New Delhi [India], December 1 : The Delhi High Court on Monday issued notice to the Central government and the Competition Commission of India (CCI) on a petition filed by Apple Inc. and its subsidiary, challenging the amended legal provisions that allow the competition regulator to impose penalties based on a company's global turnover for anti-competitive conduct.
The Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela sought responses within a week and listed the matter for further hearing on December 16.
During the hearing, the Bench pressed the government to justify how penalties linked to global turnover could be imposed even when the alleged abuse relates to only one product or service.
Apple has challenged the amended Section 27(b) of the Competition Act, along with the Turnover Regulations 2024 and Penalty Guidelines 2024, arguing that the amendments violate the Supreme Court's ruling in Excel Crop Care Ltd. v. CCI, which limits penalties to the relevant turnover linked to the infringing product.
Senior Advocate Balbir Singh, appearing for CCI, defended the amendments, arguing that the global turnover standard is needed to regulate large multinational entities with minimal or no turnover in India.
"The object of this is that the global turnover concept has been taken in those circumstances where you don't have a base in India, how do you punish them?" he submitted.
He further alleged that Apple's petition is aimed at obstructing the ongoing CCI investigation into the company's business practices.
The petition stated that amended Section 27(b) of the Competition Act permits penalties based on global turnover. The 2024 Turnover Regulations and Penalty Guidelines introduce "global turnover" and eliminate the earlier "relevant turnover" standard. A Confidentiality Ring Order directing Apple to disclose audited financial statements for FY 2022-24.
Apple argues the amendments are unconstitutional, arbitrary, and contrary to the Supreme Court-mandated doctrine of proportionality under Articles 14 and 21 of the Constitution.
The petition cites the Excel Crop Care judgment, where the Court held that only the turnover generated from the infringing product should be considered for penalties to avoid "shocking results."