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Apple Faces CCI Antitrust Probe Over Alleged Abuse of App Market

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By Press Trust of India | Updated: 1 January 2022

The Competition Commission of India (CCI) on Friday ordered a detailed probe against technology major Apple for alleged unfair business practices with respect to its App Store.

It was alleged that Apple uses anti-competitive restraints and abuse of dominant practices in markets for distribution of applications (apps) to users as well as in processing of payments for digital content used within iOS mobile apps.

The complaint was filed against Apple Inc and Apple India Pvt Ltd.

In a 20-page order, the watchdog said Apple’s App Store is the only channel for app developers to distribute their apps to iOS consumers which is pre-installed on 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 prohibit app developers from offering such services… these restrictions imposed by Apple forecloses the market for app stores for iOS for potential app distributors,” the order said.

According to the CCI, this prima facie results in denial of market access for the potential app distributors/ app store developers in violation of competition norms.

Further, such practices prima facie result in limiting/restricting the technical or scientific development of the services related to 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, the order said.

Citing these factors, the regulator has ordered a detailed probe by its Director General (DG).

Apple did not respond to a query on the CCI probe.

To assess the complaint, the CCI has taken the “market for app stores for iOS in India” as the relevant one.

The watchdog said the app developers appear to be dependent on the Apple’s App Store to reach the app users and app users are also dependent on the App Store to download apps.

“Thus, the Commission is of the prima facie view that Apple holds a monopoly position in the relevant market for app stores for iOS in India. This dependence of the app developers appear to result in acceptance of Apple’s mandatory and non-negotiable rules inter alia relating to distribution of apps through App Store, by the latter,” the order said.

Among other aspects, the watchdog observed that Apple conditions the provision of app distribution services on the app developer accepting supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of the contract for provision of distribution services.

“This appears to be in violation of Section 4(2)(d) of the Act. Further, it also prima facie results in leveraging by Apple of its dominant position in App Store market to enter/protect its market for in-app purchase payment processing market, in violation of Section 4(2)(e) of the Act,” the order said.

Section 4(2) of the Competition Act pertains to abuse of dominant position.

Regarding Apple’s averments that it has a market share of 0-5 per cent only, the order said the “Commission is of the view that the approach of Apple is completely misdirected as the alleged anti-competitive restrictions, in the present matter, have been imposed on the app developers in the form of App Store policies, by Apple”.

In other words, the CCI noted that the allegation in the present matter pertains to abuse of dominance by Apple in relation to the app developers.

“Therefore, at this stage, it appears that the relevant market has to be defined from the perspective of the app developers and not from the perspective of end users,” the order said.

Apple has contended that the complainant is likely acting in concert with parties with whom Apple has ongoing commercial and contractual disputes globally and/or that have complained to other regulators.

Besides, the company told the regulator that it should be wary of attempts by persons who use proxy parties as a front rather than coming forward in their own name.

In this regard, CCI said that as per the extant statutory framework, the informant has a limited role and the proceedings before the Commission are purely guided by the merits of the matter in terms of the provisions of the Act. “The Commission would intervene in any matter only if same merits consideration under the relevant provisions of the Act”.

The complaint was filed by NGO Together We Fight Society.

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Apple Fined EUR 5 Million by Dutch Watchdog Over App Store Payment Options

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By Agence France-Presse | Updated: 25 January 2022

The Dutch consumer watchdog fined Apple EUR five million (roughly Rs. 42 crore) on Monday for failing to allow dating app operators to choose payment options other than its own Apple Pay system in its Dutch App Store.

The Authority for Consumers and Markets had already warned Apple last month that it faced a penalty of EUR five million (roughly Rs. 42 crore) per week – and a maximum fine of EUR 50 million (roughly Rs. 420 crore) in total – if it failed to change the conditions for access to the Dutch App Store.

“In the App Store, dating app providers must also be able to use payment systems other than Apple’s payment system,” the watchdog had said at the time.

A Dutch judge had given Apple until January 15 to make the changes.

Apple last week told the ACM that it had made the necessary adjustments, but its submission was turned down and a fine imposed.

Apple “failed to adjust its conditions, as a result of which dating app providers are still unable to use other payment systems,” the ACM said in a statement on Monday.

In November, a US federal court had ordered Apple to loosen control of its App Store payment options after a legal clash with Fortnite creator Epic Games, which had accused the iPhone maker of operating a monopoly in its shop for digital goods or services.

The US judge, however, said Epic had failed to prove that antitrust violations had taken place.

Also in November, Italy fined both Amazon and Apple more than EUR 200 million (roughly Rs. 1,690 crore) for preventing official and unofficial resellers of Apple and Beats products from using Amazon.it.

Apple did not immediately comment on the ACM statement on Monday.

