CCI seeks Apple's reply on alleged violation of competition norms

Fair trade watchdog CCI has sought a reply from Apple on the investigation report which has found that the technology major allegedly violated competition norms with respect to its App Store, according to sources.

The sources said the supplementary investigation report by the regulator's Director General (DG) has concluded that Apple allegedly abused its market dominance in the relevant market, violating various provisions of Section 4 of the competition law.

In December 2021, Competition Commission of India (CCI) ordered a detailed probe against Apple after prima facie finding that the company abused its market dominance.

The sources said the regulator was not satisfied with the initial report submitted by the DG and sought another probe on specific aspects.

The supplementary investigation report was submitted to the CCI in June, they added.

The watchdog has sent the non-confidential version of the report to Apple for its reply, the sources said and added that final hearings will commence after receiving the responses from the company as well as the complainant.

An Apple spokesperson declined to comment on the query regarding CCI seeking reply on the investigation report.

A Jaipur-based NGO, Together We Fight Society, had filed the complaint before CCI.

The sources also said the confidentiality ring is expected to be put in place before the hearing begins.

Under the confidentiality ring, each party will have their designated persons with whom confidential information in the probe report will be shared for their perusal, subject to certain undertakings to be given by them.

After the final hearings, which could take a few months, CCI will pass the final order.

While ordering the probe in December 2021, the regulator had said Apple prima facie violated various provisions of competition law's Section 4, which pertains to abuse of market dominance.

The relevant market for the probe was defined as 'market for app stores for iOS in India'.

In the order passed in December 2021, CCI had observed that Apple's App Store is the only channel for app developers to distribute their apps to iOS consumers, which is pre-installed in every iPhone and iPad.

"Further, third-party app stores are not allowed to be listed on Apple's App Store as the developer guidelines as well as agreement prohibits app developers from offering such services. These restrictions imposed by Apple foreclose the market for app stores for iOS for potential app distributors," it had said.

This prima facie results in denial of market access for the potential app distributors/app store developers in violation of competition norms, the order had said.

Further, it had noted that such practices prima facie result in limiting/restricting the technical or scientific development of the services related to the app store for iOS, due to reduced pressure on Apple to continuously innovate and improve its own app store, which is also in violation of competition rules.