Apple has challenged India’s new competition law before the Delhi High Court, warning that penalties based on global turnover could lead to an unprecedented $38 billion fine. The tech giant argues the amended rules are unconstitutional and unfair, while the CCI insists they are necessary to curb anti-competitive practices.
New Delhi: Apple has moved the Delhi High Court to challenge India’s new competition law rules, saying the updated penalty system could expose the company to an extremely high fine running into nearly $38 billion, which may become one of the biggest corporate penalties ever.
The iPhone maker has filed a constitutional petition questioning the 2024 amendments to the Competition Act, which now allow the Competition Commission of India (CCI) to calculate penalties based on a company’s global turnover instead of only its earnings from India.
In its 545-page petition, Apple has strongly criticised the new provision, calling it
“manifestly arbitrary, unconstitutional, grossly disproportionate, and unjust.”
The company argues that linking penalties to worldwide revenue is unfair and goes beyond the original intention of Indian competition law.
The case is linked to an ongoing CCI investigation that started in 2022 after complaints by Match Group and several Indian startups.
CCI investigators found that Apple was engaging in “abusive conduct” by forcing app developers to use its own in-app payment system and charging commissions of “up to 30%.”
According to the regulator, Apple’s App Store acts as the only channel through which apps can be downloaded on iPhones in India, creating what it described as a “monopoly position.”
The investigation also highlighted that Apple does not allow developers to inform users about other payment options available outside the App Store. This means developers cannot add links or buttons to redirect users to their own websites for payments, where prices might be lower.
The CCI said such practices restrict competition, block rival payment services, and reduce innovation, while potentially making apps more expensive for Indian consumers.
Apple has defended itself by saying it holds a relatively small share of the Indian smartphone market compared to Android, despite its user base growing rapidly over the last five years.
The company also challenged the retrospective application of the amended law, saying it is unfair to apply new rules to past actions. To explain its point, Apple compared the situation to penalising a toy seller’s entire business for a problem linked to just one product line.
The company has also raised objections over the CCI using global turnover as a base for penalties, arguing that such an interpretation goes far beyond the scope of the Competition Act and gives the regulator excessive power.
The Delhi High Court, led by Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, is scheduled to hear the matter on December 3.
Legal experts believe Apple may face difficulties, as the amended law clearly allows penalties to be calculated on worldwide revenue, which strengthens the CCI’s position.
Apple has pointed out that the CCI recently applied the new rules retrospectively in another matter involving a decade-old case, which prompted the company to approach the court now.
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On the other hand, Match Group has supported the global turnover-based fine system, stating that such heavy penalties would act as a strong deterrent against repeated violations.
As of now, the CCI has not passed any final order or imposed any penalty on Apple in this particular case. However, the outcome of this legal battle could have a major impact on how global tech giants are regulated in India and how antitrust penalties are calculated in the future.
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