Delhi High Court Seeks Centre, CCI Reply to Apple Plea on Global Turnover Fines

The Delhi High Court has asked the Union government and the Competition Commission of India (CCI) to respond to Apple’s challenge to India’s new antitrust penalty rules, which allow fines to be calculated on a company’s global turnover and, by the iPhone maker’s own estimate, could expose it to a penalty of up to $38 billion.

A bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela issued notice on Apple’s petition on Monday, 1 December, and listed the case for further hearing on 16 December.

Apple has gone to court against the 2024 changes to the Competition Act and related CCI penalty guidelines, which let the regulator base fines on average global turnover from all products and services over the previous three financial years, rather than only on India-specific “relevant turnover.”

Apple argued that using worldwide revenue for conduct limited to the Indian market is arbitrary, unconstitutional and disproportionate, and said that a 10% penalty on its average global turnover for fiscal years 2022 to 2024 would come to around $38 billion.

Legal experts said those arguments rest heavily on proportionality and on how ‘turnover’ should be construed under the Act.

Advocate Prakash Sinha, Partner at Finjuris LLP, said Apple’s central concern is that it could face a penalty of up to 10% of its global turnover under Section 27(b) of the Act. Its case is that the amended provision, which took effect only from March 2024, cannot be applied retrospectively, and that calculating penalties on worldwide revenues is disproportionate.

According to Sinha, Apple has argued that such an approach is “manifestly arbitrary, unconstitutional, grossly unjust, and unwarranted,” especially since the Supreme Court’s Excel Crop Care ruling confined penalties to the ‘relevant turnover’ of infringing products or services. He added that, on a plain reading of Sections 1, 3, and 4, ‘turnover’ refers to turnover in India.

Under the Competition (Amendment) Act 2023, which came into force for penalty provisions in March 2024, CCI can impose fines of up to 10% of an enterprise’s average turnover or income for the previous three financial years. Subsequent CCI penalty guidelines define turnover for this purpose to include global revenues from all products and services, unless the regulator decides otherwise.

This marks a shift from the position that flowed from the Supreme Court’s 2017 Excel Crop Care ruling, which read “turnover” in Section 27 of the Competition Act as “relevant turnover” linked to the infringing product, in line with the constitutional principle of proportionality.

The CCI has told the court that Apple’s petition is an attempt to stall an ongoing antitrust probe into its App Store rules.

The investigation began after complaints from Match Group and Indian non-profit Together We Fight Society, which argued that Apple’s fee of up to 30% on in-app purchases and mandatory use of its in-app payment system hurt competition.

A confidential CCI report dated 24 June 2024 found that Apple misused its market power and that the App Store is effectively unavoidable for iOS developers, forcing them to accept terms such as mandatory use of Apple’s billing system, Reuters reported last year.

The CCI has not yet issued a final order on Apple’s liability or on any penalty. For now, it has asked Apple to disclose its India-specific turnover, which the company has been told to provide by 8 December, although Apple has indicated it will seek more time. The High Court has not stayed the CCI proceedings.

Legal analysts said the case will decide how far India can go in using global turnover to raise antitrust penalties, particularly for multinational tech platforms that run integrated global businesses.

A ruling that fully upholds the new framework would position India among the tougher antitrust jurisdictions for firms such as Google, Amazon and Meta, which already face several competition cases here.

Advocate and company secretary C. S. Manish Singh, founder of V. Ashok & Associates, a law firm specializing in corporate law, compliance, and legal services, said the outcome will also shape the exposure of other tech firms already before the CCI.

If the court narrows the rule or reads in stronger proportionality safeguards, he said, it could keep penalties closer to market-specific turnover.

If it upholds the framework as it stands, it would give CCI much more leverage in future cases but also raise concerns among global companies about unpredictable, very large fines, he added.