Apple Moves Delhi High Court Against Indian Competition Law Penalty Clause, Faces Potential $38 Billion Fine

Apple has approached the Delhi High Court to contest a key provision in India's revamped antitrust regulations. The tech giant argues that penalties based on a company's global turnover could expose it to fines as high as $38 billion. The petition, filed amid an ongoing probe by the Competition Commission of India (CCI) into Apple's App Store practices, marks the first direct legal challenge to the controversial 2023 amendment allowing such worldwide revenue calculations.

Bar and Bench reports that the writ petition targets Section 27(b) of the Competition Act, 2002, along with the CCI's 2024 regulations and guidelines on determining turnover and monetary penalties. Apple contends these rules are unconstitutional, arbitrary, and disproportionately punitive, potentially violating Articles 14 (equality) and 21 (right to life and liberty) of the Indian Constitution.

CCI is probing into App Store dominance

The legal move comes against the backdrop of a CCI investigation into Apple's alleged anti-competitive conduct in the iOS apps market. Regulators have accused the company of abusing its dominant position by imposing fees of up to 30 percent on in-app purchases and prohibiting third-party payment processors. While Apple has denied any wrongdoing, and no final penalty has been imposed, the company is also challenging a 2025 CCI order directing it to submit audited financial statements for fiscal years 2022 to 2024.

In its 545-page filing, Apple highlights the 'maximum penalty exposure' at 10 percent of its average global turnover from all products and services over the preceding three years, estimating this at approximately $38 billion. The firm argues that such a levy would be 'manifestly arbitrary, grossly disproportionate, and unjust', using the analogy of penalising a stationery business's entire revenue for a minor infraction in its toy segment.

The matter was listed before a Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela but could not be taken up due to time constraints. It is now scheduled for hearing on December 3.

New law to have ramifications on all big tech firms

Apple's challenge carries significant implications for other big tech players under the CCI's scrutiny, including Google, Amazon, and Meta. These firms face probes into app store policies, bundling practices, and digital advertising dominance, where fines could similarly balloon to 10 percent of worldwide revenues, potentially in the billions for each. Industry observers note that while the amended law is 'clear' on global turnover applicability, as per legal expert Gautam Shahi of Dua Associates, convincing the court to intervene in legislative policy may prove challenging.

Apple, which has seen its Indian smartphone user base quadruple in the past five years and projects sales of 15.5 million iPhones in 2025 (a 25 percent year-on-year rise), positions itself as a smaller player compared to Android's market lead.