EXCLUSIVELY Apple hit antitrust litigation in India over in-app fee points

  • Apple is facing a similar case as in the European Union
  • Non-profit group says Apple is anti-competitive in India
  • Apple imposes a 30% in-app fee, which hampers submission by app developers
  • India Watchdog examines case and decides next steps – Quelle

NEW DELHI, Sep 2 (Reuters) – Apple Inc (AAPL.O) faces an antitrust challenge in India for allegedly abusing its dominant position in the app market by forcing developers to use their proprietary in-app Purchase system, according to a source and documents viewed by Reuters.

The allegations are similar to a case Apple is facing in the European Union, where regulators opened an investigation last year into Apple charging a 30% in-app fee for the distribution of paid digital content and other restrictions .

The Indian case was filed by a little-known nonprofit group that argues that Apple’s up to 30% fee harms competition by increasing costs for app developers and customers while also creating a barrier to entry.

“The existence of the 30% commission means that some app developers will never make it to market … This could also lead to consumer harm,” said the filing that Reuters saw.

Unlike Indian legal proceedings, filings and details of the cases examined by the Competition Commission of India (CCI) are not made public. Apple and the Chamber of Industry and Commerce did not respond to a request for comment.

In the coming weeks, the CCI will be reviewing the case and could instruct its investigative arm to conduct a fuller investigation or shut it down altogether if it doesn’t find legitimacy in it, said a source familiar with the matter.

“The likelihood that an investigation can be ordered is high, also because the EU is investigating it,” said the person who refused to identify as the case details are not public.

The complainant, the non-profit “Together We Fight Society”, which is based in the western Indian state of Rajasthan, told Reuters in a statement that it had brought the case in the interests of protecting Indian consumers and startups.

In India, although Apple’s iOS only powered around 2% of 520 million smartphones by the end of 2020 – the rest on Android – according to Counterpoint Research, the US company’s smartphone base in the country has more than doubled in the past five years.

The Apple case in India is just coming as the South Korean parliament passed a bill this week banning major app store operators like Google and Apple from Alphabet Inc (DemokratieL.O) from forcing software developers to use their payment systems.

A seller walks past an ad at an Apple reseller store in Mumbai, India on Sept. 1, 2021. REUTERS / Francis Mascarenhas

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“MIDDLE MAN IN TRANSACTIONS”

Companies like Apple and Google say their fee covers the security and marketing benefits of their app stores, but many companies disagree.

After Indian startups publicly raised concerns last year about a similar fee for Google’s in-app payments, the CCI ordered an investigation as part of a broader antitrust investigation into the company. This investigation is ongoing.

The Indian antitrust case against Apple also alleges that its restrictions on the way developers communicate with users to provide payment solutions are anti-competitive and also harm the country’s payment processors by offering services at lower fees ranging from 1% to 5% to offer.

Apple has harmed competitors by preventing developers from informing users of alternative purchase options, thereby “affecting the relationship between app developers and their customers by inserting itself as the middleman in every in-app transaction,” added the submission.

In the past few weeks, Apple has eased some of the restrictions on developers around the world, such as:

And on Wednesday it said it would allow some apps to provide customers with an in-app link to bypass Apple’s purchasing system, although the US company maintained a ban on allowing other payment options in apps.

Gautam Shahi, an antitrust partner with Indian law firm Dua Associates, said that even when companies change their behavior after filing an antitrust case, the CCI still pays attention to past behavior.

“The Chamber of Industry and Commerce will examine in recent years whether the law has been violated and whether consumers and competition have been harmed,” said Shahi.

The CCI plans to speed up all cases involving big tech companies like Amazon (AMZN.O) and Google by sending additional officials and meeting stricter internal deadlines, Reuters reported in June.

Reporting from Aditya Kalra in New Delhi; Additional coverage from Stephen Nellis in San Francisco; Adaptation by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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