Delhi High Court directs Centre and CCI to place their reply on record in Apple Inc’s plea challenging audit orders and Competition Act amendments. Apple argues penalties based on global turnover could reach USD 38 billion.
New Delhi: The Delhi High Court on Tuesday directed the Centre and the Competition Commission of India (CCI) to place on record their responses in a petition filed by tech giant Apple Inc challenging CCI’s order requiring the company to furnish its audited financial statements for multiple years.
Apple has also raised objections to the amendment of the Competition Act, 2002, which allows the CCI to impose penalties based on a company’s global turnover rather than turnover limited to India.
A bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela was informed that the Ministry of Corporate Affairs and CCI had filed their counter affidavits on Monday in response to Apple’s petition, but the documents were not yet on record.
The bench directed,
“Counter affidavit has been filed by the respondents on Monday. Let steps be taken to bring the counter affidavit on record,”
The court also granted Apple time to file its rejoinder to the replies submitted by the respondents and listed the matter for further hearing on January 27.
During the proceedings, senior advocate Abhishek Singhvi, representing Apple Inc, informed the court that the company had received a copy of the joint reply of the ministry and CCI only last night and requested additional time to file its rejoinder.
Meanwhile, the Alliance of Digital India Foundation, which had originally filed the complaint, informed the court that it had submitted an impleadment application in the case. The court asked the parties to file any objections to the impleadment application within four weeks.
On December 1, the Delhi High Court had issued notice to the Ministry of Corporate Affairs and CCI on Apple’s petition and asked them to file their reply affidavits within a week.
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In its petition, Apple highlighted that the amended penalty provisions now allow the CCI to consider turnover generated from all products and services of the enterprise globally, rather than only the turnover from the affected “relevant product or services” in India.
The company argued that under the new provisions, even turnover from territories outside India could be considered while computing penalties, instead of focusing solely on the “relevant geographic market” within India.
The plea stated that the amended provisions empower the CCI to impose fines on companies found guilty of abusing dominance or engaging in anti-competitive conduct of up to 10 per cent of their average turnover over the preceding three financial years.
Apple said its maximum penalty exposure, based on 10 per cent of its average global turnover for all products and services between 2022 and 2024, could be around USD 38 billion.
The court had sought clarification from the government on how penalties on global turnover could be justified even if the abuse of dominance related to only one of the company’s many products.
Senior advocate Balbir Singh, representing the government and CCI, responded,
“It was necessary so that an entity with no turnover in India can also be brought under the CCI net.”
He further claimed that Apple had filed the petition to “scuttle” the CCI probe against it, adding that the authorities had requested only India turnover and not global turnover.
He also stated that Apple had been asked to submit the turnover in India by December 8, after which it would take 3-4 weeks to examine the information.
