Apple Fights Indian Global Turnover Penalty Rules in Delhi Court

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AuthorRiya Kapoor|Published at:
Apple Fights Indian Global Turnover Penalty Rules in Delhi Court
Overview

Apple is contesting Indian competition law provisions that allow penalties based on its global turnover, arguing they are illegal and unconstitutional. The tech giant is fighting the Competition Commission of India (CCI) in the Delhi High Court over regulations enabling fines of up to 10% of its worldwide income. Apple seeks to prevent retrospective imposition of such penalties, claiming the rules are arbitrary and disproportionate.

Legal Basis of Challenge

Apple Inc. has directly challenged Section 27(b) of the Competition Act, 2002, along with the Competition Commission of India (CCI) (Determination of Turnover or Income) Regulations, 2024, and related penalty guidelines. The company asserts that these provisions, which permit CCI to levy penalties up to 10% of an enterprise's average global turnover from the preceding three years, are fundamentally flawed.

Avoiding Retrospective Penalties

The core of Apple's argument rests on preventing the retrospective application of these penalty provisions. The California-based company contends that being subjected to fines calculated on its worldwide turnover, derived from all products and services, would be "manifestly arbitrary, unconstitutional, grossly disproportionate, unjust and totally unwarranted." This legal challenge is framed not as a delay tactic but as a necessary constitutional defence against potentially severe and unjustified financial impositions.

Cooperation Amidst Investigation

Apple disputes claims made by the government and CCI that its petition is an attempt to stall ongoing investigations. The company states that its legal challenge is distinct from its cooperation throughout the CCI's probe. Apple maintains it has "continual co-operation and timely engagement" and that its challenge to the regulations' constitutional validity is a separate, urgent matter.

Precedent and Discretion

Further, Apple highlights that the CCI itself has admitted the penalty provisions are not merely clarificatory but actually expand the existing scope of penalty regulations under the Competition Act. This expansion, Apple argues, grants "untrammelled power and discretion" to the CCI, potentially violating established legal principles, including the Supreme Court's judgment in the Excel Crop case. The company's legal team, led by Nisha Kaur Uberoi from J Sagar Associates, seeks clarity and proportionality in regulatory enforcement.

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