Apple's $38 billion dilemma: Delhi HC hears tech giant's appeal against antitrust agency; what's at stake?

The Delhi High Court on Monday took up a petition filed by Apple challenging the recent amendments to the Competition Act.

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela have taken up the case, which challenges the amendment t the Act allowing antitrust regulator Competition Commission of India (CCI) to impose penalties on companies for violations on the basis of its global turnover.

During the hearing, advocate Abhishek Manu Singhvi, who appeared for Apple, said that the company wants interim proceedings for no coercive steps.

“They (CCI) have asked us for financial details. They have said that by December 8, give the financial details and a response to the DG,” he said.

However, advocate for the CCI argued that Apple has approached with this case at this time to divert attention from the antitrust probe against App Store.

“For major tech companies, a fine of $200 million or $300 million doesn't matter... If there is someone sitting outside India, how their practices would have impact on India,” the lawyer for CCI said.

What's at stake for Apple?

Apple filed a petition at the Delhi High Court, saying that the change puts at stake $38 billion, or 10% of its global turnover, if the provision is implemented on its ongoing case with the regulator regarding the App Store antitrust probe.

Over the past three financial years, Apple has had an annual turnover of around $380 billion.

Since 2022, Tinder-owner Match and Indian startups have been locked in an antitrust battle with Apple at the CCI, where investigators last year issued a report saying the US smartphone company had engaged in "abusive conduct" on the apps market of its iPhone Operating System, iOS.

In its petition, Apple called the amendments “manifestly arbitrary, unconstitutional, grossly disproportionate, and unjust.”

The company is asking judges to declare as illegal the 2024 law that allowed the CCI to use global turnover, not just that in India, when calculating penalties.

Apple cited the CCI's use of the new rules for the first time on November 10 in an unrelated case, where they were retrospectively applied to a violation by the affected company a decade earlier.

Apple has “no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them,” it argued.

In its court filing, Apple argued India should only impose a penalty based on the Indian revenue of the specific unit which violates antitrust law, giving an example of a toy seller running a stationery business.

(With Reuters inputs)