Apple case: Delhi High Court gives govt and CCI a week to justify fines based on global turnover

Core Viewpoint - The Delhi High Court is examining the legality of imposing penalties on companies based on their global turnover rather than their revenue generated in India, following a challenge from Apple Inc regarding recent amendments to the Competition Act [1][5]. Group 1: Legal Proceedings - The Delhi High Court has issued notices to the Union government and the Competition Commission of India (CCI) to explain the rationale for the penalty framework [1]. - The court declined to order Apple to submit its financial details by December 8, as requested by the CCI, and did not comment on Apple's plea for protection from coercive actions [2]. - The next hearing is scheduled for December 16 [2]. Group 2: CCI Investigation - The CCI is investigating Apple's App Store payment policies following complaints from NGOs and Indian startups alleging abuse of dominant position [3]. - Apple has been asked to submit its financial statements in connection with this investigation [3]. - The CCI claims to have found prima facie evidence of abuse, which Apple denies [3]. Group 3: Potential Penalties - Apple warned that the amended law could expose it to fines of nearly $38 billion if found guilty, as penalties could reach up to 10% of average global turnover over the past three financial years [5]. - Apple argues that using global turnover for penalties related to conduct limited to India is arbitrary and disproportionate [5]. - Concerns have been raised about the retrospective impact of the penalties, as they may be based on turnover from years prior to the amendment [6]. Group 4: Regulatory Framework - The case could set a precedent for how India applies its new penalty framework to multinational tech firms, influencing future CCI actions [7]. - The CCI contends that fears of massive penalties based on global turnover are overstated, as penalties are calculated based on relevant product and geographical markets [9]. - Global turnover is used as a last resort when a company does not provide sufficient information for calculating relevant turnover [9]. Group 5: Market Context - Apple's business in India is significantly smaller compared to its operations in Europe, where it earned $101.33 billion in FY24 compared to about $8 billion in India [13]. - Despite this, Apple is experiencing rapid growth in India, driven by strong demand for the iPhone 17, with expectations to sell 15.5 million iPhones in 2025, a 25% increase from the previous year [14]. - Apple has captured a 28% share of India's premium smartphone market by value and became the world's largest smartphone brand in Q1 2025 with a 19% global market share [14].