The Cupertino-based brand Apple has approached the Delhi High Court to challenge the provision of India’s competition law that permits the Competition Commission of India (CCI) to impose penalties based on a company’s global turnover.
The plea is listed for hearing on Wednesday before a division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela.
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The case marks one of the first major legal challenges to the 2023 overhaul of the Competition Act, which introduced significant changes. The most notable being a new penalty framework allowing the CCI to impose fines based on a company’s global turnover rather than only its India or product-specific revenue.
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Apple's claim
Apple has challenged the 2023 amendment to Section 27(b) of the Competition Act and the 2024 monetary penalty guidelines, which introduced the concept of “global turnover” for calculating fines.
Under Section 27(b), the CCI may impose penalties of up to 10% of the average turnover of the preceding three financial years on enterprises found guilty of abuse of dominance and anti-competitive conduct.
The new amendment has expanded the definition of “turnover” so that penalties can now be based on global revenue from all products and services, rather than just the Indian revenue or the revenue from a specific product.
Prior to this change
Prior to this change, penalties were restricted to “relevant turnover” following a 2017 Supreme Court ruling in the Excel Crop Care case, which held that using total or global turnover had “no rational connection” to the alleged anti-competitive conduct in India and would be disproportionate.
Unlike the EU, where fines begin from the turnover of the specific product, in India the new framework allows global turnover to directly influence the penalty amount. Apple has contended that this could lead to excessive and unfair fines when the conduct in question relates to a small portion of its Indian business only.