Tech giant Apple has launched a legal battle against India's competition watchdog in the Delhi High Court, challenging amendments to the country's antitrust laws that could potentially expose the company to a staggering $38 billion penalty. This unprecedented fine would represent one of the largest corporate penalties in global history if imposed.
Constitutional Challenge Against Competition Act
On November 25, Apple filed a comprehensive constitutional challenge against India's 2024 Competition Act amendments. The controversial provisions permit the Competition Commission of India (CCI) to calculate penalties using a company's worldwide revenue rather than limiting fines to India-specific earnings. In its extensive 545-page petition, Apple described the provision as "manifestly arbitrary, unconstitutional, grossly disproportionate, and unjust."
The case has been scheduled for hearing on December 3 before a bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela. However, legal experts suggest Apple faces significant challenges in its fight against established legislative policy.
App Store Practices Under Scrutiny
The legal confrontation stems from a 2022 antitrust investigation initiated by Match Group and several Indian startups. CCI investigators concluded that Apple engaged in "abusive conduct" through its App Store operations in India. The investigation found that Apple's mandatory in-app purchase system, which charges commissions up to 30%, restricted developer choice and created what regulators deemed a monopoly position.
Investigators determined that the App Store serves as the exclusive gateway for distributing apps to iOS users in India. The CCI also raised concerns about Apple's anti-steering provisions that prevent apps from including buttons or external links directing customers to alternative payment systems. These practices, according to the regulator, not only deny market access to competing payment processors but also limit technical innovation by reducing competitive pressure on Apple to improve its own services.
Broader Implications and Legal Arguments
Apple is contesting both the retrospective application of the amendment and the CCI's jurisdiction to consider global turnover for penalty calculations. The company argues that such interpretation exceeds the Competition Act's intended scope. Apple illustrated its position by comparing the situation to penalizing an entire toy business for violations in just one product line.
The tech giant maintains that it holds only a small market share in India compared to Android, though the company's user base has quadrupled over five years. Meanwhile, Match Group has argued that fines based on global turnover would serve as a significant deterrent against repeat violations.
It's important to note that the CCI has not yet issued a final decision or imposed any penalties in the ongoing case against Apple. The outcome of this legal battle could set important precedents for how global technology companies are regulated in one of the world's fastest-growing digital markets.
