Apple might face the antitrust music in India for allegedly hurting developers and local payment processing companies with its App Store rules.
In the face of increasing scrutiny over alleged anti-competitive and monopolistic behavior, Apple is now staring at yet another antitrust investigation in India over its App Store policies that are said to hurt developers. At the center is Apple’s policy of taking up to 30-percent from all in-app transactions, something not many developers are happy about. To ensure that its cut of revenue keeps coming, Apple forces developers to use the native in-app payments system and also prevents them from telling users about a third-party payments window where they can buy subscriptions or pay for virtual items. Over the past week, however, Apple has made a few notable changes to its App Store strategy under increasing pressure.
Last week, the company agreed to let developers reach out to users via email and tell them about alternative payment outlets. Earlier this week, South Korea passed a bill that stops Apple from forcing its in-house payment system on developers. A day after that, as part of a settlement with the Fair Trade Commission in Japan, Apple announced that starting next year it will allow media apps, such as Netflix and Spotify, to provide links to their own websites for payments across the globe. The end result is that some developers now have a way to avoid Apple’s mandatory 30-percent cut, which is being seen as a major victory. However, it appears that Apple’s troubles are far from over.
According to Reuters, the Competition Commission of India (CCI) is reviewing a case alleging that Apple is abusing its dominant market position by forcing developers to use its in-app payment system to make sure that its gets a 30-percent share of revenue as an App Store fee. Filed by a non-profit group named “Together We Fight Society,” the complaint claims that the fee not only harms developers, but is also damaging for Indian companies that offer payment processing services. In comparison to Apple’s 30-percent cut, these payment processing companies charge somewhere around 1-5-percent, which means developers can earn more and also pass the benefits to users if third-party app payments were allowed.
Of course, it is up to the country’s competition regulator to assess the merits and demerits of the complaint, and order an antitrust probe. However, the report mentions that there is a high chance that the CCI will review the case and order an investigation into the alleged antitrust violations by Apple. The fact that Apple is also facing similar charges in the EU might also inspire the CCI to move forward with a formal antitrust probe. That said, it’s not just Apple that might face the music from authorities over its revenue-sharing model, as Google is also under the scanner for a similar policy covering the Play Store.
In its defense, Apple mentions that the 30-percent cut allows it to cover the costs of maintaining a secure in-app payments infrastructure offered by the App Store. In absence of such a system, users will be left exposed to frauds and scams, says the company. That 30-percent fee is also a way to charge developers who are getting a huge platform with an extraordinarily wide reach to list their apps. Apple has make some other concessions recently, including reducing its cut from 30-percent down to 15-percent for developers earning less than $1 million each year. Even though that change by Apple covers a wide number of developers, big players such as Spotify and Epic haven’t been happy about being left out of the benefits program.
Source: Reuters
