Apple Challenges CCI’s Global Turnover Penalty Powers in Delhi HC
Apple has filed a legal petition with the Delhi High Court contesting a recent amendment to India’s Competition Act that permits the Competition Commission of India (CCI) to levy penalties based on a company’s entire global revenue.
Key Takeaways
- Apple is challenging an amendment to Section 27(b) of the Competition Act.
- The change allows CCI to impose fines up to 10% of a company’s global turnover.
- Apple estimates a potential penalty of around $38 billion.
- The hearing is expected on December 3 before a Division Bench.
Legal Challenge Details
The tech giant is specifically contesting the amendment to Section 27(b) and the 2024 monetary penalty guidelines. Under these provisions, companies found violating competition rules face fines up to 10% of their average global turnover from the preceding three financial years.
A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela is scheduled to hear Apple’s petition.
Ongoing CCI Investigation
The legal move comes amid an ongoing CCI probe into Apple’s App Store practices over alleged anti-competitive conduct. Apple decided to challenge the law after the CCI directed the company in March 2024 to submit audited financial statements for FY 2022, 2023, and 2024.
The company expressed concerns about facing substantial retrospective penalties, similar to those imposed by the CCI on another entity on November 10.
Apple’s Legal Arguments
Apple contends that calculating penalties based on global turnover is arbitrary, unconstitutional, and disproportionate. The company estimates that a 10% penalty on its average global turnover for FY 2022-2024 could reach approximately $38 billion.
Apple maintains that the amendments, which became effective in March 2024, should apply prospectively rather than retrospectively. The matter is now likely to be heard on December 3.
