Apple’s $38 billion dilemma: Delhi HC hears tech giant’s appeal against antitrust agency; what’s at stake?

The Delhi High Court on Monday admitted a petition filed by Apple challenging the recent amendments to the Competition Act.

A bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela heard the case challenging the amendment in the law that allowed antitrust regulator Competition Commission of India (CCI) to impose penalties on companies for violations based on their global turnover.

Lawyer Abhishek Manu Singhvi, who was present on behalf of Apple during the hearing, said that the company wanted interim action without coercive steps.

“They (CCI) asked us for financial details. They said they would give the financial details and response to the Head Office by December 8,” he said.

However, CCI’s advocate argued that Apple is now resorting to this lawsuit to divert attention from its antitrust investigation into the App Store.

“It doesn’t matter if the penalty is $200 million or $300 million for big tech companies… If someone is sitting outside India, what impact will their practices have on India,” CCI’s lawyer said.

What’s at stake for Apple?

Apple has filed a petition in the Delhi High Court, saying the change would put $38 billion, or 10% of its global turnover, at risk if the provision is implemented in its ongoing case with the regulator over the App Store antitrust probe.

Over the last three fiscal years, Apple’s annual revenue has been approximately $380 billion.

Tinder owner Match and Indian startups have been locked in an antitrust battle with Apple at the CCI since 2022; researchers here published a report last year saying the US smartphone company’s iPhone Operating System, iOS, exhibited “malicious behavior” in the app market.

The company is asking judges to declare illegal the 2024 law that allows CCI to use global turnover, not just Indian turnover, when calculating penalties.

Apple cited the CCI’s first use of the new rules in an unrelated case on November 10; these rules applied retroactively to a violation by the affected company ten years earlier.

Apple “has no choice but to raise this constitutional challenge now to prevent retroactive penalties being imposed against them,” he said.

Apple argued in its court filing that India should only impose penalties based on the Indian revenue of a particular unit violating antitrust law, citing the example of a toy retailer running a stationery business.