Though Apple faces an antitrust challenge in India over allegations that it abused its dominant position in the apps market by asking app developers to use its proprietary purchase system, the company is by now familiar with such suits—as it faces similar concerns in the EU as well.
The cases in India and the EU both concern the charge that Apple abuses its market dominance with its in-app purchase policies. Experts say Apple’s low presence in the Indian smartphone market—with around two per cent overall market share—makes its case less relevant in the broader context. Market preferences should ideally drive price discovery or usage patterns, not regulations, says Subramanyam Sreenivasaiah, CEO at Ascent HR.
“While the government through CCI (Competition Commission of India) has instituted an investigation into the complaint against Apple, they should let markets discover such positions of price or usage else they are a deterrent to investments in the technology space and should be discouraged,” Sreenivasaiah says.
A few experts also feel that a CCI investigation could lead the sector into uncharted territory.
“The moot question is whether the government should decide on price or commission when it comes to non-regulated markets. For regulated commodities such as oil, the government has mandated the committee on pricing and taxation of petroleum products to decide at what price oil is sold to the consumer. And one can call it a justified practice. However, if the government decides to embark on such a journey in commercial markets, it will set a dangerous precedent that could be called upon by anyone, including NGOs, who are not direct parties in the market, to intervene on behalf of a market player. Such an outreach could challenge faith in the markets,” remarks Alok Shende of Ascentius Consulting.
Undoubtedly, it is a fact that Apple has faced many such investigations in many geographies already and may already have templates to deal with these. There is also the argument that an investigation could help the app ecosystem in India.
“This is a welcome development for India as an investment destination and for the development of the app ecosystem. On one hand, the investors and the companies developing IPs in India will feel assured of fair practices. And on the other hand, the developers would feel encouraged that the government is keeping the right amount of control and regulation to prevent monopolistic behaviours,” said Aditya Narayan Mishra, director and CEO of CIEL HR Services.
Legal experts point out that CCI has a good understanding of the market as it has been investigating a similar complaint against Google and hence will be able to do a decent job in the space. “If the CCI decides to investigate Apple, this will be Apple’s second encounter with the Indian competition regulator. Given that the CCI is already investigating Google for a similar conduct in relation to its Android Play Store, the CCI has a good understanding of this market. It will be interesting to see how the CCI defines the relevant market and how Apple’s position has changed since the previous investigation, which showed that Apple had a miniscule presence in the market for smart phones in India. This assessment will be pivotal for any determination by the CCI,” observes Charanya Lakshmikumaran, partner, Lakshmikumaran and Sridharan Attorneys.