Apple Challenges India's Antitrust Penalty Law Facing Potential $38 Billion Fine

Apple Inc. is contesting India's new antitrust penalty law, which could expose the company to fines as high as $38 billion. This legal challenge, filed with the Delhi High Court, marks the first instance of a company contesting the law that allows the Competition Commission of India (CCI) to calculate penalties based on global turnover rather than solely on domestic revenue. The law was enacted in 2024 and has significant implications for how antitrust violations are penalized in India.

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Since 2022, Apple has been embroiled in an antitrust investigation by the CCI, which accused the company of "abusive conduct" in the iOS app market. The CCI's findings indicated that Apple was not allowing third-party payment processors for in-app purchases, which could incur fees of up to 30%. The ongoing investigation has seen various stakeholders, including Indian startups and companies like Match Group, engage with the CCI regarding Apple's market practices.

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In its court filing, Apple argues that the application of the new law is unconstitutional and seeks to limit penalties to the Indian revenue of the specific unit involved in the alleged violation. The company contends that it is a minor player in the Indian market compared to Google's Android operating system, which dominates the sector. Apple's filing emphasizes that imposing penalties based on global turnover would be arbitrary and disproportionate, likening it to penalizing a toy seller based on the total revenue of an unrelated stationery business.

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The CCI's ability to impose fines based on global turnover aligns with similar practices in the European Union, where companies can face penalties of up to 10% of their global revenue for antitrust violations. This approach aims to deter repeat offenses and ensure compliance with competition laws. However, Apple argues that such a framework could lead to excessive penalties that do not accurately reflect the nature of the alleged violations.

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Gautam Shahi, a competition law partner at Dua Associates, noted that the amended law clearly allows the CCI to consider global turnover when determining penalties. He suggested that it may be challenging for Apple to persuade the court to intervene in a legislative policy that has been explicitly defined.

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Apple's plea is scheduled for a hearing on December 3, where the court will consider the merits of the company's arguments against the CCI's new penalty framework. The outcome of this case could have significant ramifications for how antitrust laws are enforced in India and the potential financial liabilities for multinational corporations operating in the country.

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Critics of Apple's position, including Match Group, have argued that using global turnover for penalties serves as a crucial deterrent against future violations. They contend that such measures are necessary to maintain fair competition in the market.

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• “It will be difficult to convince the court to interfere with clearly laid down legislative policy.” — Gautam Shahi, Competition Law Partner, Dua Associates.

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