The Competition Commission of India (CCI) has strongly defended a new antitrust law that calculates penalties based on a company's global revenue. The regulator told a court that this measure is crucial to deterring violations by multinational corporations. This defense comes as it opposes a legal challenge mounted by technology giant Apple.
Apple's Legal Challenge and CCI's Stance
In November 2023, Apple approached the Delhi High Court seeking to strike down the 2022 competition law amendment. The company argued that the provision, which allows fines to be based on a firm's worldwide turnover, could lead to disproportionate penalties for violations limited to the Indian market. Apple's concern stems from an ongoing CCI investigation into alleged anti-competitive practices related to its App Store.
The CCI, in a filing dated 15 December 2023, provided its detailed rationale. It stated that the law "aligns Indian competition law enforcement with established international practice." The watchdog emphasized that relying solely on India-specific turnover to calculate penalties, especially for global digital firms, fails to deter anti-competitive behavior effectively.
The Core of the Dispute: Deterrence vs. Proportionality
The CCI's position is clear: large penalties based on global revenue are necessary to have a real deterrent effect in complex, cross-border digital markets. "This approach ensures that penalties retain real deterrent value... rather than becoming nominal or easily absorbable for large multinational players," the regulator argued in its court filing, as seen by Reuters.
Apple, however, contends that the law—modeled on European Union practices—is being applied retrospectively. The company is reportedly worried it could face a staggering penalty of up to $38 billion if the global turnover metric is applied in the App Store case, where the CCI found it abused its dominant position. Apple has denied all allegations.
Accusations and Counterclaims
The legal battle has grown contentious. The CCI accused Apple of attempting to "mislead the court." It clarified that while it has the authority to consider global turnover, it only requested India-specific financial details from Apple. The regulator also rejected Apple's claim of retrospective application, stating it always had the power to impose fines of up to 10% of a company's turnover. The legal change merely clarified how 'turnover' is defined.
"Clarificatory provisions operate retrospectively as they explain the true intent of the legislature," the CSI stated. Apple countered that the financial details sought under the new law's framework could still expose it to a significantly higher penalty.
This case has implications beyond Apple. Other multinational companies like Pernod Ricard, Publicis, and Amazon, which are also under CCI scrutiny, could be affected by the court's final ruling. The Delhi High Court is scheduled to hear the matter on 27 January 2024.
