Apple case: CCI recalls probe report; says move to protect 'legal rights of all parties involved'

New Delhi: Competition Commission has recalled the investigation report in the case related to alleged anti-competitive practices of technology major Apple to protect the "legal rights of all parties involved". The rare move by the regulator has come amid concerns raised by Apple that confidential information related to its business was part of the probe report that was sent to the parties involved in the case, sources said on Tuesday. When contacted, Competition Commission of India (CCI) Secretary Inder Pal Singh Bindra told that the directions issued to the Director General are procedural in nature to protect the legal rights of all parties involved.

The sources said the regulator has asked the DG to remove the confidential business information from the non-confidential report. Under the competition law, the regulator orders a detailed probe by its Director General (DG) against a company in case there is prima-facie evidence of violations. Once the probe report is submitted to CCI, the non-confidential version of the report is shared with the company and other parties concerned for their responses. After receiving the responses, CCI will start the final hearings and then pass the final order in the case. "The directions issued to the Director General, CCI are procedural in nature to protect the legal rights of all parties involved. It is clarified that no fresh investigation has been ordered in the matter," the CCI Secretary said in an e-mail.

The response was to queries about the reasons for the regulator's decision to recall the investigation report and whether certain confidential details inadvertently become part of the report that was sent to the parties in the case. The sources said the non-confidential report sent to the parties contained certain confidential business information of Apple and the company had complained about it. Subsequently, CCI decided to recall the probe report, they added. An e-mail sent to Apple for comments did not elicit a response. Earlier, CCI sought a reply from Apple on the investigation report which has found that the technology major allegedly violated competition norms with respect to its App Store.

The supplementary investigation report by the DG has concluded that Apple allegedly abused its market dominance in the relevant market, violating various provisions of Section 4 of the competition law, sources said earlier this month. In December 2021, CCI ordered a detailed probe against Apple after prima facie finding that the company abused its market dominance. The sources had said the regulator was not satisfied with the initial report submitted by the DG and sought another probe on specific aspects. The supplementary investigation report was submitted to the CCI in June, they had said. While ordering the probe in December 2021, the regulator had said Apple prima facie violated various provisions of competition law's Section 4, which pertains to abuse of market dominance.

The relevant market for the probe was defined as 'market for app stores for iOS in India'. In the order passed in December 2021, CCI had observed that Apple's App Store is the only channel for app developers to distribute their apps to iOS consumers, which is pre-installed in every iPhone and iPad. "Further, third-party app stores are not allowed to be listed on Apple's App Store as the developer guidelines as well as agreement prohibits app developers from offering such services. These restrictions imposed by Apple foreclose the market for app stores for iOS for potential app distributors," it had said.

This prima facie results in denial of market access for the potential app distributors/app store developers in violation of competition norms, the order had said. Further, it had noted that such practices prima facie result in limiting/restricting the technical or scientific development of the services related to the app store for iOS, due to reduced pressure on Apple to continuously innovate and improve its own app store, which is also in violation of competition rules.