Apple is facing an antitrust challenge in India for allegedly forcing developers to use its proprietary in-app purchase system.
The allegations are similar to a case Apple faces in the European Union, where regulators last year started an investigation into Apple’s imposition of an in-app fee of 30% for distribution of paid digital content and other restrictions.
The Indian case, according to documents seen by Reuters, was filed by a little-known, non-profit group which argues that Apple’s fee of up to 30% hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.
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“The existence of the 30% commission means that some app developers will never make it to the market … This could also result in consumer harm,” the filing said.
Unlike Indian court cases, filings and details of cases reviewed by the Competition Commission of India (CCI) are not made public.
The complainant, the non-profit Together We Fight Society, which is based in India’s western state of Rajasthan, said it filed the case in the interest of protecting Indian consumers and start-ups.
In India, though Apple’s iOS only powered about 2% of its 520 million smartphones by the end of 2020, Counterpoint Research says the US firm’s smartphone base in the country has more than doubled in the last five years.
PAYMENT SYSTEMS
The Apple case in India comes just as South Korea’s parliament this week approved a bill that bans major app store operators like Google and Apple from forcing software developers to use their payment systems.
Companies like Apple and Google say their fee covers the security and marketing benefits their app stores provide, but many companies disagree.
Last year, after Indian startups publicly voiced concern over a similar in-app payments fee charged by Google, the CCI ordered an investigation as part of a broader antitrust probe into the company. That investigation is ongoing.
BAN RETAINED
The India antitrust case against Apple also alleges that its restrictions on how developers communicate with users to offer payment solutions are anti-competitive, and also hurt the country’s payment processors who offer services at lower charges in the range of 1-5%.
In recent weeks, Apple has loosened some of its restrictions on developers globally, like allowing them to use communications – such as email – to share information about payment alternatives outside of their iOS app.
And on Wednesday, it said it would allow some apps to provide customers with an in-app link to bypass Apple’s purchase system.
- Reuters and Sean O’Meara
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