The Delhi High Court has commenced hearing a significant legal challenge from tech giant Apple Inc. against recent amendments to India's competition law. The case, which could have far-reaching implications for multinational corporations, centers on the government's power to impose penalties based on a company's worldwide revenue.
Apple's Constitutional Challenge Against Penalty Rules
A division bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela took up the petition on Monday. Apple is contesting amendments to the Competition Act that empower the Competition Commission of India (CCI) to calculate antitrust fines using a company's global turnover, not just its revenue generated within India.
Representing Apple, senior advocate Abhishek Manu Singhvi informed the court that the company is seeking interim protection from any coercive action. He stated that the CCI has demanded financial details and a response from Apple by December 8 as part of an ongoing probe related to the App Store.
In its petition, Apple has labeled the amendments as "manifestly arbitrary, unconstitutional, grossly disproportionate, and unjust." The company argues that India should only levy fines based on the Indian revenue of the specific business unit found to have violated antitrust laws, using the analogy of a toy seller being penalized only for its toy business, not an unrelated stationery venture.
The Stakes: A Potential $38 Billion Liability
The financial implications for Apple are colossal. The company contends that the new provision puts at risk a staggering $38 billion, equivalent to roughly 10% of its global turnover. This calculation is based on Apple's annual turnover, which has averaged around $380 billion over the past three financial years.
The legal battle stems from an ongoing antitrust investigation into Apple's App Store practices. Since 2022, the CCI has been examining complaints from companies like Tinder-owner Match Group and several Indian startups. Last year, CCI investigators issued a report alleging that Apple engaged in "abusive conduct" within the iOS app marketplace.
Apple's legal filing reveals a sense of urgency, prompted by the CCI's first use of the new rules on November 10 in an unrelated case. The company noted that the regulator applied the rules retrospectively to a violation that occurred a decade ago. Apple stated it has "no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them."
CCI's Counter and the Broader Regulatory Clash
The CCI's legal counsel presented a contrasting viewpoint in court. The advocate argued that Apple's timing in filing the petition was a strategic move to divert attention from the substantive antitrust probe into the App Store. The counsel emphasized the need for regulations that have a real deterrent effect on major technology firms.
"For major tech companies, a fine of $200 million or $300 million doesn't matter... If there is someone sitting outside India, how their practices would have impact on India," the CCI's lawyer contended, defending the global turnover provision as necessary for meaningful enforcement.
This case underscores the escalating tensions between global technology behemoths and regulatory authorities in India, one of the world's largest and fastest-growing digital markets. The outcome is poised to establish a critical legal precedent, defining how India's antitrust laws are applied to multinational corporations with complex global operations.
The Delhi High Court's eventual ruling will not only determine the fate of Apple's specific challenge but will also shape the regulatory landscape for all foreign companies operating in India, balancing the need for robust market oversight with concerns over potentially punitive and disproportionate financial penalties.
