Apple approaches Delhi HC against global turnover-based penalties on multinationals under competition law

The multinational mobile phone giant Apple has approached the Delhi High Court (HC) challenging provisions of India’s competition law that allow the Competition Commission of India (CCI) to impose penalties on “global turnover” of companies. The petition is listed for hearing before a Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela on Wednesday. Apple has made the Union of India and the Competition Commission of India (CCI) parties to the case.  The US-based mobile phone company has challenged the 2023 amendment to Section 27(b) of the Competition Act, 2002, and the Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024, to the extent they introduced the concept of “global turnover”. Section 27(b) allows the CCI to penalise an enterprise or a group of enterprises up to 10% of the average of the turnover or income of the last three years for abuse of dominant position or for entering into anti-competitive agreements.

The petition says that the penalty can be imposed on all parties to such an agreement or those who have abused their dominant position. The 2023 amendment to Explanation 2 of Section 27(b) of the Act expanded the definition of the term “turnover” to mean “global turnover”.