CCI probe alleges Apple exploited its dominant position in the app store market

The CCI has been investigating Apple Inc. since 2021 for potentially abusing its dominant position in the apps market by requiring developers to use its proprietary in-app purchase system, according to the report.

Apple has denied any wrongdoing, claiming it is a minor player in India where Google's Android system predominates.

The CCI's investigations unit, in its 142-page report, which is not public but was reviewed by Reuters, stated that Apple exerts "significant influence" over how digital products and services are accessed by consumers, particularly through its iOS platform and 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," the CCI unit said in the June 24 report, according to Reuters.

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

Apple and the CCI did not respond to requests for comment. The CCI report represents the most critical stage of the Indian investigation and will now be reviewed by the watchdog's senior officials.

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 CCI investigation team noted in its report that Apple does not permit third-party payment processors for in-app purchases.

Further, most apps are not allowed to include external links directing customers to alternative purchasing mechanisms, which the report says violates Indian competition laws.

As of mid-2024, Apple's iOS powered about 3.5% of the 690 million smartphones in India, with the majority using Android, according to Counterpoint Research. However, Apple's smartphone base in India has grown fivefold in the last five years.

In its submissions to the CCI, Apple argued that its market share in India is an "insignificant" 0-5%, compared to Google's 90-100%.

The company also claimed that its in-app payment system is essential for maintaining and developing the security of its App Store.

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

"The payment policy of Apple adversely affects the app developers, users and other payment processors," it said.

The CCI report indicated that it took into account comments from various companies, including Microsoft, Uber, and Amazon, during its investigation of Apple.