The Delhi High Court has stepped into a high-stakes legal battle between Apple Inc. and India's competition watchdog. On Monday, the court issued a formal notice on a petition filed by the technology giant, challenging recent amendments to the Competition Act that allow penalties based on a company's worldwide revenue.
CCI Accuses Apple of Stalling Antitrust Proceedings
During the hearing before a Division Bench comprising Chief Justice D K Upadhyaya and Justice Tushar Rao Gedela, the Competition Commission of India (CCI) strongly opposed Apple's move. The regulator's counsel argued that the petition was merely an attempt to delay the ongoing antitrust proceedings against the company. The CCI pointed out that Apple has already sought six extensions in the case and is now approaching the court when a preliminary investigation report is already prepared.
The CCI's stance was clear: "Today, (Apple) coming to court, when the preliminary report is out after investigation, they are coming to court to stall (the CCI proceedings)." The regulator's counsel also downplayed the impact of financial penalties on large tech firms, stating, "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."
The Heart of the Matter: A Potential $38 Billion Exposure
The core of Apple's legal challenge revolves around a crucial change in how antitrust penalties are calculated in India. Previously, fines were based on "relevant turnover"—the revenue generated specifically from the infringing product or service. The 2024 amendment to the Competition Act now empowers the CCI to impose penalties based on a company's global turnover from all its services.
This change dramatically increases Apple's potential liability. According to estimates presented, based on Apple's average global turnover over the three fiscal years leading up to 2024, the company's "maximum penalty exposure" at a rate of 10% could reach a staggering $38 billion. This monumental figure underscores why Apple is legally contesting the amendment's applicability.
Ongoing Probe and Missing Indian Turnover Data
The backdrop to this legal fight is an antitrust investigation that has been ongoing since 2022. The CCI initiated the probe following complaints from Tinder-owner Match Group and the non-profit Together We Fight Society (TWFS). The allegations center on Apple's App Store practices, particularly its fee of up to 30% on in-app purchases, which critics argue harms competition by increasing costs for developers and consumers.
In a significant development in June 2024, the CCI, in a confidential report, found that Apple exploited its dominant position in the Indian apps market. The report stated, "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."
Amidst this, the CCI has sought details of Apple's Indian turnover, which the company has yet to provide. While the deadline was set for December 8, Apple's senior advocate, Abhishek Manu Singhvi, informed the court that the company would seek an extension. "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," Singhvi stated.
The Delhi High Court has now sought responses from both the Central Government, represented by the Ministry of Corporate Affairs, and the CCI. The next hearing in this pivotal case is scheduled for December 16.
