Wednesday, November 30, 2022

‘CCI ruling on Apple may not be as harsh as in Google’s case’

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NEW DELHI : The Competition Commission of India’s (CCI) decision on the antitrust case against Apple may not be as severe as the ruling against Google, competition lawyers said. The tech giant, which is facing an antitrust complaint before the CCI for its App Store business practices, may put up similar arguments as it had during the landmark anti-competition trial against gaming firm Epic Games in the US to avoid penalties and regulatory orders similar to Google’s in India.

While Google faces a 936 crore penalty for its billing policies on Play Store, Apple may be able to avoid penalties since it does not have a licensable operating system. In fact, CCI said that there was a difference between Apple’s and Google’s ecosystems considering Google imposes its own billing system on app developers selling services and digital items on the Play Store.

In its order last week, CCI said Google’s practice of mandating the use of its own billing methods on Play Store to earn commissions was anticompetitive under Indian competition laws. CCI charged a fine of 936 crore and asked Google to open up its billing ecosystem to third party mediums within 90 days of the order. Google is expected to challenge the CCI order.

“In its probe order to Apple, CCI had said that if a developer wanted to reach out to Apple’s user base, the App Store is the only way. Once on it, all Apple policies are mandatory. So, unless Apple can justify this restriction and demonstrate safety, privacy or other factors that are compelling enough to show that the App Store is pro-consumer enough to outweigh the restrictive market effects, they will likely face the same future,” a competition lawyer said, requesting anonymity.

During the Epic Games trial, Craig Federighi, senior vice-president of software engineering at Apple, said in court that its Mac desktop operating system, which allowed using third party download sources and billing methods, is much more prone to cyber breaches of various kinds. This, the executive claimed, is drastically different for iOS and does not allow alternative app download locations or third party billing systems. Apple won the case and the judge declared that it was not engaging in monopolistic practices, though Apple was ordered to allow third-party payments on the App Store.

Apple will likely combine this argument with the fact that its market share in India is very small, said the lawyer cited above. At the end of 2021, Apple had a market share of 3.8% in India, according to market researcher International Data Corp. Apple may try to prove that its ecosystem amounts to an exclusive environment and is not interchangeable with Android devices, partly because its iPhones are more expensive. An Apple official in India declined to comment.

“In the smartphone space, the key thing to note is that despite different software ecosystems, if two devices are interchangeable for a consumer, they may well fall in the same domain. Along with this factor, Apple may try to show interchangeability between iPhones, and an Android device, is not similar,” the lawyer said.

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