Delhi HC to hear Apple's plea against CCI next month
What's the story
Apple has challenged a recent amendment to the Competition Act, 2002, which allows the Competition Commission of India (CCI) to impose penalties based on a company's global turnover. The tech giant's plea was scheduled for hearing at Delhi High Court today. However, Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela could not take it up due to lack of time. It is now set for December 3. The Union of India and CCI are respondents in this case.
Legal challenge
Apple challenges 2023 amendment to Competition Act
Apple's lawsuit contests the 2023 amendment to Section 27(b) of the Competition Act and the 2024 Monetary Penalty Guidelines. The amendment introduced global turnover as a basis for calculating penalties. Under this provision, CCI can impose fines up to 10% of a company's average turnover over the last three fiscal years if it is found guilty of anti-competitive conduct or abuse of dominance.
Expanded definition
Amendment expands scope of 'turnover' for penalties
The amendment significantly broadens the definition of "turnover," allowing fines to be calculated on global revenue from all products and services, not just Indian revenue or revenue from the relevant product segment. This goes against a Supreme Court ruling in 2017 which said penalties should only be based on "relevant turnover." The new model aligns India with jurisdictions like the EU and UK, where global turnover is used for penalty ceilings.
Penalty apprehensions
Apple's concerns over potential penalties
Apple fears that the new rule could lead to disproportionate and excessive penalties, even in cases where allegations are related to a small part of its Indian business. The issue has major implications for Big Tech companies such as Google, Amazon, and Meta. These firms now face the risk of much higher financial liability in ongoing CCI probes into app store rules, bundling practices, and digital advertising markets.
Potential impact
Petition could impact future CCI investigations
Apple's petition will test how India implements its new global turnover penalty regime on multinational corporations with large international revenues. The outcome is likely to have huge implications for ongoing and future CCI investigations, especially those involving large technology platforms.