Global turnover penalty illegal, not delaying CCI case: Apple tells HC

Apple is contesting rules that allow the Competition Commission of India (CCI) to impose penalties retrospectively based on a company's global turnover

Tech giant Apple told the Delhi High Court that it has challenged India’s competition law because it allows penalties to be imposed retrospectively on a company’s global turnover, which Apple said is illegal, Bar and Bench reported.

 

The company is contesting rules that allow the Competition Commission of India (CCI) to impose penalties retrospectively based on a company’s global turnover.

 

Apple defends court challenge

 

In its submission, Apple said that its petition is neither academic nor premature, as claimed by the CCI. Instead, it is a constitutional challenge against penalty provisions that “are arbitrary, unconstitutional, grossly disproportionate and unwarranted”, the news report said.

 

“The petitioners have no choice but to bring this constitutional challenge now to avoid a retrospective imposition of penalty against them based on global turnover derived from all products/services in terms of the Impugned Amended Penalty Provisions. Such an outcome would be manifestly arbitrary, unconstitutional, grossly disproportionate, unjust and totally unwarranted...," Apple said.

 

These arguments were made in a rejoinder filed by Apple in response to a joint affidavit submitted by the Central government and the CCI opposing the company’s writ petition.

 

Laws under challenge

 

Apple has questioned the validity of Section 27(b) of the Competition Act, 2002. It has also challenged the Competition Commission of India (Determination of Turnover or Income) Regulations, 2024, and the Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024, the news report said.

 

Under these provisions, the CCI can impose penalties of up to 10 per cent of the average global turnover or income of an enterprise for the past three years if it is found guilty of abusing its dominant position or entering anti-competitive agreements.   

 

App Store probe and timing of plea

 

The CCI is currently examining allegations of anti-competitive practices by Apple in the App Store market. Apple said it approached the court at this stage because, in March 2025, the CCI directed it to submit audited financial statements for the financial years 2022, 2023 and 2024.

 

According to Apple, this raised a real risk of penalties being imposed retrospectively using its global turnover.

 

Government questions Apple’s conduct

 

In its affidavit, the government argued that Apple’s petition is not maintainable and alleged that the company had not approached the court with "clean hands". It claimed that Apple had tried to derail the CCI’s investigation.

 

Apple denied these allegations, saying its constitutional challenge is not meant to delay or block the proceedings before the regulator.

 

Apple also argued that the CCI itself has admitted that the new penalty provisions are not merely clarificatory but expand the scope of punishment under the Competition Act. This creates a reasonable fear of retrospective fines based on global turnover, the company said.

 

The company further stated that the law contradicts the Supreme Court’s ruling in the Excel Crop case, granting unchecked power and discretion to the CCI.

 

CCI rejects Apple’s request to pause case

 

Last week, the CCI rejected Apple’s attempt to pause the antitrust proceedings. According to a report by Reuters, the regulator warned that it may proceed with the case, accusing Apple of delaying the investigation.

 

The watchdog said Apple had taken over a year to submit responses and information sought by investigators, despite receiving multiple extensions.

 

Reuters reported that Apple has estimated it could face penalties of up to $38 billion if the CCI calculates fines based on global turnover after finding abuse of dominance in the App Store market.

 

A confidential CCI order dated December 31 showed that Apple had sought a complete halt to the antitrust case until the penalty issue was decided. The regulator turned down this request.

 

The CCI also said it had asked Apple in October 2024 to file objections to the investigation findings and submit financial details needed for penalty assessment, noting that repeated extensions had already been granted.

 

(With agency inputs)