Apple Accused of Anticompetitive Practices in India Over iPhone

Apple in IndiaApple Inc. has been accused of engaging in anticompetitive practices in India and is under investigation by the Competition Commission of India (CCI). The investigation comes in response to a complaint lodged with the CCI that accuses Apple of limiting access to the iPhone by only selling it through limited carriers and by only offering the iPad through its own stores. Apple also stands accused of only allowing apps from its “iStore,” the CCI’s new branding for Apple’s App Store.

The issues are manyfold: Firstly, customers can only buy iPhones from its authorized resellers and from carriers Aircel and Bharti airtel. Relating to this, while customer can buy unlocked iPhones from these same outlets, the price of a locked phone is similar to that of an unlocked phone. The complaint appears to allege that carriers are taking advantage of their unusual (for India’s market) exclusivity to charge unreasonable prices for Apple’s iPhones.

What isn’t clear, however, is if carrier plans include the extra expenses that go into subsidizing mobile handsets in the U.S. — in India, as in China and other emerging markets, carrier subsidies are not the way mobile devices are usually sold.

In addition, Apple only allows its iPhones to be serviced through third party retail stores licensed by Apple India for that country’s retail market (many “Apple Premium Resellers” have stores modeled on Apple’s own Apple Stores), and those stores are accused of charging “high rates” for said service.

Furthermore, Apple limits the iPad to its own online Apple Store and possibly to Apple Premium Resellers. Coverage from India on the story has varied from referring to “Apple Stores,” which Apple does not yet have in India, to “Apple Centres,” which also do not appear to exist by that name, but both likely refer to the Apple Premium Resellers mentioned above.

lastly, we have our favorite aspect of the complaint, coming to us from a “senior CCI official, who was quoted widely, including by IBNLive. He said, “The complainant has also alleged that a user can only download software from the iStore and the others are not recognised by the device.”

In other words, Apple stands accused of doing business in India the way it does in every other market, by controlling its product line, retailers that sell its goods, and the customer experience, practices which could possibly run afoul of Indian regulations, specifically section 4 of the Competition Act 2002.