Colombia’s competition authority has opened an administrative probe into Apple (NASDAQ:AAPL) alleging that the company abused its dominant position in the distribution of apps and purchases on iOS and iPadOS.
The Superintendence of Industry and Commerce’s Delegation for the Protection of Competition said it has preliminarily established that Apple, in its capacity as an agent with a dominant position, had implemented different abusive strategies that would be contrary to free economic competition.
Apple did not immediately respond to a request for comment from Seeking Alpha.
These strategies would have given rise to the violation under law consisting of obstructing third parties’ access to markets and or marketing channels, the agency added.
The agency has two main concerns. Firstly, Apple allegedly restricted the access of new entrants to the digital app distribution market. This behavior was allegedly implemented by imposing contractual clauses that would prohibit developers from creating and operating alternative app stores to the App Store.
The alleged restriction would have limited developers’ ability to distribute their own products and those of other providers, outside the Apple-controlled ecosystem, the agency added.
The Delegation noted that this conduct would be intended to exclude potential competitors and preserve Apple’s monopolistic position in the digital goods distribution market for the iOS and iPadOS operating systems. To that extent, anyone wanting to sell or buy in this ecosystem could only do so through Apple’s App Store.
Secondly, Apple allegedly hindered native iOS and iPadOS app developers’ access to marketing channels. This behavior allegedly materialized by preventing developers from offering their users alternative payment methods for buying services and digital subscriptions within their apps.
In this second scenario, the Delegation said that it found that Apple would contractually impose the exclusive use of its In-App Purchase system (API) as a mandatory condition for developers to offer and market such services to end users or consumers.
This restriction would, in practice, mean that developers would be unable to offer their users alternative payment methods for buying services and digital subscriptions within their apps, which would have led Apple to take advantage of this limitation to increase its profits, the agency noted.
Under this, Apple would take a commission ranging from 15% to 30% of the value of each transaction, while prohibiting developers from informing users about potentially cheaper external payment methods, thus excluding any transactional channels outside the iOS and iPadOS ecosystem, the Delegation added.
The Delegation said that among the potential effects of the alleged anticompetitive conduct initially identified are — the creation of artificial barriers that would hinder the entry and permanence of new developers in the iOS and iPadOS ecosystem; the existence of unjustified overcharges for services and subscriptions offered through native applications of said ecosystem; and a degradation of the user experience by limiting service functionalities, payment options, and access to relevant information.
Apple has faced similar allegations in the EU related to the App Store. Last month, the U.S. tech giant adjusted its App Store rules to avoid fines in the EU.
Separately, last month, Spain’s antitrust agency, National Commission of Markets and Competition, said it was expanding its probe into potential anti-competitive practices by Apple related to the setting of pricing schedules in its App Store.