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WeChat Account of Australia Prime Minister Scott Morrison Taken Over and Renamed, Lawmaker Accuses China

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By Associated Press | Updated: 24 January 2022

Australian Prime Minister Scott Morrison’s account on Chinese-owned social media platform WeChat was taken over and renamed, and a lawmaker on Monday accused China’s leaders of political interference.

Morrison’s 76,000 WeChat followers were notified his page had been renamed “Australian Chinese new life” earlier this month and his photograph had been removed, Sydney’s The Daily Telegraph newspaper reported. The changes were made without the government’s knowledge, the report said.

Morrison’s office declined to comment on the report.

Joint Parliamentary Committee on Intelligence and Security Chair James Paterson said WeChat has not replied to an Australian government request that the prime minister’s account be restored.

Paterson accused the Chinese Communist Party of censoring the prime minister with Australia’s elections due by May.

Paterson, who is a member of Morrison’s conservative Liberal Party, called on all lawmakers to boycott the platform, which is owned by Chinese technology giant Tencent.

“What the Chinese government has done by shutting down an Australian account is foreign interference of Australian democracy in an election year,” Paterson told Sydney Radio on 2GB.

“No politician should be on WeChat and legitimizing their censorship,” Paterson added.

Paterson said it was concerning that 1.2 million Chinese Australians who use the platform couldn’t access news from the prime minister, but could still see criticisms of the government made by opposition leader Anthony Albanese.

Liberal Party lawmaker and former diplomat Dave Sharma said the interference was likely sanctioned by the Chinese government.

Sharma said while Morrison used WeChat to connect with Australia’s Chinese diaspora, the platform was ultimately controlled by the Chinese Communist Party.

“More likely than not it was state-sanctioned and it shows the attitude towards free speech and freedom of expression that comes out of Beijing,” Sharma told Sky News television.

Morrison has had a vexed relationship with China since he replaced Malcolm Turnbull as prime minister in 2018.

The Chinese have been critical of a new partnership involving Australia, Britain, and the United States announced in September under which Australia will be provided with nuclear-powered submarines.

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Facebook-Parent Meta Removes Iran-Based Fake Accounts Targeting Instagram Users in Scotland

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By Reuters | Updated: 21 January 2022

Facebook parent Meta Platforms removed a network of fake accounts that originated in Iran and targeted Instagram users in Scotland with content supporting Scottish independence, the company’s investigators said on Thursday.

The network used fake accounts to pose as locals in England and Scotland, posting photos and memes about current events and criticism of the United Kingdom’s government, Meta said.

The accounts organised their content around common hashtags promoting the cause, though they at times misspelled them, the company said. The accounts also posted about football and UK cities, likely to make the fictitious personas seem more authentic.

Some of the fake accounts used profile pictures likely created through AI techniques, while others used photos of media personalities and celebrities from the UK and Iraq as profile pictures, Meta said.

In a referendum on Scottish independence in 2014, Scots voted 55 percent-45 percent to remain in the United Kingdom, but both Brexit and the British government’s handling of the COVID-19 crisis have bolstered support for independence among Scots and demands for a second vote.

Meta said its investigation found links to individuals in Iran, including people with a background in teaching English as a foreign language.

It said the operation had some connections with a small Iran-based network it previously removed in December 2020, which mostly targeted Arabic, French, and English-speaking audiences using fake accounts, but did not provide further details on who might be behind the activity.

“We’ve seen a range of operations coming from Iran over the last few years,” said Ben Nimmo, Meta’s global threat intelligence lead for influence operations, in a press briefing. “It’s not a monolithic environment.”

The social media company said it had removed eight Facebook accounts and 126 Instagram accounts as part of this latest network in December for violating its rules against coordinated inauthentic behavior.

Meta also said in December it removed a network that originated primarily in Mexico and targeted audiences in countries including Honduras, Ecuador and El Salvador, and a network that originated in Turkey and targeted people in Libya.

© Thomson Reuters 2022

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Apple Complies With Dutch Watchdog Ruling on Dating App Payment Options

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By Reuters | Updated: 17 January 2022

Apple said on Saturday it would allow developers of dating apps in the Netherlands to offer non-Apple payment options to their users, complying with an order from the country’s market regulator to do so by January 15 or face fines.

The country’s Authority for Consumers and Markets found in a decision published on December 24 that Apple had abused its market position by requiring dating app developers, including Tinder owner Match Group, to exclusively use Apple’s in-app payment system.

Apple’s practice of requiring developers to use its system and pay commissions of 15-30 percent on digital goods purchases has come under scrutiny from regulators and lawmakers around the world, but the Dutch ruling applies only in the Netherlands and only for dating apps.

In a post on its developers’ blog on Saturday, Apple said it would comply with the decision and introduce “two optional new entitlements exclusively applicable to dating apps on the Netherlands App Store that provide additional payment processing options for users”.

However it noted that developers were not required to use the non-Apple tools, and warned that Apple would not be able to help with safety or refunds of payments that take place outside its systems because it will “not be directly aware of them”.

