GS Paper 3
Topics covered: Effects of liberalization
Context: An anti-trust case filed against Apple Inc for allegedly abusing its market position in the Indian economy.
- Apple is instituting policies that forces developers to use its proprietary in-app purchase system
- This allegation is similar to what Apple faced in the EU where regulators last year started an investigation into Apple’s imposition of an in-app fee of 30% for distribution of paid digital content and other restrictions.
- Such policies hurt the domestic companies by raising their cost of doing business
- Competition Commission of India (CCI) will review the case and could order its investigations arm to conduct a wider probe, or dismiss it altogether if it finds no merit in it
- Note: Filings and details of cases reviewed by the Competition Commission of India (CCI) are not made public.
- Recently, South Korea’s parliament this week approved a bill that bans major app store operators like Alphabet Inc’s Google and Apple from forcing software developers to use their payment systems.
- Justification given by the companies for their current policy: The fees levied by them covers the security and marketing benefits their app stores provide for companies
- CCI is conducting an investigation into a similar payment system concerning Google
- Other significant charges brought against Apple:
- Restriction on developers to use domestic payment systems which offer services at lower rates of 1-5%
- Restriction on developers on informing customers of alternative payment systems
- In recent times, such restrictions have been loosened. However, this behavior will not have an impact when CCI takes up the case for review.
It is a statutory body of the Government of India, responsible for enforcing the Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition.
Objectives of the Commission:
- To prevent practices having adverse effect on competition.
- To promote and sustain competition in markets.
- To protect the interests of consumers.
- To ensure freedom of trade.
Functions of the commission:
- It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
- The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
The Competition Act:
The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Know about EU’s case against Google- Click here
- What is anti-trust case?
- CCI- roles, responsibilities and functions
- Important anti-trust related cases
- Competition Commission Act
Ensuring a fair competition in the Indian digital market is in the best interest of every stakeholder involved. Comment
Source: The Hindu