Delhi High Court asks Centre, CCI to justify Apple penalty
New Delhi, Dec. 2 -- The Delhi High Court issued notices to the Union government and Competition Commission of India (CCI) on Monday directing them to file an affidavit within a week, explaining the rationale behind imposing penalties based on a firm's global turnover rather than its India revenue.
The court was hearing a plea by Apple Inc, which challenged amendments to the Competition Act that allow penalties to be computed on a firm's global turnover.
A bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela declined to pass any order on the CCI's request that Apple be directed to submit its financial details by 8 December. It also did not comment on Apple's plea seeking protection from future coercive steps by the regulator, saying it did not wish to express any view at this stage.
The matter is likely to be heard next on December 16.
The CCI had asked Apple to submit its financial statements by 8 December in connection with its ongoing investigation into its App Store payment policy. The investigation stems from complaints filed during 2021-2022 by NGOs, Indian startups and Match Group (owner of Tinder, Hinge and OkCupid), alleging Apple abused its dominant position by requiring developers to use in-app payment system and pay commissions of up to 30%. The CCI found prima facie evidence of abuse. However, Apple has denied the allegations.
Fearing potential penal action under amended provisions, Apple moved the Delhi High Court seeking protection from coercive steps while its constitutional challenge to the global-turnover penalty framework is decided.
In its plea, Apple said the amended law could expose it to fines of $38 billion if found guilty. The company has challenged the 2023 amendment to Section 27(b) of the Competition Act and the 2024 Monetary Penalty Guidelines, which allow fines of up to 10% of average global turnover of past three fiscal years. Apple argued that applying global turnover to penalize conduct limited to India is "arbitrary and grossly disproportionate", especially when the alleged behaviour related to the small fraction of its worldwide business.
Apple also raised concerns about retrospective impact, since fines may be based on turnover from years before the amendment took effect. It said the move contradicted Supreme Court's Excel Crop Care ruling of 2017, which held that penalties should be based on relevant turnover, not total global sales.
Mint's emails to Apple India and CCI remained unanswered....
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