Apple case: Delhi High Court gives govt and CCI a week to justify fines based on global turnover

The Delhi High Court on Monday issued notices to the Union government and the Competition Commission of India (CCI), directing them to file an affidavit within a week that explains the rationale behind imposing penalties based on a company's global turnover rather than its India revenue. The court was hearing a plea filed by Apple Inc, which is challenging recent amendments to the Competition Act that allow penalties to be computed on a company’s global turnover.

However, a bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela declined to pass any order on the CCI’s request that Apple be directed to submit its financial details by 8 December. It also did not comment on Apple’s plea seeking protection from potential coercive steps by the regulator, saying it did not wish to express any view at this stage.

The matter is likely to be heard next on 16 December.

The CCI had asked Apple to submit its financial statements by 8 December in connection with the regulator’s ongoing investigation into the company’s App Store payment policies. The investigation stems from complaints filed between 2021 and 2022 by NGOs, Indian startups and Match Group (owner of Tinder, Hinge and OkCupid), alleging that Apple abused its dominant position by requiring developers to use its in-app payment system and pay commissions of up to 30%. The CCI found prima facie evidence of abuse, a finding Apple has denied.

Fearing potential penalty action under the amended provisions, Apple approached the Delhi High Court seeking protection from any coercive steps while its constitutional challenge to the global-turnover penalty framework is decided.

Potential $38-billion fine

In its plea, Apple warned the amended law could expose it to fines of nearly $38 billion if found guilty. The company has challenged the 2023 amendment to Section 27(b) of the Competition Act and the 2024 Monetary Penalty Guidelines, which allow fines of up to 10% of average global turnover of the past three financial years. Apple argued that using global turnover to penalize conduct limited to India was “arbitrary” and “grossly disproportionate”, especially when the alleged behaviour related to only a small fraction of its worldwide business.

Apple also raised concerns about retrospective impact, since fines may be based on turnover from years before the amendment took effect. It said the move contradicted the Supreme Court’s Excel Crop Care ruling of 2017, which held that penalties should be based on relevant turnover, not total global sales.

The petition could become a test case for how India applies its new penalty framework to large multinational tech firms. The outcome of the case may shape future CCI actions and determine how Big Tech is regulated in one of the world’s fastest-growing digital markets.

Attempt to delay, says CCI

Senior advocate Balbir Singh, representing CCI, opposed Apple’s petition, arguing that the company was attempting to delay the proceedings. “We have only asked for India turnover, not global turnover—why are they withholding it?” Singh asked. He told the court that the investigation was complete, the director general’s report had already been sent to Apple, and the company must now respond rather than seek to stall the process.

The CCI argued that fears of massive penalties based on global turnover were overstated, since the Competition Act requires the regulator to first determine the relevant product market and relevant geographical market before calculating any penalties. Singh said global turnover is used only as a last resort, when a company does not provide sufficient information to compute the relevant turnover.

When the bench asked how penalties based on global turnover could be justified when the alleged abuse concerned only one of many products, Singh said the provision was necessary to ensure that entities with no turnover in India or those operating from outside India could still be brought within the CCI’s jurisdiction.

Senior advocate Abhishek Manu Singhvi, Appearing for Apple, said the company could not submit its financial information by 8 December, as requested by the CCI, because the data was not publicly disclosed in India and would need to be collated.

Mint's emails to Apple India and the CCI seeking comment remained unanswered at the time of publishing.

A fine balance

Approaches to determining penalties differ by region. The US generally imposes structural remedies such as a breakup or behavioural restrictions rather than large fines, while the EU can impose fines up to 10% of global turnover but usually begins with revenue linked to the specific market.

For example, the European Commission calculated its €4.34-billion fine against Google in 2018 using revenue from Android search services within Europe, not global revenue, and its €1.84-billion fine against Apple in 2024 amounted to just 0.5% of Apple’s global sales.

India’s framework is closer to the EU’s, though Apple’s business in India is much smaller: the company earned $101.33 billion in Europe in FY24, compared to about $8 billion in India.

However, Apple is growing rapidly in India, driven by strong demand for the iPhone 17, which marks 14 straight quarters of growth. It’s expected to sell 15.5 million iPhones in India in 2025, up 25% from last year, and now holds a 28% share of the country's premium market by value. Apple overtook Samsung to become the world’s largest smartphone brand in Q1 2025 with a 19% global market share, according to Counterpoint Research.