'India needs to safeguard developers, consumers from app stores' practices'

May 18, 2022

New Delhi, May 18 (IANS) The Competition Commission of India (CCI) is currently investigating both Apple and Google for their app store policies, particularly their payments policies, and the decision will play a key role in determining how Indian policymakers look at the issue in the future, a new report said on Wednesday.

Google-owned Android currently dominates the India market with 95.1 per cent market share while Apple iOS has 3.93 per cent share.

Both Google and Apple charge either 15 or 30 per cent commission on purchase of paid apps and in-app purchases (IAPs) in the country.

Starting October this year, Google — which has a mobile OS market share of over 95 per cent in India — will effectively bar developers from using any other method to accept payments from customers, thus forcing the payment of its commission.

According to the report by The Alliance of Digital India Foundation (ADIF) and The Quantum Hub, several Indian developers have objected to the quantum of the commissions, and the lack of choice in picking a payments system, terming the proposed policy unreasonable.

“Google’s new rules could significantly dent developers’ profit margins, affecting both business viability and innovation,” said the report.

The ADIF said that it welcomes the steps taken by the Parliamentary Standing Committee on Finance to hold a meeting with Big Tech companies with the aim of deliberating issues related to their competitive practices.

“The dominant position enjoyed by the gatekeepers of the app ecosystem can severely hurt competition and innovation in the market, while also adversely affecting the ecosystem in many ways,” said Sijo Kuruvilla George, the Executive Director of ADIF.

With the CCI currently investigating both App Store and Google Play’s store policies, particularly their payments policies, the need of the hour is a balanced approach, and the CCI’s decision will likely play a key role in determining how policymakers look at the issue in the future, the report stressed.

Apple is currently under investigation from regulators in the US, Europe, Japan, Australia and India, while Google is also facing proceedings in the US, Europe and India, among other countries.

In December 2021, the Netherlands competition regulator (ACM) found Apple’s App Store in violation of its competition laws.

It has since levied a series of (weekly) penalties against Apple for what it asserts is continued non-compliance with its order and these fines totalled over $55 million with the regulator threatening another round of fines “with possible higher penalties”.

In March, France also joined the fray with the Paris Commercial Court levying a fine of 2 million euros on Google and asking it to rewrite clauses in its developer agreements that were deemed unbalanced within three months.

In August 2021, South Korea passed a law barring app stores from forcing developers to use the app stores’ proprietary billing system, becoming the first such major legislation worldwide.

Another legislation — The Digital Markets Act — is currently under consideration in the EU.

“It’s, thus, commendable that legislators are taking notice of such issues and actively taking steps to address the anti-competition practices of big players,” said George, adding that there is an urgent need to ensure fair competition and improve choices for both developers and consumers.



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