Apple Moves Delhi High Court Against CCI's 'Global Turnover' Penalty Rule; Claims Exposure To $38 Billion Penalty

Apple INC has moved the Delhi High Court challenging the amendment to the Competition Act, 2002, allowing the Competition Commission of India (CCI) to impose penalties based on a company's global turnover.

A division bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela will be hearing the matter on December 03.

Apple has challenged the 2023 amendment to Section 27(b) of the Competition Act and the 2024 Monetary Penalty Guidelines.

The impugned provision empowers the CCI to impose fines of up to 10% of the average turnover of the preceding three financial years on enterprises found guilty of abuse of dominance or anti-competitive conduct.

In its petition, Apple has said that it could potentially face a fine of up to $38 billion. The plea states that Apple's maximum penalty exposure at the rate of 10% of its average global turnover derived from all of its services globally for three fiscal years to 2024 could be around $38 billion.

It has argued that imposition of such a penalty based on global turnover. would be manifestly arbitrary, unconstitutional, grossly disproportionate and unjust.

It has been submitted that CCI should only impose a penalty based on the Indian revenue of the specific unit which violates the Competition Commission Act.

“It would be arbitrary and disproportionate to levy a penalty on the stationery business's total turnover of 20,000 rupees, when the contravention is only in relation to the toy business that earns 100 rupees,” the plea said.