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India antitrust watchdog orders investigation into Apple’s business practices

The Indian antitrust watchdog on Friday ordered an investigation into Apple’s business practices — in particular, the company mandating iPhone app developers to use a proprietary payments system — in India, where the American firm commands less than 2% of the smartphone market.

The Competition Commission of India, which ordered the Director General to conduct the probe within 60 days, said 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.”

The watchdog began reviewing the case after a complaint filed by Together We Fight Society, a non-profit based in India’s western state of Rajasthan. The organization said Apple’s move, which prevents app developers from using a third-party or their own payments system, makes a significant dent in the revenues they generate.

Apple had urged the CCI to dismiss the case, saying it was too small a player in India.

India is the latest nation to express concerns over Apple and Google requiring app developers to use the firm’s payments system for in-app purchases. (The Indian watchdog opened the investigation into Google’s business practices last year.) Earlier this year, South Korea approved a measure that makes it illegal for Apple and Google to make a commission by forcing developers to use their proprietary payments systems.

In the U.S., Fortnite-maker gaming firm Epic publicly challenged Google and Apple by introducing its own payments system in the sleeper hit title. Now it’s locked in legal battles with Google and Apple. This year, attorneys general from 36 U.S. states filed an antitrust lawsuit against Google alleging its Google Play app store is an illegal monopoly. A bipartisan bill introduced this year in the U.S. Senate seeks to restrict how the Apple and Google app stores operate and what rules can be imposed on app developers.

The European Union last year proposed the Digital Markets Act, which is meant to prevent technology platforms from abusing their gatekeeper position.

“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 wrote Friday in a 20-page order.

The CCI said it is also worth probing whether Apple uses data it collects from the users of its competitors to “improve its own services.”

Despite a considerable uptick in iPhone sales in India in recent years, Apple is still a small player in the market. Google’s Android commands a marketshare that swings between 98 to 99% each year.

We have reached out to Apple for comment.

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