Why Apple challenged India's competition law in Delhi HC
What's the story
Apple has filed a petition with the Delhi High Court, challenging certain provisions of India's competition law. The tech giant has taken issue with the Competition Commission of India (CCI) being allowed to impose penalties based on a company's "global turnover." The case will be heard by Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela tomorrow.
Legal challenge
Apple challenges 2023 amendment to Competition Act
Apple has named the Union of India and the CCI as respondents in its petition. The company is challenging the 2023 amendment to Section 27(b) of the Competition Act, 2002, as well as the CCI (Determination of Monetary Penalty) Guidelines, 2024. The US-based tech giant contends that these amendments introduced "global turnover" into their scope.
Penalty provisions
Section 27(b) of Competition Act allows penalties for certain practices
Section 27(b) of the Competition Act permits the CCI to impose penalties on enterprises or groups of enterprises up to 10% of their average turnover or income over the last three years. This is for abusing a dominant position or entering into anti-competitive agreements. The provision says that all parties to such an agreement can be penalized, as well as those who have abused their dominant position.
Definition expansion
2023 amendment expands definition of 'turnover'
The 2023 amendment to Explanation 2 of Section 27(b) of the Act has expanded the definition of "turnover" to include "global turnover." This means that penalties can be imposed not just on a company's domestic revenue but also its international earnings. This change is one of the main reasons behind Apple's legal challenge against India's competition law.