Apple moves Delhi HC against CCI's power to levy fines on global turnover

In its plea, Apple is contesting amendments introduced in 2023 to Section 27(b) of the Competition Act, as well as the CCI's 2024 guidelines on determining monetary penalties

Global technology major Apple has filed a petition in the Delhi High Court challenging recent changes to India’s competition law that permit the Competition Commission of India (CCI) to calculate penalties on the basis of a company’s "global turnover", Bar and Bench reported on Tuesday.

 

A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela will hear the matter on Wednesday.

 

In its plea, the California-headquartered technology major is contesting amendments introduced in 2023 to Section 27(b) of the Competition Act, as well as the CCI’s 2024 guidelines on determining monetary penalties, reported Bar and Bench. It has named the Union government and the CCI as respondents. 

 

Under Section 27(b), the CCI may impose financial penalties of up to 10 per cent of the average turnover or income of the preceding three financial years if an enterprise or a group of enterprises is found to have abused its dominant position or engaged in anti-competitive practices.

 

The guidelines passed last year broadened the explanation for the section, making clear that “turnover” would be interpreted as "global turnover", significantly expanding the potential financial exposure of multinational corporations operating in India. 

"Where the determination of relevant turnover is not feasible..., the Commission may consider the global turnover, derived from all products and services, for the purpose of determination of the amount of penalty," the CCI guidelines say. 

  This development comes nearly two months after the CCI asked Apple to submit its response or objections to the Commission’s final investigation report on alleged abuse of dominance in the app store market. The regulator had also directed the company to provide detailed financial statements for its global and India operations for 2022–24 to help determine any potential penalty, according to a Business Standard report from September.