impact app developers, users, and other payment processors. Comments from various companies, including Microsoft, Uber, and Amazon, were considered during the investigation.
Apple’s iOS powers about 3.5% of the 690 million smartphones users in India as of mid-2024, according to Counterpoint Research, though Apple’s smartphone base in the country has grown fivefold in the last five years. The CCI’s findings align with earlier actions taken against Google, which faced a $113 million fine in October 2022 for its in-app payment practices and was ordered to allow third-party billing options. Google has since challenged this decision.
As the CCI continues with its review, the outcome of this investigation could have significant implications for Apple’s business practices in India and certainly set a precedent on how digital marketplaces are regulated in the country.
