Apple is reportedly challenging the legality of India’s revised antitrust penalty law in the Delhi High Court, arguing that the new rules could expose the company to a potential fine of up to $38 billion. This marks the first constitutional challenge to a provision allowing the Competition Commission of India (CCI) to calculate penalties based on a company’s global turnover, rather than its Indian revenue. Apple’s court documents, totaling 545 pages, have not been made public.
The 2024 legislative changes allow the CCI to impose fines using global turnover as a basis, shifting from previous practice focused on Indian revenue. Apple contends that this approach is “arbitrary and disproportionate”, as it could result in much larger penalties for multinational firms, as mentioned in a report in Reuters. The company’s “maximum penalty exposure” at a rate of 10 per cent of average global turnover for the three fiscal years to 2024 is estimated at around $38 billion.
Apple says it has “no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them”, expressing concern that the amended law could be applied to alleged violations before its enactment, the report added. The company cited a November 10 case where the CCI used the law retrospectively in an unrelated matter to highlight the risks it faces.
Apple maintains it is a smaller player in the Indian market compared to Android, though Counterpoint Research notes Apple’s smartphone base has quadrupled in the country over the past five years. The company argues that fines should be linked only to the turnover generated by the specific business unit found in violation, using the example of a stationery and toy business to illustrate the disproportionate impact of global turnover-based penalties.
The CCI previously found Apple had restricted third-party payment processors from facilitating in-app purchases, with fees reportedly reaching up to 30 per cent. Apple’s opponent Match submitted that a fine based on global turnover could “act as a significant deterrent against recidivism”. Apple, however, described such a penalty as “manifestly arbitrary, unconstitutional, grossly disproportionate, unjust.”
Apple’s petition seeks a judicial declaration that the amended law is illegal. The case is scheduled for hearing on December 3. Apple and the CCI have not publicly commented on the proceedings.
In the broader context, the European Union also imposes fines of up to 10 per cent of global turnover for antitrust violations. The proceedings in India will be closely watched by multinational companies operating in the country.
