Tech giant Apple has taken India’s antitrust regulator to court, challenging a new law that could expose the company to a colossal fine of up to $38 billion.
The core of the dispute centers on how penalties for anti-competitive behavior are calculated: based on revenue generated only in India, or on the company’s entire global earnings.
Apple has filed a 545-page petition with the Delhi High Court, seeking to have the 2024 amendment to India’s Competition Act declared illegal. The amendment, which came into effect last year, grants the Competition Commission of India (CCI) the authority to use a company’s worldwide turnover when calculating fines.
Under the new law, the CCI is empowered to levy a fine of up to 10% of a company’s global turnover for abusing its dominant market position.
Apple’s court filing, seen by Reuters, estimates its own “maximum penalty exposure” at around $38 billion, calculated as 10% of its average global turnover from all its services over the three fiscal years leading up to 2024.
Apple argues this new formula is wildly disproportionate and unfair. According to the court filing, a penalty based on global turnover “would be manifestly arbitrary, unconstitutional, grossly disproportionate, unjust.” The company maintains that any penalty should be based only on the Indian revenue of the specific business unit found to violate the law.
Reuters says the company gave a simple analogy in its filing, noting “It would be arbitrary and disproportionate to levy a penalty on the stationery business’s total turnover of 20,000 rupees, when the contravention is only in relation to the toy business that earns 100 rupees.”
The antitrust allegations at the center
Apple’s move against the penalty law is tied to a larger, ongoing antitrust investigation by the CCI. This probe began in 2022 following complaints from several Indian startups and the owner of Tinder, Match Group.
The complaints accuse Apple of “abusive conduct” on its iOS App Store by forcing app developers to exclusively use Apple’s in-app payment system. This mandatory system charges a commission that can be as high as 30% on purchases, which critics say increases costs and limits developer choice.
Although Apple has denied any wrongdoing, CCI investigators issued a report last year suggesting the company had engaged in abusive behavior. The CCI has not yet issued a final ruling or determined any penalty in the case.
Fear of retroactive fines
A key reason Apple has chosen to challenge the law now before a final verdict in its case is the fear that the new, heftier penalty rule will be applied retrospectively.
Apple cited a recent, unrelated case where the CCI applied the new penalty rules to a violation that occurred a decade earlier. According to the company’s filing, this use of the new rules retroactively gave it “no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them,” per Reuters.
The Delhi High Court is set to hear Apple’s plea on Dec. 3. The outcome is expected to set a major precedent for how multinational corporations are regulated in one of the world’s fastest-growing smartphone markets.
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