Policy Wrap: Apple under scrutiny in Italy over app market dominance, EU seek more information on Apple’s mobile payment system, IT ministry to send notice to WhatsApp regarding spam calls, and more

Share your feedback and comments with us at office@adif.in

Apple under the microscope of Italy’s competition regulators over app market dominance

The electronics giant Apple is under the scrutiny of Italy's antitrust watchdog, which announced last Thursday that it has opened an investigation against the bigtech. Apple is accused of abusing its dominating position in the apps industry.

Just over two years ago, Apple introduced the App Tracking Transparency (ATT) feature, which mandated that third-party apps gain users' opt-in consent to be tracked for adverts. The competition watchdog said in a statement that the technology behemoth from Silicon Valley has adopted a more restrictive privacy policy for third-party app developers than it applies to itself. They expressed concern that Apple might be giving its own "personalised" adverts an unfair edge by not requiring the same permission pop-up that it does for third parties to track iOS users.

This implies that third parties will likely be at a disadvantage when it comes to the "quality and detail" of data that Apple makes available to them, including information about the success of their ad campaigns on iOS

The attractiveness of the advertising spaces supplied by app developers and acquired by advertisers depends heavily on the availability of data pertaining to user profiling and the evaluation of the efficacy of marketing campaigns. Because of this, the Authority claims that Apple's alleged discriminatory behaviour may increase the entry barrier for competitors in the app development and distribution market, benefit their own apps and, as a result, mobile devices and the Apple iOS operating system, and cause a drop in advertising revenue for third-party advertisers.

The regulator continued by expressing concern that Apple's actions may lessen incentives for the creation of innovative apps.

Since ATT began, antitrust regulators in Germany and Poland have also opened investigations against Apple.

EU antitrust regulators seek more information on Apple’s mobile payment system

The European Commission announced last Wednesday that EU antitrust investigators are looking for more information on Apple's mobile payment system, Apple Pay. This could be an indication that the enforcer is trying to strengthen its case against the iPhone manufacturer.

Last year, the EU competition authority accused Apple of making it difficult for rivals to develop competing services for Apple devices by limiting their access to its tap-and-go Near-Field Communication (NFC) technology, which is used for mobile wallets. The problem is that customers can tap to pay using Apple Pay, which they can access through the iPhone's near-field communication chip. Rival providers like PayPal do not offer this feature. In essence, users won't be able to utilise this function to pay for services offered by competitors.

According to a statement of objections the EU sent, the company exploits its monopoly over mobile wallets by restricting the services that outside companies can offer on the iPhone.

Apple has previously cited the popularity of PayPal on its iOS mobile operating system as an alternative for users, along with rival MobilePay from Denmark, Swish from Sweden, and Payconiq from Belgium.

Vipps, a Norwegian mobile payment app and the complainant, claimed that NFC alternatives are inefficient and uncompetitive.

If found guilty of violating antitrust laws, the regulator has the authority to penalise Apple up to 10% of its annual global revenue.

IT ministry to send notice to WhatsApp regarding the recent spike in spam calls

Shri Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, said that the Centre will send a notice to WhatsApp asking for information about the causes of the unexpected spike in spam calls on the instant messaging and calling service.

This occurs a day after the IT ministry asked WhatsApp for a report on an alleged privacy violation in which the instant messaging and calling app allegedly accessed the user's microphone even while the programme was not being used. WhatsApp has attributed the problem to an Android bug.

Additionally, WhatsApp will be questioned about the safeguards put in place to stop such calls and texts.

As per Shri Chandrashekhar, it is the duty of platforms to guarantee user security and guard against harm. The government is also considering regulations about the permissions that had to be made available by default for apps that come pre-installed on new handsets.

DPIIT undertaking third-party assessment of Startup India Seed Fund scheme to assess its impact on the ground

The Department for Promotion of Industry and Internal Trade (DPIIT) is undertaking an assessment by a third-party of the Rs 945 crore Startup India Seed Fund Scheme to determine its effects on the ground.

