Apple Challenges CCI's 'Global Turnover' Penalty Provision In Delhi High Court, Cites Disproportionality

A major legal challenge has been launched by Apple Inc. in the Delhi High Court, where the company has formally contested a provision allowing the Competition Commission of India (CCI) to calculate antitrust penalties based on a company’s vast global turnover.

The move, as reported by Bar & Bench, aims to prevent Indian regulators from penalising multinational giants based on their worldwide revenue, a measure that could result in exponentially higher and disproportionate fines compared to those based purely on India-specific operations.

This legal confrontation centres on the 2023 amendment to Section 27(b) of the Competition Act, 2002, and the recently issued CCI (Determination of Monetary Penalty) Guidelines, 2024.

The said provision allows the regulator to impose penalties up to 10% of the average of the turnover or income of the past three years for players that have been found to be violating laws.

The matter is listed before the division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela for Wednesday, the report added.

The core of Apple’s petition is the argument that basing penalties on global turnover, which for a company of Apple’s scale runs into hundreds of billions of dollars, is arbitrary and disproportionate to the offense committed within the Indian jurisdiction.

The amendment under dispute specifies that in cases of anti-competitive practices, the CCI may impose a penalty up to 30% of the average relevant turnover for the preceding three financial years.

While the law previously implied 'turnover' relevant for the Indian market, the 2023 amendment broadened this interpretation, potentially encompassing a company's global financial figures.

As Apple frequently faces global scrutiny over its App Store policies, this legal clarification is critical not just for the iPhone maker but for all multinational firms operating in the country.

A favourable ruling for Apple could limit the financial effect of future antitrust actions by the CCI, ensuring penalties remain commensurate with the scale of the alleged harm within India.