CCI orders probe into Apple’s business practices in India

India’s anti-trust watchdog, the Competition Commission of India (CCI), has ordered an investigation into Apple’s business practices in the country, saying it is of the view that the iPhone-maker had violated anti-trust laws.

It has taken issue with the company mandating iPhone app developers to use a proprietary payments system in India.

“The commission at this stage is convinced that a prima facie case is made out against Apple which merits investigation,” it said, according to a Reuters report.

The CCI has told the Director General to conduct the probe within 60 days, and said that it is of the prima facie view that the mandatory use of Apple’s in-app payments system for paid apps and in-app purchases “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”.

CCI took up the case after a complaint filed by non-profit Together We Fight Society argued that Apple’s imposition of a 30 per cent in-app fee for distribution of paid digital content and other restrictions hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.

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Apple, which commands less than 2 per cent of the smartphone market in India, had denied the allegations last month and urged the CCI to dismiss the case, saying it was too small a player in the country.

But the CCI wrote in a 20-page order on Friday: “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(s) 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.”

The CCI, Reuters reported, also said in the order that Apple’s argument on its market share was “misdirected” as the allegations were about anti-competitive restrictions on app developers and not end-users.

The Indian watchdog is also conducting an investigation into Google’s in-app payment system as part of a broader probe into the company after Indian start-ups last year voiced concern.