India is getting in on the iPhone sideloading act

The EU has done it, the UK will probably do it, the US is considering it, and now India plans to follow suit with competition laws to regulate big technology firms, including Apple. Cupertino isn’t happy.

India’s Digital Competition Bill is a similar piece of legislation to the EU’s Digital Markets Act (DMA) that is forcing Apple to open up its ecosystem, most visibly through support for third-party app stores. India’s bill will prevent companies from promoting their own services above those of rivals, stop them from exploiting non-public user data, and also require support for third-party app purchases.

Free trade where we want it

Apple isn’t the only technology firm that’s unhappy about India’s proposals. Google and Amazon are also full of rue. 

That is why a US lobby group that represents all three big firms is pushing for India’s government to rethink its proposals, warning that the draft law goes further than the DMA. “Targeted companies are likely to reduce investment in India, pass on increased prices for digital services, and reduce the range of services,” the US-India Business Council reportedly said.  

(The irony that the US Chamber of Commerce should make that argument, even while the US Department of Justice struggles to bring in similar constraints on Apple and other big companies, is hard to ignore.)

A threat to Apple’s India plan?

Threat of this new law may also displease Apple’s latest manufacturing partner, Tata, which is making big investments to stake space in Apple’s India-based iPhone supply chain. The top tech company in India by market capitalization, Tata holds a senior seat on the US-India Business Council board. Most of the country’s big names have some representation on the group. 

In truth, Apple’s major investments in India may spell “iPhone” to the rest of us, but to those involved in its manufacturing supply chain there, the same word spells “profit” — and they are unlikely to want that nascent business beaten quite yet. 

We shall see what happens ahead, but the stage does seem set for some wrangling over the content of the new legislation. The proposals specifically target entities with a turnover in excess of $30 billion and at least 10 million local users of digital services — which basically means the big tech firms, whose market power the bill aims to constrain.

Apple wants to build business across the nation of 1.4 billion people and is well on the way to achieving that. As it seeks to reduce its reliance on China, the company is making huge efforts to build manufacturing centers and attract new users in India, so anything likely to make that work more challenging won’t be seen as ideal. 

Apple CEO Tim Cook recently said the company generated record revenues in India during the March quarter, though critics may claim part of this success reflects company control of the apps market on its platforms. 

Control of the means of production

Wrong or right, the extent to which big firms control the digital economy is what India’s regulations, just like those elsewhere, seek to constrain. Attempts to dent such market power is very much reflected in the work of India’s Competition Commission, which has already fined Google more than $160 million over app purchases and pre-installed apps. Apple is also undergoing investigation at this time. 

The act won’t become law immediately. The government is gathering feedback before submitting the regulations for approval by parliament, and there is no set timeline for that process to take place, according to Reuters.

But for Apple this new attempt to regulate its business surely makes it far more likely that it will eventually be forced to open up its platforms to third-party apps on a global basis, rather than just in the EU. I don’t see that happening swiftly, however. The cautious approach would be for consumers, competitors, the company, and any sensible regulators to review the potential failures of such openings-up in Europe, where third-party stores are now opening at a trickle, rather than a flood.

Pending further evidence, the jury remains out on the extent to which sideloading in Europe will undermine user security and privacy, or dilute the value of the user experience.

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