Apple is challenging India's antitrust penalty laws in the Delhi High Court, citing the risk of a $38 billion fine. The challenge focuses on amendments to the Competition Act that allow the Competition Commission of India (CCI) to calculate penalties based on a company's global turnover, rather than just its revenue generated in India. Apple argues that applying this amended law retroactively and basing penalties on global revenue is "arbitrary, unconstitutional, grossly disproportionate, unjust and totally unwarranted".
The core of Apple's argument is that penalties should be proportionate to the alleged offense within the Indian jurisdiction. Calculating fines based on global turnover, which for Apple is hundreds of billions of dollars, would lead to disproportionately high penalties. Apple contends that the CCI's interpretation of "turnover" to include global revenue exceeds its jurisdiction under the Competition Act. They argue that the CCI's jurisdiction should be restricted to instances where anti-competitive behavior's effect is confined to a foreign territory.
The specific legal challenge targets the 2023 amendment to Section 27(b) of the Competition Act, 2002, and the CCI's (Determination of Monetary Penalty) Guidelines issued in 2024. These changes allow the CCI to impose penalties of up to 10% of the average turnover or income for the past three years. Apple is also seeking to partially quash the CCI's Confidentiality Ring Order of March 3, 2025, which directed Apple to furnish its audited financial statements for FY2022-FY2024.
Apple's petition highlights a concern that the CCI is applying the amended penalty provisions retrospectively, citing the Nagrik Chetna Manch vs Fortified Security Solutions case as an example. Apple had previously faced scrutiny from the CCI, including an investigation into allegations of abusing its dominant position by requiring developers to use its in-app payment system. In August 2024, the CCI ordered a recall of investigation reports after Apple claimed the watchdog had disclosed commercial secrets to competitors.
This legal challenge is significant not only for Apple but also for other multinational corporations operating in India. The outcome could determine whether Indian regulators can impose penalties based on a company's global revenue, potentially leading to substantially higher fines. Several other big tech companies have faced scrutiny from the CCI, including Google and Meta. The Delhi High Court is scheduled to hear the case.
