3 min read.Updated: 19 Dec 2021, 07:33 PM ISTShouvik Das
The iPhone maker said that its market share in the country is too low for it to be considered dominance
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Tech giant Apple has asked the Competition Commission of India (CCI) to throw out a case complaints accusing the company of violating India’s competition laws. The case, which was filed by a little-known non-profit organization from Jaipur, called Together We Fight Society (TWFS), alleges that the commissions Apple charges developers for selling apps and in-app items through the App Store, is in violation of competition rules.
In a response dated November 16, the iPhone maker argued that its market share in the country is too low for it to be considered dominance. “Without dominance, there can be no abuse," said the response, which is signed by Apple’s Chief Compliance Officer, Kyle Andeer.
TWFS filed the antitrust lawsuit against Apple in September this year. The lawsuit alleged that Apple’s 30 percent commission against in-app purchases through its App Store raised costs for both app developers and customers, and also worked as a roadblock for small developers to market their services to users.
Shivani Dharnia, president of TWFS, said that her organisation has already filed a rejoinder to Apple’s response with the CCI. TWFS is a Jaipur-based non-government organisation (NGO), and had filed the original information against Apple.
“We have stated in our rejoinder that while Apple may not have a notable market share in licensable operating systems in India, it does have significant presence in India among non-licensable operating systems," Dharnia told Mint. “This (TWFS’ complaint against Apple) is also in tune with a past decisional practice of CCI — in Case No. 39 of 2018 (Umar Javeed and others. v. Google)," she added.
Apple’s response to the CCI also claimed that the lawsuit may have been a “proxy filing" — an allegation that suggests that TWFS is acting “in concert with parties with whom Apple has ongoing commercial and contractual disputes globally and/or that have complained to other regulators."
Dharnia denied such allegations, and said that Apple has not offered any proof to back up this claim. “We will respond to such a claim as required, when Apple offers any proof about it, which it does not have," Dharnia told Mint.
Unlike cases in other countries, Apple may actually have a stand in the Indian case. “Under competition law, the question of abuse of unfair pricing can only be entertained if the entity in question is in a dominant position. The latter is not mere monopoly, but a function of several factors, of which market share is a headlining factor," Anisha Chand, partner at Khaitan & Co., told Mint.
“Apple has adopted the market definition in its defence, in which Google is the dominant player in India. Basis this, the challenge before the CCI is to adopt the right market definition, if this investigation is to go forward," Chand added.
She also cited a previous case against Apple, from 2016, which was against the company’s practice of bundling and tying its services to each other. The CCI had quashed that appeal, stating that there was no need for an investigation as Apple’s market share in India was much smaller. Chand said that Apple is likely to heavily rely on this case here, but it must also be cognisant to the fact that technology and Indian consumers have collectively changed and evolved since then.
“In case of the market of apps, if something is substitutable such as phone apps, then the market is looked at as a whole -- and not as a divided one depending on platforms,"said Abhishek Singh Baghel, associate partner at DSK Legal. “I believe that the case against Apple is likely to be quashed. Section 3 and 4 of the Competition Act, 2002 largely state that if the overall market share is within 0-5 percent, then there is no appreciable adverse effect of competition in India, that comes with it."
India’s CCI has been under the spotlight over competition regulation of Big Tech, since regulators overseas have taken significant decisions about Apple, Google and other tech companies’ business models recently.
In Japan, the country’s Fair Trade Commission found, Apple’s commission policy to be anti-competitive, in September. Apple, in turn, announced a settlement that would allow apps with in-app purchasable items to include an external payment link in the country. South Korea, too, has devised a policy that bars companies like Apple and Google from forcing their payments modes on app developers.
Apple also defended its App Store commission in a case against gaming giant Epic Games, by stating that the commission acts as royalty paid by developers to use a uniquely secure platform that it has invested in, to develop.