Apple’s EU move may help Indian developers

Apple Inc.’s decision to allow third-party app stores to operate on iPhones and iPads in the European Union (EU) is likely to have a cascading impact on Indian app developers as well, industry experts said.

Even without a direct equivalent of the EU’s Digital Markets Act (DMA), the move will set precedent, and push Apple to initiate similar measures in other markets, they added.

On 14 December, Bloomberg reported that Apple plans to change a long-standing policy of not allowing app downloads on iOS from third-party stores, following the EU’s new competition regulation, which mandates an open consumer market where users will have a choice in terms of the services they wish to use. The law will come into effect from March 2024, and Apple is reportedly tweaking its policy to comply with the DMA.

Ajay Data, secretary general, Alliance of Digital India Foundation (ADIF), said Android allowing the use of third-party marketplaces should serve as an example. “The moment such a move is adopted in a market, India will push to adopt a similar policy. The industry will also immediately make a push to adopt similar policy for the Indian market as well, and it will be a matter of time before Apple is forced to adhere to it. Else, it will be a single Competition Commission of India (CCI) directive away,” he said.

Google’s Android platform allows users to download apps from third-party app stores or from a developer website directly, such as those of original equipment manufacturers Xiaomi or Samsung. The Centre also has a marketplace, mSeva, which does not charge commissions from developers.

In May, ADIF filed a complaint with CCI against Apple for allegedly misusing market dominance and charging 30% commissions on the App Store which is deemed very high by developers. While a verdict is expected in the coming weeks, experts said Apple may manage to escape heavy penalties, unlike rival Google, by citing iOS as a non-licensable (and thus proprietary) operating system.

While India does not have a equivalent regulation such as the DMA to take on Big Tech, lawyers said the involvement of CCI could be key to enforcing rules on the likes of Apple. “While India’s proposed Digital India Act, or Competition (Amendment) Bill, 2022, do not hold direct parallels to the EU DMA to regulate BigTech, we have seen the CCI directing remedies to achieve the same result in specific cases against Big Tech. Apple’s EU move may set guiding principles for more such verdicts, even in the absence of a specific law,” said Anisha Chand, partner, competition and antitrust practice at law firm Khaitan & Co..

In October, CCI penalized Google on two instances with a fine of ₹2,337 crore for allegedly using its dominant position to promote its own platforms for accepting payments and earning commissions on the Play Store.

While the CCI does not have the market power to decide commission rates, industry stakeholders lauded the CCI move.

However, Apple is also believed to be looking at imposing certain checks and balances, such as mandating a cyber security check on which marketplace could be allowed to be accessible on iOS, and also charging a fee from these app marketplace operators.

Both security and commission have been key issues pertaining to Apple’s refusal to open up the walled garden of the iOS app ecosystem. In 2019, Apple software chief Craig Federighi claimed that allowing third party downloads on iOS would compromise the comparatively higher level of security from malware on iOS — citing examples of Google’s Android and Apple’s own macOS as operating systems that allow third party downloads, but pose greater cyber risk to users.

Apple did not respond to an emailed query on the purported move, till press time.

The App Store commission of up to 30%, meanwhile, has been a long-standing point of conflict between developers and Apple, with the latest example of a protesting voice being Elon Musk-owned social media platform, Twitter, which has started charging a premium of over 35% for the subscription fee of its paid usage tier, Twitter Blue.

Rameesh Kailasam, chief executive of startup industry body IndiaTech.org, said that any move “that democratizes access to apps is welcome.”

“Anything that democratizes access with a huge price point is not welcome. Even in the case of app purchases, if payment gateways are taking 4-5% commission, that is fine. But, a 30% commission rate is unreasonable. India should also take note, and push for anything that democratizes apps in a fair and equitable manner,” he added.