India defends antitrust penalty law in Apple fight

A law used to calculate fines on ‌the basis of a company’s global turnover will discourage breaches ​by multinationals, India’s antitrust watchdog told a court in opposing Apple’s high-profile challenge to the measure.

In November, Apple asked New Delhi judges to strike down the 2024 law, which could also have implications for global giants such as Pernod Ricard, Publicis, Amazon and other foreign companies facing antitrust scrutiny.

The law “aligns Indian competition law enforcement with established international practice,” the Competition Commission of ​India (CCI) said in a December 15 court filing, which is ⁠not public, as it laid out a detailed rationale for the first time.

Weighing only India-specific turnover as the basis for the calculation of penalties, especially in the case of ​global digital firms, fails to deter ⁠the impugned behaviour, the regulator added.

“This approach ensures that penalties retain real deterrent value in complex, digital and cross-border markets, rather than becoming nominal or easily absorbable for large multinational players,” the CCI said in the ‌filing seen by Reuters.

Apple and the CCI did not respond ‌to Reuters’ request for comment on the filing.

In its lawsuit, Apple said the law, which reflects practice in the European Union, ‍could lead to disproportionate fines for breaches that happened only in India.

The company fears it could be fined up to $38 billion if the global turnover ‍calculation is used, after a CCI investigation found it had abused its position on its app store. Apple denies the accusations.

Apple accuses the competition body of illegally applying the new law retrospectively in another case.

The CCI denied this, saying it always had powers to impose a fine as high as a tenth of a company’s turnover and the law changes merely clarified how it defines turnover.

“Clarificatory provisions operate retrospectively ⁠as they explain the true intent of the legislature,” the CCI said.

In its own filing, the CCI accused Apple of ​trying to misguide the court, saying that despite its power to calculate penalties on ⁠the basis of global turnover, it had sought only “India-specific financial details” from Apple.

Apple disagrees, saying the turnover details sought by the watchdog in line with the new law could expose it to a much higher penalty, its court filing shows.

The Delhi High Court ⁠is set to hear the lawsuit on January 27.