Why the Complaint filed against Apple Inc. before the CCI shall fail ??

It’s certainly not ethical to comment upon the matter which is presently sub-judice (even if you’re not a party to the suit), but honestly, I just couldn’t help it!! 😛 Partly because I was skeptical of the recent complaint which has been filed before CCI against Apple Inc. for its allegedly abusive market practices of allowing its iPhone to be bundled with only two service providers, namely, Aircel and Bharti Airtel. However, while the audacity of an individual to go up against a Transnational Corporation is to be admired, I must say, with a comparatively high degree of confidence, that the complaint shall most probably be dismissed on the following grounds:

1. According to reports by Bar & Bench and Legallyindia, the complaint has been filed under Section 4 of the Competition Act. (Abuse of Dominant position). However, there is no evidence to show that Apple Inc. even has a dominant position in the relevant market (India). Let alone abuse it. According to data on Fonearena.com for the year 2009 (unfortunately, the latest I could find), and quote:

“Over 100 million mobile phones were sold in India in 2009 according to a research firm IDC India.  What’s surprising is that Nokia still has a lion’s share of the mobile sales at 54.1%. Samsung Mobiles has 9.7 % share and LG has 6.4 %…. There were more than 28 new handset brands which started selling handsets in 2009 and these new players account for over 12.3%  of handset sales which is quite significant…..The local players account for 17.5 % of sales now. These include Micromax, Karbonn Mobiles, Spice Mobiles Ltd, Videocon Industries Ltd and Lava International Ltd.”

Therefore, effectively, it is only Nokia according to this data which stands any chance of abusing its dominant position. Assuming there has been a change in these numbers in the year 2010 till date, there is no reason to believe that the change could have been substantial enough so as to suddenly allow Apple Inc. to dominate the market as per its whims and fancies.

2. An argument may be raised that the relevant market in this case would in fact, not be the regular handset market, but rather, the narrower Smartphone market. However, it is doubtful whether the Commission shall accept such an argument. But to create no prejudices, a good authoritative lawyer could convince the Commission on this point.

3. What the Complainant has alleged in his/her Complaint is in fact a case of “tie-in arrangements”, “exclusive supply agreements” and “refusal to deal” under Section 3. Therefore, one fails to understand exactly why the complainant has alleged a violation of Section 4. Advice to Complainant: Get yourself a better lawyer!!

4. Arguendo, assuming that the complaint had alleged the violation of Section 3, it is extremely doubtful that it is violation of Section 3 as it is Apple itself which has designed the iPhone and all its applications and services. Apple Inc. controls the entire process of the manufacturing and distribution of the iPhone, and all applications can only be accessed and downloaded via the iStore because they are designed by Apple Inc. itself. Those that are designed by individuals other than Apple must also be added to the iStore database as Apple products run on a separate platform (Macintosh), Apple has traditionally always kept a “closed system”, as it is called in tech jargon to try and maintain the exclusivity of its products. (In fact, this is the primary reason why one finds far fewer virus programs attacking Mac PC’s and Smartphone’s, another shot in the arm for Apple).

5. Lastly, in both the above cases, Apple Inc. has not in any manner prevented its competitors from continuing their business. There is no evidence to show that any of its policies results in denial of market access in any manner to any other handset manufacturer which would not qualify as regular competition. In fact, market indicators clearly show that presently, there exists robust and healthy competition in the Mobile Market in India.

As regards the iPad, I shall reserve my opinion as I was unable to find any conclusive survey on the market share of Apple in the Tablet market in India.