Apple has initiated a legal challenge in India regarding the newly introduced antitrust penalty legislation, which could impose fines up to $38 billion on the tech giant. This case was presented at the Delhi High Court and serves as the first opposition to the 2024 law, permitting the Competition Commission of India (CCI) to determine penalties based on a company's global revenue rather than solely its Indian earnings.
The legal dispute arises amidst ongoing scrutiny from the CCI, which has investigated Apple since 2022 for allegedly misusing its dominance in the iPhone app marketplace. Apple maintains its innocence, with no final penalty issued by the CCI yet.
In court documents, Apple contends that assessing fines based on worldwide revenue is “arbitrary, unconstitutional, and grossly disproportionate.” The company calculated that its “maximum penalty exposure” under this law, at 10% of global earnings from the past three fiscal years, could potentially amount to around $38 billion. Apple argues that this method is inequitable as it penalizes the company globally for a violation specific to India.
Apple also raised concerns regarding the retroactive nature of the law, claiming that the CCI applied the new regulations to a violation that took place a decade ago, an approach it finds unjust.
The company emphasized its growth in India while still being significantly smaller compared to Google’s Android, the prevalent platform in the local smartphone arena. To support its claim, Apple illustrated its argument by suggesting that penalizing its overall global revenues for infractions related to a particular business unit is similar to fining a stationary company based on its unrelated toy division's earnings.
The court is set to hear Apple’s plea on December 3. Legal authorities suggest that it might be difficult for Apple to sway the court against the law, which explicitly allows the CCI to incorporate global revenue for penalty computations.
This case has garnered significant attention as it challenges the boundaries of India’s antitrust regulations and the authority of the CCI to levy considerable fines on international companies operating within its borders.
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