Apple has escalated its legal battle in India by challenging the constitutional validity of the country’s antitrust penalty laws. The American tech giant filed a petition in the Delhi High Court to contest the Competition Commission of India’s power to levy fines based on a company’s global turnover rather than just its relevant local revenue. This legal maneuver comes as Apple faces a potential penalty of up to $38 billion stemming from an ongoing investigation into its App Store practices.
The core of the dispute lies in a 2023 amendment to India’s competition laws. Previously, the antitrust watchdog calculated penalties based on the turnover derived specifically from the product or service under investigation. The amended law now empowers the CCI to impose fines of up to 10 percent of a company’s global turnover if it finds evidence of anti-competitive behavior.
Apple argues that this provision is manifestly arbitrary and unconstitutional. In its court filing, the company used an analogy to illustrate its point. It stated that if a merchant sells both toys and stationery but violates the law only in the toy business, it would be unjust to calculate the fine based on the total revenue of the entire shop. Apple contends that a penalty based on its worldwide revenue, which exceeds $380 billion, would be grossly disproportionate to the alleged infractions within the Indian market.
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This high-stakes litigation runs parallel to an antitrust probe initiated by the CCI in 2021. The investigation followed complaints from the Match Group and local startups alleging that Apple abused its dominant position in the app market. The primary grievances focus on Apple requiring developers to use its proprietary in-app purchase system, for which it charges commissions of up to 30 percent, and restricting third-party payment options. The CCI’s investigation report from June 2024 reportedly found merit in these allegations, setting the stage for a final verdict and potential penalties.
The timing of this conflict is critical as Apple cements its economic footprint in India. The company posted record sales of nearly $9 billion in the country for the fiscal year ending March 2024. This figure represents a significant milestone in Apple’s strategy to diversify its supply chain and consumer base away from China.
However, recent data suggests a normalization of this growth trajectory. Reports indicate that Apple’s sales growth in India slowed to 18 percent last fiscal year, marking a six-year low. This deceleration is attributed to a high statistical base from previous years and the saturation of the premium smartphone segment. While revenue is at an all-time high, the slowing growth rate makes the prospect of a multi-billion dollar fine even more alarming for the company’s regional outlook.
For Indian buyers, the outcome of this legal and regulatory tussle holds significant implications. If the CCI successfully enforces its mandate and rules against Apple’s restrictive App Store policies, consumers could see a shift in how they pay for digital services. A ruling similar to the Digital Markets Act in Europe could force Apple to allow alternative payment methods on the App Store. This would likely drive down the cost of subscriptions for apps like Spotify, Tinder, and various streaming services, as developers would no longer be compelled to pay the 30 percent commission fee. Indian users might soon enjoy lower prices and a wider array of payment options within their favorite apps.
Conversely, a prolonged legal stalemate could delay these consumer benefits. Apple has shown it is willing to fight aggressively to protect its ecosystem, and this challenge to the penalty law suggests the company will not concede without exhausting every legal avenue.
