India Regulator Finds Apple App Store Breaches Competition Law

India’s antitrust regulator has found Apple in breach of Indian law over forcing developers to use its in-app purchase system, for which they are charged an average commission of 30 percent, Reuters reported.

Apple abused its dominant position in the market for app stores on its iOS operating system and engaged “in abusive conduct and practices”, a confidential Competition Commission of India (CCI) report found.

The 142-page report says Apple wields “significant influence” over how digital products and services reach consumers, especially through iOS and the App Store.

“Apple App Store is an unavoidable trading partner for app developers, and resultantly, app developers have no choice but to adhere to Apple’s unfair terms, including the mandatory use of Apple’s proprietary billing and payment system,” says the 24 June report.

“From the perspective of app developers, Apple iOS ecosystem is indispensable.”

Third-party payments

The CCI has been investigating Apple since 2021 over the App Store payment system after a filing by a non-profit called “Together We Fight Society” which argued the 30 percent commission harmed competition and raised costs for consumers and developers.

The Alliance of Digital India Foundation, a group of Indian start-ups, and Tinder owner Match later filed similar cases which were all heard together by the CCI.

The agency’s investigators said no third-party payment processor was allowed to provide services for in-app purchases and that in most cases apps are not allowed to provide external links to outside purchasing mechanisms, violating Indian competition law.

“App stores are OS (operating system) specific and Apple’s App store is the sole App store available for reaching iOS users,” the CCI said.

“The payment policy of Apple adversely affects the app developers, users and other payment processors.”

App store challenge

Investigators considered comments from Microsoft, Uber, Amazon and others during the probe, the report indicates.

Apple has denied wrongdoing and argued in its submissions to th CCI that it has an “insignificant” market share of 0 to 5 percent in India, where Google’s Android powers 90 to 100 percent of smartphones.

The company argued the in-app payment system allowed it to maintain and develop the safety of the App Store.

Apple is facing similar challenges to its App Store and other mobile platform policies in the EU.

In October 2022 the CCI fined Google $113 million (£87m) over breaching competition law and said it must allow third-party in-app billing. Google is appealing the decision.