Apple Vs CCI: Delhi HC Questions Global Turnover Penalty Rule

SUMMARY

During the hearing, Apple argued that penalties must be linked only to the revenue from the product under investigation, and cited a 2017 SC ruling that took the same view

However, CCI said that the provision is needed to ensure that foreign companies with little or no India revenue can still be penalised if they engage in anti-competitive conduct

Apple is challenging Section 27(b) of the Competition Act, which allows CCI to impose fines of up to 10% of a company’s average global turnover for the last 3 years

The Delhi High Court (HC) has reportedly directed the corporate affairs ministry and the Competition Commission of India (CCI) to respond within a week to Apple’s petition challenging India’s antitrust laws.

As per news agency PTI, a bench, comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, questioned the government on why the turnover of other products should be counted if the alleged abuse relates to a specific product.

This came as the HC was hearing Apple’s plea challenging Section 27(b) of the Competition Act and recent CCI guidelines, which allow the watchdog to impose fines of up to 10% of a company’s average global turnover for the last three years.

During the hearing, Apple reportedly argued that penalties must be linked only to the revenue from the product under investigation, and cited a 2017 Supreme Court ruling that took the same view.

Defending the rule, the CCI reportedly, however, said that the provision is needed to ensure that foreign companies with little or no India revenue can still be penalised if they engage in anti-competitive conduct affecting the Indian market. The watchdog claimed that Apple’s plea is meant to delay an ongoing CCI probe into the company’s App Store practices.

After hearing both sides, the HC listed the matter for the next hearing on December 16.

In its petition, Apple has claimed that the amendments and CCI guidelines could expose it to penalties of around $38 billion, even if the alleged issue relates to only one product in India. The big tech juggernaut has also challenged a March 2025 CCI order asking it to submit audited financial statements for FY22, FY23 and FY24.

This is not the first time that Apple has landed in the cross hairs of the competition watchdog. The CCI first opened an investigation into the company in 2021 over claims that Apple abused its dominance in the app market and forced developers to use its in-app payments system with commissions of up to 30%. The probe has dragged on for years amid disputes.

In August 2024, the CCI recalled investigation reports after Apple alleged its confidential data had been shared with rivals, including global matchmaking giant and Tinder parent Match. At the time, the iPhone maker also sought penalties against the original complainant, Together We Fight Society, for not destroying earlier reports, but the CCI refused and kept the probe going.

The watchdog later created a “confidentiality ring”, after which Apple submitted audited financials for FY22, FY23 and FY24. Apple has repeatedly denied wrongdoing, saying it holds a small share of India’s smartphone market, which is dominated by Android.

Apple is among several global tech firms under CCI’s lens. In 2022, the regulator fined Google over INR 2,200 Cr for abusing its dominance with regards to its Play Store policies and Android devices market.

Last year, Meta was also fined INR 213.14 Cr over issues linked to WhatsApp’s 2021 privacy policy update.