Delhi High Court issues notice on Apple’s plea against global turnover penalty rule; CCI says company ‘trying to stall proceedings’
The Competition Commission of India has sought details from Apple regarding its Indian turnover, which it has not yet provided to the regulatory body, even as it is expected to furnish them by December 8.
Under the amended law, based on Apple’s average global turnover from all its services over three fiscal years up to 2024, the tech giant’s “maximum penalty exposure” at a 10 per cent rate could amount to around $38 billion. (File) The Delhi High Court Monday issued notice on a plea filed by Apple Inc challenging the amendment to the Competition Act in 2024, allowing the Competition Commission of India (CCI) to impose penalties based on a company’s global turnover.
As the technology giant challenged the amendments to the Competition Act, the Competition Commission of India said Apple’s petition is only an attempt to stall the antitrust proceedings it is currently facing before the forum.
A key aspect of Apple’s challenge to the amendments is the change in the calculation of antitrust penalties, aimed at preventing unfair business practices, including the establishment of monopolies.
While before the amendments the penalty was calculated from “relevant turnover”, which meant turnover generated from a particular infringing goods or service in relation to the alleged contravention by an enterprise, the amendment now includes the imposition of a penalty based on global turnover.
Under the amended law, based on Apple’s average global turnover from all its services over three fiscal years up to 2024, the tech giant’s “maximum penalty exposure” at a 10 per cent rate could amount to around $38 billion.
On Monday, CCI’s counsel said before a Division Bench of Chief Justice D K Upadhyaya and Justice Tushar Rao Gedela that “penalty is only one consequence, which is very insignificant when we look at these tech companies because I don’t think a fine of ($) 200 million is going to matter.”
Apple is already under probe by CCI since 2022, when it had ordered an investigation into its App Store practices based on separate complaints filed by Tinder-owner Match Group and a little-known, non-profit group called Together We Fight Society (TWFS), both of which argued that Apple’s fee of up to 30 per cent on in-app purchases hurt competition by raising costs for app developers and customers.
In 2024, CCI found that Apple exploited its dominant position in the apps market. In a confidential report on June 24, 2024, CCI said, “Apple App Store is an unavoidable trading partner for app developers, and resultantly, app developers have no choice but to adhere to Apple’s unfair terms, including the mandatory use of Apple’s proprietary billing and payment system.”
At present, CCI has sought details from Apple regarding its Indian turnover, which it has not yet provided to the regulatory body, even as it is expected to furnish them by December 8.
Senior Advocate Abhishek Manu Singhvi, appearing for Apple, however, informed the court that it will seek an extension from the CCI. “I [Apple Inc] can’t give it [the data of Indian turnover] by December 8 anyway. It’s not publicly available; it has to be collated.”
Pointing out before the court that the iPhone maker has already sought six extensions, CCI added, “Today, (Apple) coming to court, when the preliminary report is out after investigation, they are coming to court to stall (the CCI proceedings).”
The bench issued notice on Apple’s plea, seeking responses from the Centre through its Ministry of Corporate Affairs and regulator CCI.
The court will hear the matter next on December 16.
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