The programme, which debuted in April 2021, aims to provide funding to companies for market entry, product trials, prototype development, proof of concept, and commercialization. The fund was divided into four years so that qualifying entrepreneurs could receive seed money through incubators all around India.

The startup India seed fund scheme is undergoing an independent impact analysis. NIFM, the National Institute of Financial Management, is conducting it. The effectiveness of the programme will be examined independently. They will assess the effectiveness of the businesses and incubators, look at how this investment facilitated more opportunities, and provide the DPIIT with suggestions on how to strengthen efforts.

The government established Startup India on January 16, 2016, to offer funding at different points in a startup's lifecycle. The government has put into place the Startup India Seed Fund and Fund of Funds programmes under this.

Britain in discussions to provide multi-billion Pound funds to back startups

Leading asset managers in the UK are in advanced discussions to establish a multibillion-Pound investment fund to support UK startups and stop technology companies from choosing New York over London.

The 'Future Growth Fund', which is currently being discussed, plans to invest up to 50 billion pounds ($63.11 billion) from British pension funds in burgeoning biotech and technology companies.

The discussions take place at the same time as British politicians and regulators are working to speed up financial sector changes in a drive to draw more global corporations to Britain and its stock market.

Platform frauds account for 57% of all fraud incidents in India

In India, 'platform' fraud, a type of economic crime that involves fraudulent operations on social media, e-commerce, enterprise, and fintech platforms, accounted for more than half of all fraud instances, according to a PwC report released last Thursday.

This sort of fraud has increased as a result of the expansion in contactless payments, e-commerce, delivery applications, and remote employment.

Platform fraud caused approximately 26% of Indian companies to lose over $1 million, and 44% of those who committed the fraud did so to benefit financially.

The survey states that 89% of all platform frauds involved financial frauds on transactions made to or from platforms. These frauds range from simple unauthorised digital purchases to more complex identity theft and triangulation fraud. Also, 92% of all customer scams in India involved payment fraud, primarily using credit cards and digital wallets.

ADIF feels that implementation of a robust Digital India Act is the need of the hour. The Act should include a provision wherein a financial registry is set up with TRAI, which would circulate all such mobile numbers involved in spam calls or frauds to all Telecom service providers. The service providers in turn can block such numbers on an immediate basis to prevent more frauds from occurring from the same source. This will considerably reduce the number of cases of scams related to digital purchases, e-commerce, delivery, digital payments etc.

Government urge semiconductor startups, next-gen chip designers to invest in the semi-conductor sector

As part of a series at IIT Delhi, Minister of State for Electronics & IT, Shri Rajeev Chandrasekhar met startups, next-generation innovators, chip designers, and corporate executives to encourage them to invest in the semiconductor sector.

The minister had opened the second Semicon India FutureDESIGN Roadshow in February at IISc in Bengaluru, claiming that the nation is expanding quickly in global electronics value chains and that opportunities in the "New World Order of Semiconductor and Electronics" have been made possible by the nation's fast-growing digitalization and innovation economy.

Over a five-year period, the programme aims to provide financial incentives as well as design infrastructure support for semiconductor designs for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores, and semiconductor-linked designs.

India has been vying for the top spot in semi-conductor manufacturing for years. In December 2021, India announced an impressive $10 billion incentive for the semiconductor industry in terms of a payout for the manufacturers in this segment. However, India is not the only country which is competing for the top spot. US had passed the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act in 2022 with $50 billion in government subsidies, and have set up a lab for semi-conductors. South Korea in 2021 announced an enormous $450 billion investment to boost chip manufacturing. Even the EU has its own Chips Act which provides for $40 billion in subsidies.

Apart from this, India has announced a $2 billion investment into Semiconductor Complex Limited (SCL) to focus on chip designing and plans to set up an India Semiconductor Research Institute as well. India’s semiconductor market is expected to reach $64 billion in 2026, from the $22 billion in 2019.