Author: Aditya Pareek | EQMint | General News
The Union government has finalised its affidavit in the high-profile legal challenge mounted by Apple Inc. against recent amendments to India’s competition law, and the submission is expected to be filed shortly before the Delhi High Court, according to a senior government official familiar with the matter.
The case centres on amendments to the Competition Act that empower Indian antitrust authorities to impose penalties on companies based on their global turnover, rather than limiting fines to revenues generated within India. Apple has questioned the legality and proportionality of this provision, arguing that it exposes multinational companies to excessive penalties that may have little nexus with their actual business operations in the country.
The Ministry of Corporate Affairs (MCA), which administers the Competition Act, has now completed its legal response and is preparing to place its position on record before the court. The affidavit is expected to defend the intent and constitutional validity of the amendments, which were introduced as part of a broader overhaul of India’s competition framework.
Background of the Dispute
Apple’s petition arises against the backdrop of an ongoing investigation by the Competition Commission of India (CCI) into the company’s conduct in the app store ecosystem. The probe was initiated following a complaint filed by non-profit organisation Together We Fight Society, which accused Apple of abusing its dominant position in the market for app distribution on iOS devices.
The allegations primarily relate to Apple’s app store policies, including mandatory use of its in-app payment system and the commission charged to developers, which critics argue restrict competition and disadvantage app developers. Similar concerns have been raised by regulators in the European Union, the United States, and several other jurisdictions, making the Indian case part of a broader global scrutiny of Big Tech platforms.
It is important to note that the CCI has not imposed any penalty on Apple so far. The investigation is still ongoing, and the competition watchdog is yet to arrive at a final determination on whether Apple’s conduct violates Indian competition law.
The Contested Amendments
The amendments to the Competition Act, notified earlier, mark a significant shift in how penalties may be calculated in India. Under the revised framework, the CCI can levy fines of up to 10 per cent of a company’s global turnover for anti-competitive conduct, aligning India’s regime more closely with international practices, particularly those followed by the European Commission.
Previously, penalties were generally linked to the turnover derived from the specific products or services under scrutiny within India. Regulators and policymakers argued that this approach often resulted in fines that were too small to act as an effective deterrent, especially for large multinational corporations with vast global revenues.
The government has consistently maintained that the amendments are aimed at strengthening enforcement and ensuring that penalties are proportionate to the economic power of the offending enterprise. According to officials, the changes are also intended to prevent companies from structuring their operations in a way that limits their exposure to penalties in individual markets.
Apple’s Legal Challenge
Apple, however, has taken the position that linking penalties to global turnover is excessive and potentially arbitrary. In its petition before the Delhi High Court, the company has argued that such an approach could lead to disproportionate fines that bear no reasonable relationship to the alleged conduct or its impact on Indian consumers and markets.
The company has also raised concerns about legal certainty and due process, contending that the amendments grant overly broad discretion to the CCI. Apple’s challenge is being closely watched by other multinational corporations operating in India, many of which have expressed apprehension about the expanded scope of regulatory penalties.
Legal experts note that the case raises important questions about the balance between effective competition enforcement and safeguards against regulatory overreach. The court’s eventual ruling could have far-reaching implications for how India regulates large global enterprises.
Government’s Likely Stand
While the contents of the affidavit have not been made public yet, officials indicated that the government will robustly defend the amendments. The MCA is expected to argue that the changes are in line with global best practices and are necessary to address the realities of digital and platform-driven markets, where economic power is often concentrated among a handful of global players.
The government may also emphasise that the provision allowing penalties based on global turnover does not automatically translate into maximum fines in every case. Instead, the CCI is required to exercise discretion and consider relevant factors such as the nature, gravity, and duration of the infringement.
Officials have stressed that the amendments are enabling provisions and that penalties will continue to be subject to judicial scrutiny, including appellate review by the National Company Law Appellate Tribunal (NCLAT) and higher courts.
Broader Implications for Big Tech
The Apple case comes at a time when India is recalibrating its regulatory approach towards Big Tech companies. In recent years, authorities have launched multiple investigations into major digital platforms, including Google, Meta, and Amazon, over alleged anti-competitive practices.
Several of these cases have resulted in significant penalties and directions to alter business practices, signalling a more assertive stance by Indian regulators. The introduction of global turnover-based penalties is widely seen as part of this broader policy shift.
For global technology companies, the outcome of Apple’s legal challenge could set a precedent that influences compliance strategies and risk assessments in India. A ruling in favour of the government would reinforce the CCI’s enhanced enforcement powers, while any dilution of the amendments could prompt a re-evaluation of the penalty framework.
Status of the CCI Investigation
Despite the legal challenge, the CCI’s investigation into Apple’s app store practices is proceeding independently. The competition watchdog has already conducted a detailed inquiry through its investigative arm and is expected to issue its findings in due course.
If the CCI were to conclude that Apple abused its dominant position, the question of penalties—if any—would arise at a later stage. The resolution of the constitutional and legal issues surrounding the amended Competition Act could therefore play a crucial role in determining the eventual financial exposure for the company.
What Lies Ahead
The Delhi High Court is expected to take up the matter after the government files its affidavit, following which Apple will have an opportunity to respond. The court may also hear arguments on interim relief, although no such relief has been granted so far.
As India continues to position itself as a major digital economy with a strong regulatory framework, the Apple case underscores the evolving relationship between the state and global corporations. The final outcome will not only shape the future of competition law enforcement but also signal how India balances investor confidence with regulatory assertiveness in the years ahead.
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Disclaimer: This article is based on information available from public sources. It has not been reported by EQMint journalists. EQMint has compiled and presented the content for informational purposes only and does not guarantee its accuracy or completeness. Readers are advised to verify details independently before relying on them.
