American tech giant Apple, which is accelerating its expansion in the Indian market, has suffered a major regulatory setback. After a long tussle, the company has finally agreed to share financial information of its Indian business with the Competition Commission of India (CCI). This is the biggest high-profile dispute for Apple in India so far and this move paves the way for Apple to face heavy fines in India. Let us understand this entire matter in detail.
The bone of contention: Startups vs. Apple
This whole matter is related to the alleged arbitrariness being done by Apple with the developers on its App Store. In 2021, ‘Alliance of Digital India Foundation’ (ADIF), a group of Indian startups, Tinder’s parent company Match and a non-profit organization jointly filed a complaint against Apple. They alleged that Apple’s App Store has become a mandatory platform for developers and the company prevents app makers from using any other (third-party) payment service for in-app purchases. Subsequently, a CCI investigation in 2024 found Apple guilty of abusing its dominance in the iPhone app market.
The problem of fine and fear of 38 billion dollars
Despite being found guilty in the investigation, Apple was still refusing to give its financial information to the Commission and had talked about challenging these findings. The company’s main argument was that the fine under India’s new competition law could be based on the company’s global turnover. According to Apple, if it had to give its global financial information, it could face a huge fine of up to $38 billion.
However, CCI rejected this argument and clarified that initially it only needed the data of Apple’s Indian business to decide the penalty. The Commission believed that this American giant was only trying to delay the case through parallel court challenges. Ultimately, the company had to change its stance after a judge ordered Apple to cooperate with the investigation last month.
Market situation and the way forward
During the CCI hearing held on May 21, Apple’s lawyers had asked for a deadline of June 25 to file specific financial information related to India, which has been accepted by the Commission. In the same hearing, Startups Group (ADIF) also appealed to the Commission not to delay the matter further.
India has emerged as a very important market for Apple after China. According to Counterpoint Research data, iPhone share in India’s smartphone market has increased from 2% to 9% in the last five years. However, in its defense, Apple says that Google’s Android system has a huge dominance in the Indian market and it is a small player in this market. It is noteworthy that in 2022, CCI had also imposed a fine of $ 113 million on Google for misusing its dominance. Now after Apple submits its financial data by June 25, the Commission will take its final decision on determining the amount of the fine.