Although Apple controls just 2 percent of the Indian smartphone market, the Competition Commission of India (CCI) ordered an investigation into the company’s business practices in the country. Specifically, the agency is probing Apple’s mandate that app developers use the company’s proprietary payment system for in-app purchases (IAPs).
The CCI ordered the Director-General to probe the matter within 60 days after it received a complaint filed by the non-profit Together We Fight Society based in the western state of Rajasthan.
The CCI says that the mandate to use Apple’s proprietary payment system “restrict[s] the choice available to the app developers to select a payment processing system of their choice especially considering when it charges a commission of up to 30% for app purchases and in-app purchases.” In its 20-page document ordering the investigation, the CCI wrote:
“At this stage, it appears that the lack of competitive constraint in the distribution of mobile apps is likely to affect the terms on which Apple provide access to its App Store to the app developers, including the commission rates and terms that thwart certain app developers from using other in-app payment systems.”
Apple urged the regulatory watchdog to dismiss the case filed by the non-profit, highlighting how it commands a trivial market share in India. However, the CCI picked the opposite tangent and opined that it could also be worth investigating if Apple collects and uses data from rival offerings to “improve its own services.”
India is the latest country to initiate a probe into Apple’s business model for IAPs. Earlier this year, Fortnite developer Epic Games dragged the iPhone maker to court for the same reason. After that, South Korea made it illegal for Google and Apple to earn a commission off IAPs by forcing app developers to use proprietary payment systems. Apple plans to comply by changing its App Store rules, so it makes a commission off IAPs, irrespective of the payment system customers use.
Do you think the CCI will cut Apple some slack given its meager market share in India? Tell us in the comments section below.[Via TechCrunch]