The Delhi High Court has sought responses on a petition filed by Apple Inc. contesting the recent amendment to the Competition Act, 2002, which authorises the Competition Commission of India (CCI) to compute penalties on the basis of an enterprise’s global turnover.
The amendment, brought into force on March 6, 2024, permits the CCI to impose fines of up to 10% of the average turnover of the preceding three financial years for anti-competitive conduct or abuse of dominant position. Apple has argued that, if applied to its operations, the provision could expose it to a penalty of nearly USD 38 billion.
A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela took up the matter and directed issuance of notice to the Centre and the CCI.
Senior Advocate Abhishek Manu Singhvi, representing Apple, submitted that for multi-product corporations, penalties must be restricted to the turnover generated from the specific product line involved in the alleged contravention within India. Singhvi contended that using global turnover as the benchmark violates established Supreme Court jurisprudence on proportionality and reasonableness. He further argued that applying the amendment retrospectively to pending inquiries is impermissible.
The Bench questioned the Union’s position during the hearing, asking how CCI could rely on turnover from unrelated products when proceedings concern only one product category. The Court queried whether such an approach would not be inherently unreasonable.
Senior Advocate Balbir Singh, appearing for the Central Government and the CCI, defended the amendment. He argued that “relevant turnover” remains the basis for assessing contravention, whereas global turnover may be considered only for determining the quantum of penalty, particularly when an enterprise withholds information. Singh submitted that the provision aims to ensure compliance and prevent obstruction of investigations, rather than penalise unrelated businesses.
The Court directed the CCI to file a concise affidavit clarifying its position. Singhvi informed the Bench that Apple would submit its India-specific turnover figures by December 8, stating that the data is being compiled. The matter is next listed for hearing on December 16.
Apple’s petition asserts that pegging penalties to global turnover, irrespective of where contravention occurred, would be arbitrary, disproportionate, and unconstitutional. The plea argues that the CCI should restrict penalties to revenue earned in the Indian market by the specific division implicated in the alleged violation. Illustrating the point, the petition states that penalising a company’s entire ₹20,000 stationery business for a contravention solely involving a ₹100 toy segment would be fundamentally unjust.
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