The Delhi High Court issued notice to the Central government and CCI on Apple’s plea challenging penalties on global turnover. CCI argued the law ensures even companies with no base in India can be penalised for anti-competitive practices.
New Delhi: The Delhi High Court on Monday issued notice to the Central government and the Competition Commission of India (CCI) on a petition filed by Apple challenging the law that allows penalties to be calculated on a company’s “global turnover” for anti-competitive practices.
A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela asked the government and the CCI to submit their replies within one week. The Court then listed the case for the next hearing on December 16.
The Bench said,
“Issue notice. Let affidavit in reply be filed by the respondents in a week. Rejoinder to be filed by the petitioners. On December 16, the matter will be placed high on board.”
During the hearing, the High Court questioned the logic of imposing penalties on the entire global turnover of a company even when the alleged abuse of dominance relates to only one product.
The Bench asked the government,
“Please tell us, prima facie, if the CCI initiates proceedings in relation to one product. How can you take into account turnover with respect to other products? Does it not appear very unreasonable to include other products?”
Senior Advocate Balbir Singh, appearing for the CCI, defended the law and said it was meant to ensure that companies with no base or turnover in India could still be penalised for anti-competitive conduct affecting Indian markets.
He said,
“The object of this is the global turnover concept has been taken in those circumstances where you don’t have a base in India, how do you punish them?”
He also argued that Apple had filed this petition only to obstruct the CCI’s ongoing probe, claiming,
“For major tech companies, a fine of US$ 200 million or US$ 300 million doesn’t matter… If there is someone sitting outside India, how would their practices have an impact on India? Apple has approached the court at this time to scuttle the proceedings before the CCI.”
He further added,
“There was a shortfall in law and the object of this is the global turnover concept has been taken into account in those circumstances where you don’t have a base in India, how do you punish them? We are following the relevant turnover concept, but the global turnover concept is for a very different reason where you don’t have a presence in India.”
Responding to the Court’s questions, Singh said that the guidelines already reflect this distinction, and when the Court remarked,
“So, you could have said that,”
he replied,
“We have,”
referring to the CCI guidelines.
Apple has challenged Section 27(b) of the Competition Act, 2002, along with the Competition Commission of India (Determination of Turnover or Income) Regulations, 2024 and the Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024.
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These legal provisions allow the CCI to impose penalties of up to 10% of the average global turnover or income of a company for anti-competitive agreements or abuse of dominant position.
Apple has also challenged the CCI’s March 3, 2025 order that directed the company to submit its audited financial statements for 2022, 2023, and 2024. According to Apple, if the global turnover rule is applied, the company may face a penalty of nearly US $38 billion, which it says is excessively harsh.
The CCI is currently examining allegations against Apple regarding anti-competitive conduct in its App Store ecosystem.
Apple said it approached the High Court now because of the CCI’s March order seeking financial documents, and because the CCI recently imposed retrospective penalties on another company in a different case decided on November 10.
In its petition, Apple argued that imposing penalties based on global turnover is
“manifestly arbitrary, unconstitutional, grossly disproportionate, unjust and totally unwarranted”.
Apple said the amended provisions wrongly allow the total turnover from all products to be included while calculating penalties rather than the relevant turnover from the specific product involved.
According to Apple, these amendments are a “patently unconstitutional and an impermissible legislative abrogation” because they change the scope of the penalty provision indirectly through an explanation, instead of amending the main section itself.
Apple also relied heavily on the Supreme Court’s 2017 decision in the Excel Crop case, which held that penalties must be calculated only on the “turnover generated from the particular infringing good/service related to the alleged contravention” and not on the company’s total turnover.
Senior Advocate Abhishek Manu Singhvi, appearing for Apple, argued that fines should be limited to the Indian turnover of the specific product for which dominance is alleged.
He told the Court that penalties for global turnover would have a massive impact and said,
“The idea is usually, in a market, there are multi-product companies and the companies may have a dominant position with respect to product A. Usually, you can be penalised with respect to that product. If the sale is ₹100 Rupees, you can be penalised a portion of that. That will be affected for turnover across Indian but never for global turnover. My turnover in England does not affect turnover in India. My case here starts in 2021. This amendment is made effective from March 6, 2024. The effect is humongous.”
He referred to the Excel Crop judgment and said,
“You cannot remove the basis of that judgment by adding an explanation. The Supreme Court said that the penalty cannot be disproportionate. It is part of Article 14 now. In the judgment, the Supreme Court said that if we adopt the criteria of total turnover, it would bring ‘shocking results’. It has simply been changed by the explanation. Section 27 remains the same, but they have substantively changed it by adding an explanation, saying you can be fined for global turnover.”
The High Court again questioned the CCI’s stand and asked how a penalty could include turnover from unrelated products. It repeated its earlier concern by asking,
“Please tell us, prima facie, if the CCI initiates proceedings in relation to one product. How can you take into account turnover with respect to other products? Does it not appear very unreasonable to include other products?”
Before the High Court, Apple is represented by a J Sagar Associates team led by Partner Nisha Kaur Uberoi. Along with Balbir Singh, Senior Advocate Samar Bansal represented the CCI. The Central government was represented by Central Government Standing Counsel (CGSC) Ashish Dixit.
Case Title:
Apple Inc & Anr v. Union of India & Anr
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