Apple CCI Case: Delhi High Court has asked the government and CCI (Competition Commission of India) as to why fines should be imposed on companies on the basis of their global earnings i.e. global turnover. In fact, there have been recent changes in India’s Competition Act in which it has been said that if a big company breaks the rules, then fine can be imposed on it on the basis of its global earnings, not just on India’s earnings. Apple has challenged this rule because the company fears that if CCI finds it guilty in its App Store case, then it may face a huge fine under this new rule. CCI was asking Apple for its financial documents, but the High Court has not yet banned it and has not given any order.
In the ongoing case against Apple in India, the company may face a huge fine of up to $38 billion. The court has not ordered Apple to hand over the financial documents immediately and now the next hearing will be held on December 16. This case is being considered big because it will decide how India will impose fine on big tech companies like Google, Apple, Meta in future, will India decide whether the fine should be based only on India’s earnings, or on the earnings of the entire world?
High Court asked for answer, but silence on relief to Apple
The High Court bench has asked the government and CCI to file a reply within a week as to what is the logic of global turnover based penalty. At the same time, the court did not give any instructions on the demand of CCI in which Apple was asked to submit financial details by December 8. The court also refrained from commenting on Apple’s appeal that it should be protected from any possible harsh action. The court clearly said that it does not want to express any opinion at this stage.
Investigation regarding App Store payment policy
CCI is investigating Apple’s App Store payment policy. This investigation is based on complaints filed in 2021-22 in which some NGOs, Indian startups and Match Group had alleged that Apple was abusing its dominant position due to its in-app payment system and commissions of up to 30%. CCI had found indications of misuse in the initial investigation, which was rejected by Apple. Under this investigation, financial statements were sought from the company till December 8.
Fear of fine up to $38 billion
Apple could be fined up to $38 billion. Apple has warned in its petition that due to amendments in the Competition Act and 2024 Monetary Penalty Guidelines, a fine of up to 10% of the average global turnover can be imposed on it. The company says that it is unfair and inconsistent to make global sales the basis for limited conduct in India. Apple also said that this rule may also affect the earnings of previous years, which it is calling fundamentally unfair. The company cited the 2017 Excel Crop Care decision of the Supreme Court in which the penalty was said to be based on relevant turnover.
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