Apple tells Delhi HC: CCI's global turnover penalty rule risks $38-bn fine

iPhone maker Apple Inc has told the Delhi High Court that the Competition Commission of India’s (CCI’s) amended law, which allows penalties to be calculated on the basis of a company’s global turnover rather than its India-specific revenue, is “arbitrary” and could expose it to a penalty of nearly $38 billion, according to the petition reviewed by Business Standard. The global technology major had moved the court on Tuesday challenging provisions that enable the antitrust regulator to impose penalties on a global turnover basis.

The firm has also disputed the retrospective clause, saying that CCI had in March directed the company to furnish audited financial statements for financial years 2022, 2023, and 2024.


“The applicants’ maximum penalty exposure, i.e., at the rate of 10 per cent of the applicants’ average global turnover derived from all of the applicants’ products/services globally for FY22 to FY24, could be approx $38 billion. Any retrospective imposition of penalty on the applicants in terms of the Impugned Amended Penalty Provisions by the Respondent Commission would be manifestly arbitrary, irrational and grossly disproportionate, rendering the same to be ultra vires the provisions of Article 14 and Article 21 of the Constitution of India,” Apple told the court in its plea.

The company also argued that the CCI has no jurisdiction to consider its global turnover, calling such an interpretation ultra vires of the Competition Act. “Section 32 of the Competition Act provides only for restricted extraterritorial operation of the Competition Act. The Respondent Commission (CCI) does not have any jurisdiction to consider products/services marketed beyond the territory of India, when the effect of any alleged anti-competitive behaviour is confined to such foreign territory,” Apple said.

Therefore, to consider global turnover of an enterprise, generated from territories outside the jurisdiction of the CCI and which have no connection whatsoever with the alleged anti-competitive conduct in India “is irrational, disproportionate and squarely against Article 14 of the Constitution of India,” Apple said.

The amended provisions empower the CCI to impose fines of up to 10 per cent of a firm’s global turnover from all products and services, replacing the earlier norm that limited penalties to revenue from the specific product or service under scrutiny in India.

The law also provides that the average turnover of the preceding three financial years will be considered while computing penalties.

Two new regulations, the CCI (Determination of Turnover or Income) Regulations, 2024 and the CCI (Determination of Monetary Penalty) Guidelines, 2024, which came in force last year, outline the methodology for calculating turnover and penalties.

This marks a clear departure from the Supreme Court’s 2017 Excel Crop judgment, which held that penalties must be linked only to the revenue earned from the infringing product or market, in line with the principle of proportionality, the firm said in its petition. The apex court had reasoned that such a measure ensured fairness and prevented punishment of business segments unrelated to the alleged violation. Echoing this position, Apple argued that the new provisions “purport to reverse the letter and spirit of the Excel Crop judgment of the Supreme Court.”

Apple said it approached the court now because, in an order passed in March this year, the CCI directed the company to furnish audited financial statements for FY 2022, 2023, and 2024. It maintained that the amended provisions, which came into effect last year, should operate only retrospectively. “Impugned Amended Penalty Provisions alter vested rights and interests of enterprises and therefore are substantive in nature and can only be applied prospectively in line with the judgment of the Hon’ble Supreme Court....,” the company said.

The Delhi High Court will hear Apple’s petition on December 3.