Apple is appealing the Dutch decision.

© Thomson Reuters 2022

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Netflix Raises Monthly Subscription Prices in US, Canada

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By Reuters | Updated: 15 January 2022

Netflix has raised its monthly subscription price by $1 to $2 (roughly Rs. 75 to Rs. 150) per month in the United States depending on the plan, the company said on Friday, to help pay for new programming to compete in the crowded streaming TV market.

The standard plan, which allows for two simultaneous streams, now costs $15.49 (roughly Rs. 1,100) per month, up from $13.99(roughly Rs. 1,000), in the United States.

Prices also went up in Canada, where the standard plan climbed to CAD 16.49 (roughly Rs. 970) from CAD 14.99 (roughly Rs. 880).

The price increases, the first in those markets since October 2020, took effect immediately for new customers. Existing members will see the new prices in the coming weeks when they receive their monthly bills. The price increases have not been previously reported.

“We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” a Netflix spokesperson said.

“We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of plans so members can pick a price that works for their budget,” the spokesperson added.

The world’s largest streaming service is facing the most competition ever from companies looking to attract viewers to online entertainment. Walt Disney, AT&T’s WarnerMedia, Amazon and Apple are among the rivals pouring billions into new programming.

Netflix had said it would spend $17 billion (126457.05 crore) on programming in 2021. The company has not disclosed spending for 2022.

The US price of Netflix’s premium plan, which enables four streams at a time and streaming in ultra HD, was increased by $2 to $19.99 (roughly Rs. 140 to Rs. 1400) per month. For Netflix’s basic plan, with one stream, the cost rose by $1 to $9.99 (roughly Rs. 74 to Rs. 740) per month.

In Canada, the premium plan rose by CAD 2 to CAD 20.99 (roughly Rs. 118 to Rs. 1,200), and the basic plan was unchanged at CAD 9.99 (roughly Rs. 600).

The United States and Canada are Netflix’s largest region with 74 million customers as of September 2021. Most of the company’s recent growth has come from overseas.

Netflix’s subscriber growth slowed from a boom early in the COVID-19 pandemic but rebounded with help from global phenomenon Squid Game, a dystopian thriller from South Korea released in September. Total global subscriptions reached 213.6 million.

The company’s next subscriber report is due Thursday when Netflix posts quarterly earnings. Analysts project the company will report 8.5 million new sign-ups from October through December, according to Thomson Reuters I/B/E/S data, bringing its global subscriber base to 222 million.

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Google, Facebook CEOs Colluded in Online Advertisement Sales, Lawsuit Alleges

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By Associated Press | Updated: 15 January 2022

Newly unredacted documents from a state-led antitrust lawsuit against Google accuse the search giant of colluding with rival Facebook to manipulate online advertising sales. The CEOs of both companies were aware of the deal and signed off on it, the lawsuit alleges.

The original, redacted lawsuit, filed in December 2021, accused Google of “anti-competitive conduct” and of teaming up with the social networking giant. But the unredacted version offers details on the involvement of Alphabet CEO Sundar Pichai and Facebook CEO Mark Zuckerberg in approving the deal. Facebook has since renamed itself Meta.

According to the lawsuit, Facebook’s Chief Operating Officer, Sheryl Sandberg, was “explicit that ‘this is a big deal strategically'” in a 2018 email thread about the deal that included Facebook’s CEO. While the names of the Facebook executives are still redacted in the suit, their titles are visible.

When the two sides hammered out the terms of the agreement, “the team sent an email addressed directly to CEO” Zuckerberg, the lawsuit states.

“We’re nearly ready to sign and need your approval to move forward,” the email read, according to the complaint. Zuckerberg wanted to meet with Sandberg and his other executives before making a decision, the complaint states.

In a statement, Google spokesperson Peter Schottenfels said the lawsuit is “full of inaccuracies and lacks legal merit.”

In September 2018, the complaint says, the two companies signed the agreement. Sandberg, who was once the head of Google’s ad business, and Pichai personally signed off on the deal, per the states’ complaint.

Meta spokesperson Chris Sgro said Friday that the company’s ad bidding agreement with Google and similar agreements it has with other bidding platforms “have helped to increase competition for ad placements.”

“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all,” Sgro said.

Internally, Google used the code phrase “Jedi Blue” to refer to the 2018 agreement, according to the lawsuit. Google kept this code phrase secret.

Google’s Schottenfels said the lawsuit’s allegation that Pichai approved the deal with Facebook “isn’t accurate.”

“We sign hundreds of agreements every year that don’t require CEO approval, and this was no different,” he said, adding that the agreement “was never a secret.”

The lawsuit is led by Texas Attorney General Ken Paxton and was joined by the attorneys general of Alaska, Arkansas, Florida, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nevada, North Dakota, Puerto Rico, South Carolina, South Dakota and Utah.

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