Competition Commission of India : Out of syllabus Question for start-up’s
The CCI may ask the iPhone company to make changes to its app store billing and commission policies, as it has done in the case of Google, experts said. That would require Apple to open the ‘walled garden’, its closely guarded iOS operating system, something that the world’s most valuable company has not had to do anywhere in the world.
After its order against Google on 25th October 2022, probe against Apple is already completed and at the review stage after CCI got a new chairperson recently. Investigations into cases relating to Amazon, Meta, Swiggy, Zomato, Google, and news publishers are also in advanced stages, it is learned.
Almost for a decade all these Big Tech companies enjoyed free ride in India as far the question of abuse of Dominant position is concerned. They formed the policies, payment methods and collaborations at their own will without facing any challenge from regulatory body.
All of sudden, in last 3 years CCI started probe and order against Google was treated like landmark decision which imposed Rs. 1337 Crore fine and directing Google to allow third-party billing systems for payment on its app store and not limit the option for users to Google Play’s billing system (GPBS). Even, NCLT uphold the decision of CCI. Earlier, The Competition Commission of India (CCI) recently held the e-hospitality platform giants
MakeMyTrip- Go Ibibo and Oyo guilty of unfair trade practices. It imposed a combined pecuniary sanction of $47 million along with behavioural sanctions.
Now, probe against Apple’s app store billing and policies under review and the parties involved in the case will be called next to make their submission. The findings of the probe and the stand of the CCI are likely to be in line with the order against Google. If the CCI insists that Apple allow alternative payment methods to co-exist on its app store, then Apple ‘walled garden’ crumbles for sure. Amazon case is even more serious in nature as its directly/indirectly impacts lakhs of sellers specially domestic sellers.
After Google, Apple & Amazon, next in line are Meta, Swiggy, Zomato etc. and its seems like CCI first want to tame the Big Foreign Tech Companies and then home grown Unicorns are going to face the music. CCI’s evolving position on data-driven digital markets needs further analysis and more defined regulatory framework.
Quantum of Penalty & Relevant Turnover:
As per the provision, CCI has a discretion to impose a penalty with a quantum anywhere between 0-10 percent of the turnover. Wherein a cap of 10 percent has been imposed to keep a check on the powers of the CCI as well.
In the Excel Corp Care vs CCI case, the Supreme Court had held that the penalty under competition laws be stipulated on the basis of the ‘relevant turnover’ — turnover from the business engaged in violating conduct in the case of multi-product companies.
Moreover, CCI itself in the case of Delhi Vyapar Mahasangh vs Flipkart & Ors., and Lifestyle Equities C.V. vs Amazon noted that different segments of e-commerce platforms offer different dynamics and cannot be equated. It opined that while revenue segmentation is more appropriate in brick-and-mortar businesses, the integrated nature of multiple products and services offered over online platforms makes the relevant turnover rule ill-suited for digital platforms, exempting them from Supreme Court’s rule. It would thus be interesting to see how the appellate forums deal
with this issue, given that the regulator’s decision contradicts the apex court.
Conclusion:
Global developments witnessed in the past few years have led to a paradigm shift in the market dynamics. This shift has been propelled by thriving e-commerce model, evolving digital technologies, emerging new age markets and emergence of new business models. Well defined provision of law, clear guidance by the regulator, certainty in interpretation of the law and predictability of outcomes will surely secure the interest of all stakeholders in the competition regime.