Apple has challenged India’s amended penalty laws, arguing that the country’s regulators have no jurisdiction over global revenues.
India has amended its penalty laws and now allows fines of up to 10% of a company’s global turnover, as against the standard penalty levied against domestic or product-specific revenue.
Court challenges India’s global turnover penalty law
Apple has filed a petition with the Delhi High Court challenging a recent change to the Competition Commission of India’s (CCI) penalty rules. Under the amended law, which was introduced via changes to the Competition Act, 2002, and the associated 2024 guidelines, the CCI can calculate fines based on a company’s global turnover rather than just its India-specific or product-specific revenue.
In its 545-page filing reportedly seen by Reuters, Apple describes applying global turnover to penalties as “arbitrary, unconstitutional, grossly disproportionate, unjust.” The company believes the new law is an overreach under the Indian Constitution.
With the 2023 amendment and 2024 guidelines, the CCI can now impose fines up to 10% of a company’s global revenue from all services and products if “relevant turnover” cannot be determined or is deemed insufficient.
Apple argued that the CCI lacks jurisdiction over worldwide revenues, especially if the alleged misconduct is confined to its Indian operations.
If the courts reject Apple’s challenge, the firm could face a maximum fine of roughly $38 billion, which is about 10% of its average global turnover for fiscal years 2022–2024. The European Commission also allows regulators to fine firms up to 10% of global turnover for competition violations.
The hearing is scheduled for December 3.
The antitrust dispute
Since 2022, the CCI has examined accusations brought by firms, including Match Group (owner of Tinder) and Indian startups that Apple engaged in “abusive conduct” on its iOS app ecosystem.
Specifically, the CCI has scrutinized Apple’s policy of disallowing third-party payment processors for in-app purchases, forcing developers to use Apple’s own system with fees of up to 30%.
Apple has so far denied any wrongdoing despite having similar cases in Europe, Russia, Germany and Turkey.
European Commission regulators recently fined Apple €500 million for violating “anti-steering” rules. They found that Apple’s App Store contract terms prevented developers from offering users cheaper offers outside Apple’s ecosystem.
In Russia, Apple paid fines of up to $13.7 million over “anti-steering” allegations in 2022. Russian authorities found its App Store payment restrictions anticompetitive.
Legal experts say it may be difficult for Apple to overturn India’s clearly drafted legislative policy. One practitioner stated that the amended law is “clear” regarding CCI’s jurisdiction over global turnovers.
Other large technology companies like Google and Meta are also facing charges over dominant and anticompetitive practices.
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Source: https://www.cryptopolitan.com/apple-38b-penalty-india-antitrust-case/