Apple is challenging India’s new antitrust penalty law under which the US company could potentially face a fine of up to $38 billion, a court filing at the Delhi High Court, seen by Reuters, shows.
The challenge is the first against India’s antitrust penalty law that since last year allows the Competition Commission of India (CCI) to use global turnover when calculating the penalties it imposes on companies for abusing their market dominance.
Since 2022, Tinder-owner Match and Indian startups have been locked in an antitrust battle with Apple at the CCI, where investigators last year issued a report saying the US smartphone company had engaged in “abusive conduct” on the apps market of its iPhone Operating System, iOS.
Apple denied all wrongdoing, and the CCI is yet to make a final decision in the case, including about any penalty.
The company is asking judges to declare as illegal the 2024 law that allowed the CCI to use global turnover, not just that in India, when calculating penalties, according to its 545-page court filing, which is not public.
Apple’s “maximum penalty exposure” at the rate of 10 per cent of its average global turnover derived from all of its services globally for three fiscal years to 2024 could be around $38bn, it said in the filing.
Such a “penalty based on global turnover...would be manifestly arbitrary, unconstitutional, grossly disproportionate, unjust,” it added.
Apple and the CCI did not respond to requests for comment.
Companies also risk fines of as much as 10pc of their global turnover for antitrust violations in the European Union.
Apple cited the CCI’s use of the new rules for the first time on November 10 in an unrelated case, where they were retrospectively applied to a violation by the affected company a decade earlier.
Apple has “no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them,” it argued.
The company has maintained it is a small player compared to Google’s Android, which is the dominant player in the Indian market.
Apple’s smartphone base has, however, become four times larger in the last five years in India, according to Counterpoint Research.
The CCI found last year that Apple was not permitting any third-party payment processor to provide services for in-app purchases, where the fee could be up to 30pc.
Apple’s plea will be heard on Wednesday.
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