Apple has filed a constitutional challenge against an amendment to India’s competition law, seeking to block antitrust proceedings that could expose the company to a colossal penalty of up to $38 billion.
The legal challenge, submitted to the Delhi High Court, targets a provision in the Competition Act 2024 that allows the regulator to calculate fines based on a multinational corporation’s global turnover—a major point of tension between New Delhi and global tech giants.
Apple’s 545-page petition argues that the amended law is “manifestly arbitrary, unconstitutional, grossly disproportionate, and unjust,” especially when applied to violations that occur only within the Indian market. The company is asking judges to declare the 2024 amendment illegal and prevent the regulator from taking any coercive steps that could force it to pay a potentially record-breaking fine.
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The Anatomy of the $38 Billion Threat
The staggering $38 billion figure is not a final fine but Apple’s own calculated “maximum penalty exposure.” This is derived from the new law, which empowers the Competition Commission of India (CCI) to levy a penalty of up to 10% of a company’s average turnover from all its products and services globally for the preceding three financial years.
Based on Apple’s average global turnover from all services (including the App Store) over the three fiscal years leading up to 2024, the tech giant estimates the 10% maximum penalty could reach approximately $38 billion.
Before the 2024 amendment, the penalty was calculated using the “relevant turnover”—revenue generated specifically from the infringing goods or service within the Indian market. The CCI’s current counsel argued in court that fines based only on local revenue (which might be in the hundreds of millions) “don’t matter” to major tech companies, suggesting that the massive global turnover fines are necessary to act as an effective deterrent. Opponents like Match Group have echoed this, stating a fine based on worldwide revenue would act as a “significant deterrent against recidivism.”
The legal dispute is tied to an ongoing antitrust investigation initiated in 2021 by the CCI following complaints from Match Group (Tinder) and several Indian startups. CCI investigators have concluded that Apple engaged in “abusive conduct” on the market for apps distributable on its iOS operating system.
The key allegation is that Apple creates a monopoly position by requiring developers to use only its proprietary in-app purchase (IAP) system for digital goods. This system forces developers to pay commissions of up to 30% on every transaction. The CCI found the App Store to be an “unavoidable trading partner” for iOS developers, leaving them “no choice but to adhere to Apple’s unfair terms.”
The CCI also took issue with Apple’s rules that prohibit app developers from informing users within the app about alternative purchasing methods or providing external links to non-Apple payment systems, which the regulator argues results in higher prices for Indian consumers and stifles competition.
However, the 2024 amendment brings India’s antitrust penalty framework closer to the model used by the European Union, which also allows fines of up to 10% of a company’s global turnover for antitrust violations.
A major point of contention for Apple is the retrospective application of the law. Apple cited an unrelated case on November 10 where the CCI used the new rules to penalize a company for a violation that occurred nearly a decade earlier. Apple argued it has “no choice but to bring this constitutional challenge now” to avoid the same treatment in its ongoing case.
The Dominance Debate
Apple defends itself by saying it is a smaller player in India compared to Google’s dominant Android platform. However, Counterpoint Research noted that Apple’s smartphone user base has quadrupled in the country over the last five years, suggesting its market power is rapidly growing, especially among high-value consumers.
India’s CCI previously fined Google approximately $162 million in 2022 for abusing its dominant position with its Android platform, restricting it from certain revenue-sharing agreements. That fine was calculated under the old “relevant turnover” regime. The new challenge by Apple is a direct test of the regulatory seriousness behind the new, dramatically tougher global turnover law.
The Delhi High Court has requested a detailed response from the CCI on Apple’s arguments, setting the stage for a critical legal showdown that will define the regulatory environment for all multinational corporations operating in India.