Close on the heels of Competition Commission of India (CCI) sanctioning anti-competitive conduct of Google for its payment and billing policies on Play Store, Apple is likely to face antitrust heat for its similar policies on App Store, sources close to the development told businessline.
Investigation report in the App Store matter is likely to be submitted soon whereupon the same would be forwarded to the complainant and Apple for their response. A final ruling is expected from CCI after the hearing in the matter, they added.
Lack of quorum
Meanwhile, sources said that the lack of quorum at CCI does not affect the ongoing investigation by the DG against Apple. By the time the investigation report against Apple gets submitted over next two to three weeks, the CCI would have a new Chairperson, solving for the absence of quorum now, they added.
CCI had recently imposed a penalty of ₹936.44 crore on Google for abusing its dominant position with respect to its Play Store billing policies, apart from issuing a cease-and-desist order. Through its ruling issued on October 25, CCI directed Google not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play Store.
Similar allegations were levelled by an NGO Together We Fight Society against Apple for its payment and billing policies on App Store. Subsequently, Alliance of Digital India Foundation (ADIF) had also filed a similar case against Apple and this case was clubbed with ongoing investigation.
While ordering an investigation against Apple on December 31 last year, CCI observed that Apple’s App Store is the only means for app developers to distribute their apps to consumers using Apple smart mobile devices and thus, Apple was noted as a gateway between users and app developers.
In-app purchase system
Accordingly, CCI ordered an investigation against Apple for mandatory use of its proprietary in-app purchase system (IAP) for distribution of paid digital content which was prima facie noted by CCI as restricting the choice available to the app developers to select a payment processing system of their choice especially when Apple charges a commission of 30 per cent for app and in-app purchases.
Such conduct was also noted as amounting to tying of its in-app purchase payment processing service with App Store i.e., the app developers have to agree to the usage of Apple’s IAP payment processing service, if they want to distribute their apps to the iOS users through Apple’s App Store.
App Store is the only channel for app developers to distribute their apps to iOS consumers which is pre-installed on every iOS device and third-party app stores are not allowed to be listed on App Store. Such restrictions imposed by Apple foreclosed the market for app stores for iOS for potential app distributors, CCI noted while ordering probe.
A lawyer representing big tech companies before CCI on condition of anonymity told businessline that Apple is potentially facing huge monetary penalties as issue of mandatory use of in-house billing system has already been settled by CCI in Google matter. “It is an open and shut case now as the principle is already defined. It would be better for Apple to change its policy before final hearing as such voluntary remedy may be taken as mitigating factor by CCI. Otherwise, the penalties can be significant as CCI may consider revenue from Apple devices as well as App Store in calculating penalties. Apple is a sitting duck awaiting a whiff of antitrust shotgun “, added the expert.