Apple moves to Delhi High Court against global turnover-based penalties on multinationals under Competition Act

Apple moves to Delhi High Court against global turnover-based penalties on multinationals under Competition Act

Apple has filed a petition in the Delhi High Court challenging India's approach of calculating penalties for multinationals based on their global turnover under the Competition Act. The case stems from a 2023 amendment to Section 27(b) of the Competition Act, 2002, and related guidelines issued in 2024, which empower the Competition Commission of India (CCI) to compute fines up to 10% of a company’s global revenue for anti-competitive practices, instead of limiting penalties to India-related operations.​

Key Points of Apple's Legal Challenge

• Apple argues that the “global turnover” clause is arbitrary and leads to disproportionately high penalties for offenses with a limited business impact in India, especially given Apple's vast international revenues.​

• The company has called this framework unfair compared to the prior regime, which penalized only the “relevant turnover” accrued from Indian operations of the product or service under investigation.​

• Apple’s petition names the Union of India and the CCI as respondents and is being heard by the Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela.​

Details of the Contested Provisions

• Under Section 27(b) and the 2024 guidelines, the CCI can impose penalties up to 10% of the average turnover or income of the preceding three years for enterprises found abusing a dominant position or engaging in anti-competitive conduct.​

• The 2023 amendment expanded “turnover” to “global turnover,” dramatically increasing potential financial risks for multinationals with substantial revenue outside India.​

Industry Implications

• The outcome of this litigation could profoundly affect the penalty framework for all multinational companies operating in India, not just Apple, by setting a precedent on whether fines should reflect only domestic revenues or global earnings.​

• A judgment in Apple’s favor could limit the CCI’s ability to impose high-value penalties on global corporations for activities confined to the Indian market.​

This case is regarded as a significant legal contest shaping India’s antitrust enforcement on multinationals and is closely watched by other tech giants with large international business footprints.