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The litigation initiated by Apple Inc. in the Delhi High Court in December 2025 poses a substantive test of India's evolving competition regime particularly the legal architecture governing penalty imposition for anti-competitive conduct. At its core Apple's petition challenges the constitutionality and proportionality of recent amendments to the Competition Act, 2002 ("Act") as well as related guidelines adopted by the Competition Commission of India ("CCI"), which empower the regulator to compute penalties on the basis of an enterprise's global turnover rather than a narrow India-specific revenue base. The significance of this dispute extends beyond the interests of a single multinational corporation; it touches upon core principles of statutory interpretation, constitutional limits on punitive administrative action, and India's regulatory approach toward digital markets and Big Tech.
On 17 December 2025, the Delhi High Court briefly took up Apple's challenge only to adjourn further proceedings to January 27, 2026 after being informed that counter-affidavits filed by the Union Ministry of Corporate Affairs and the CCI were not yet on record. The Court also granted Apple additional time to file its rejoinder to those responses. The relief sought includes quashing the provisions permitting global turnover-based penalties and restraining enforcement actions under the amended competition law framework.
Legal Context
The Act was enacted to promote competition, prevent anti-competitive practices, protect consumer interests and ensure freedom of trade. Historically, the statute empowered the CCI to impose penalties of up to ten percent of the 'turnover' of enterprises found guilty of anti-competitive agreements or abuse of dominance under Section 27(b) of the Act. Prior to legislative clarification, the term 'turnover' was not specifically defined with respect to penalty computation. However, in the case of Excel Crop Care Ltd. v. Competition Commission of India1, the Supreme Court held that penalties must be calculated on 'relevant turnover' that is the turnover derived from the product or service implicated in the contravention within India. The rationale was rooted in statutory interpretation and principles of fairness and basing fines on total turnover including unrelated business lines could result in disproportionate sanctions devoid of rational connection to the conduct under scrutiny. This doctrine restrained the CCI from utilising total or global revenue as the basis for penalty calculation and ensured a degree of proportionality and predictability in enforcement.
In contract, the Competition (Amendment) Act, 2023 ("Amendment") introduced a broader interpretation of the turnover base. The amended Section 27(b) of the Act explicitly explains what 'turnover' means and allows CCI to consider global turnover meaning total revenue generated across all products and services worldwide when determining penalties irrespective of whether the infringing conduct and relevant market are confined to India. Under this expanded regime, the CCI may impose fines of up to ten percent of the average global turnover over the preceding three financial years. The practical impact of this change cannot be overstated. An entity with limited Indian revenues but vast global operations such as Apple now faces theoretical exposure to fines entirely disproportionate to the extent of alleged anti-competitive conduct within Indian borders.
Apple's petition principally targets this amendment on the ground that it is arbitrary, disproportionate and violative of constitutional guarantees. The company asserts that the CCI's March 3, 2025 order directing it to furnish audited financial statements for 2022–2024 for the purpose of computing a potential global turnover-based penalty demonstrates the real and imminent threat posed by the amended regime which could result in fines amounting to roughly USD 38 billion orders of magnitude greater than any conceivable Indian turnover-based penalty.
Statutory Interpretation and Constitutional Law
At the heart of Apple's constitutional challenge are questions of statutory construction and the scope of administrative penalty powers under the Competition Act. Section 27(b) authorises the CCI to impose penalties of up to ten percent of the average turnover of an enterprise for abuse of dominance or anti-competitive agreements. Historically, Indian courts and the CCI itself interpreted 'turnover' within the context of the domestic market and the specific relevant product or service implicated in an infringement. The Supreme Court in Excel Crop Care underscored that turnover must be tied to the infringing conduct. However, the Amendment upends this interpretive footing by prescribing a turnover base untethered to the relevant market or geographical nexus. This introduces a fundamental tension between legislative expansion of penalty powers and established judicial doctrine on proportionality. From a statutory interpretation perspective, a central argument in Apple's petition is that the amended language undermines the coherence of the Act's scheme potentially rendering the penalty provisions punitive beyond what the original legislative intent envisaged. If penalties are computed on global revenue detached from India-centric conduct, the proportionality principle ingrained in the earlier jurisprudence effectively evaporates.
Besides, administrative sanctions that are arbitrary, disproportionate or lack a rational basis can be struck down as violative of these constitutional guarantees. The Supreme Court's jurisprudence emphasises that penal statutes and administrative penalties must satisfy the test of proportionality and fairness. In State of W.B. v. Anwar Ali Sarkar2, the Court held that an unreasonable classification or arbitrary sanction offend Article 14. Similarly in Shreya Singhal v. Union of India3,, principles of legality and non-arbitrariness were underscored as constitutionalised tenants of administrative action. Apple's contention is that permitting penalties based on global turnover and revenue generated entirely outside the Indian market and unrelated to the conduct in question violates these constitutional norms. If upheld, such a penalty framework could theoretically make even minor Indian anti-competitive conduct subject to astronomical fines without an appropriate nexus to the harm caused within India. This invites scrutiny under the proportionality doctrine which requires that administrative sanctions bear a fair and reasonable relationship to the objective sought to be achieved. Here the objective of deterrence cannot justify disproportionate exposure to penalties that dwarf the scale of the Indian market. This dimension elevates the litigation beyond an industry dispute to a constitutional adjudication on the scope of administrative powers.
Broader Jurisprudential Themes and Global Firms
The dispute between Apple and the Indian competition regime must be viewed against the backdrop of broader jurisprudential themes shaping administrative law in India. When regulators are empowered to levy significant financial sanctions questions of fairness, due process and constitutional comity inevitably arise. Indian courts have consistently held that administrative penalties though not criminal must satisfy the test of reasonableness and not be oppressive. In Union of India v. Tulsiram Patel4, the Supreme Court articulated the 'reasonable, fair and just' test for administrative action. Extending this foundational principle to competition law, the balance between regulatory efficacy and individual corporate rights becomes crucial.
A related judicial articulation comes from State of Rajasthan v. Union of India5, where the Supreme Court emphasised that fiscal schemes must not lead to confiscatory outcomes wherein penalty provisions cannot be so draconian as to amount to arbitrary deprivation. While these cases arise in different legal contexts, the underlying principles of administrative restraint and fair penalty frameworks resonate profoundly in the competition law domain.
To Sum It Up
Apple's constitutional challenge to the Amendment of penalty regime is a legal watershed with ramifications extending well beyond the fate of its own antitrust docket. It encapsulates the tensions between legislative intent, administrative sanction powers, constitutional guarantees and the realities of regulating global digital enterprises. At stake are foundational questions about the permissible scope of punitive administrative action and the principle that penalties must bear a rational and proportionate relationship to the conduct they seek to deter. As the Delhi High Court prepares to grapple with these issues, its decision will contribute significantly to the jurisprudence on competition law, administrative law and constitutional limits on regulatory sanctions. Whether the Court upholds the global turnover regime, recalibrates it in light of proportionality or delineates a nuanced hybrid model, the judgment will shape India's competitive landscape and regulatory design for global enterprise engagement in the digital economy.
Footnotes
1 (2017) 8 SCC 47
2 AIR 1952 SC 75
3 (2015) 5 SCC 1
4 (1985) 3 SCC 398
5 (1977) 3 SCC 592
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