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The Competition (Amendment) Act, 20231 has significantly modernized and revamped the Competition Act, 20022 and has equipped the Competition Commission of India (hereinafter "CCI") to better regulate the rapidly evolving digital markets, corporate restructuring from the lens of antitrust perspective, and also to effectively detect and punish anti-competitive/abusive business conducts. The aims of the 2023 amendments have been to (i) provide certainty to business and markets; (ii) faster correction of markets; (iii) facilitate ease of doing business by relying heavily on a trust-based approach; and (iv) evolve sound penalty jurisprudence wedded to the dual objectives of deterrence and disgorgement.
Background:
In India, the twin dimensions 'prohibition of anti-competitive agreements and abuse of dominant position of enterprises/group' of the Act are in force from May 2009. The third dimension 'Regulation of Combination' is also in force since June 2011. In the enforcement journey of over a decade, there have been many lessons to be learnt and many hurdles to be resolved. One such area 'penalty jurisprudence' has given rise to protracted litigation. In this Article, an attempt has been made to explain the ambiguities which used to exist (prior to amendments of 2023), which now no longer subsist, and how the changed law and explanations/clarifications are expected to settle a host of questions hovering around 'penalty'.
Lack of definition of 'Turnover/Income' and their calculation metrics
'Turnover' is a key criterion for determining the applicability of de minimis exemption and also in assessing whether a proposed combination breaches the substantive thresholds that trigger filing of a notification with the CCI for prior approval. It is also an important benchmark for determining penalty on delinquent enterprises for contravention of anti-competitive/abusive conduct provisions. Section 2(y) of the Competition Act, 2002 simply provides an inclusive definition of 'turnover', stating that 'turnover includes value of sale of goods or services.'3 Thus, there was a lack of clarity as to what is to be included and what all is to be excluded while computing 'Turnover'. Parties before the CCI used to bank upon CCI precedents and the FAQs put in public domain by the CCI. The need for comprehensiveness and clarifications in relation to turnover was being felt by all stakeholders.
'Income' is another concept which is used as a benchmark for determining penalty on an 'individual' found to have contributed to a violation of law. However, the term 'income' did not appear in the penalty calculation provisions, nor was it defined anywhere in the original Act of 2002. The CCI used to compute penalty based on a percentage of the individual's total gross income as shown in the Income Tax Returns (ITRs). There was an absence of calculation metrics as well.
Trade bodies and common agents who act as facilitators and are thereby liable for "hub and spoke collusion" used to contend that they are not engaged in the sale of goods and therefore do not have 'turnover' data to provide for the determination of penalty.
Exponential Growth of digital markets and their unique features
From 2009 onwards, exponential growth of digital markets was noticed and their market share relative to the total size of retail markets has grown geometrically. There is greater recognition more than ever before that digital markets have traits of: (i) exponential value creation; (ii) winner-takes-all dynamics; (iii) low marginal cost; and (iv) cross-side network effects. Resultantly, high-tech giants have an inherent capacity to accelerate their growth both in size and scale, which gives them more leverage to indulge in self-preferencing and exclusionary conduct, necessitating severe penalties.
Doctrine of 'relevant turnover/proportionality' as mandated by Excel Crop judgement
The Supreme Court's 2017 ruling in Excel Crop Care Ltd. v. Competition Commission of India4 severely curtailed the CCI's flexibility by strictly capping its penal powers. It mandated that fines be calculated using only the 'relevant turnover' (revenue generated from the specific goods or services involved in the violation) rather than the historical total turnover. The strict product limitation and the proportionality constraint pushed the Government to review this position. Incidentally, the principles laid down in Excel Crop Care were reaffirmed by the Delhi High Court in Mahindra Electric Mobility Ltd. v. Competition Commission of India,5 wherein the Court emphasized the need for monetary penalties to have a nexus with the harm identified.
Non-maintenance of India-specific account books by MNCs, especially high-tech giants
Despite the mandate under India's laws, MNCs often avoid maintaining India-specific accounts to: (a) minimize global tax liabilities; (b) keep centralized financial management; and (c) avail of the maximum advantage of transfer pricing arrangements. Keeping business operations and models opaque helps them to shift profits and revenue out of the source country to highly favorable low-tax jurisdictions. Through the mechanism of exorbitant royalties towards intellectual property and service arrangements, they succeed in showing minimal revenue/profits in India.
The OECD's study on Base Erosion and Profit Shifting (BEPS)6 has comprehensively documented how MNCs shift profits to low-tax jurisdictions to minimize their tax exposure.
Amendments Made in 2023 & 2024 Regulations/ Guidelines
In order to address the aforementioned issues/concerns, the following twin major amendments have recently been introduced:
(a) Insertion of an Explanation (2) below Section 27(b)7 of the Act. The Explanation provides: "For the purposes of this clause, 'turnover' means global turnover derived from all products and services by a person or an enterprise." Incidentally, Explanation (1) which was already in law provides: "For the purposes of this clause, the expression 'turnover' or 'income', as the case may be, shall be determined in such manner as may be specified by regulations."
(b) Insertion of sub-section (B) of Section 648under the head "Commission to Issue Guidelines". This amendment empowers the CCI to publish guidelines as to the appropriate amount of any penalty for any contravention of the provisions of this Act.
In order to carry forward the objectives of the above changes in the substantive Act, the Competition Commission of India (through a consultative process) notified on 6th March, 2024 the following Regulations/Guidelines;
(i) Competition Commission of India (Determination of Turnover or Income) Regulations, 2024.9
(ii) The Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024.10
These Regulations inter alia provide: (a) the computing metrics of 'turnover', especially what is to be included and excluded; turnover shall be based on consolidated audited accounts if an enterprise is required to maintain such accounts; in a situation where audited accounts are not available, the turnover shall be as certified by a Chartered Accountant and supported by an Affidavit of an authorized person; 'turnover', if not maintained in Indian Rupees, shall be indexed to foreign currency reference rates as published by the Reserve Bank of India; and (b) 'income' in the case of an individual shall be gross total income (as per the Income Tax Returns), reduced by income from house property and capital gains.
The Monetary Penalty Guidelines, 2024 inter alia provide the aggravating and mitigating factors which the CCI will examine while determining the percentage of penalty. Except in appropriate cases, the average relevant turnover of the enterprise shall be computed over three (3) years preceding the year in which the Director General's Investigation Report is received by the CCI; and where the determination of relevant turnover is not feasible, the Commission may consider the global turnover derived from all products/services for the purpose of determining penalty.
Apple Enquiry Before the CCI:
On filing of information by 'Together We Fight', a non-governmental non-profit organization, and the Alliance for Digital India Foundation—and later joined by Match Group (parent company of Tinder and Hinge)11 alleging that Apple Inc. is abusing its dominant position by mandating that its apps are exclusively distributed through its own App Store, requiring App developers to use Apple's in-App payment system, and charging an unfair 30% commission besides mandating the application of App Store Review Guidelines, and after considering Apple's submissions, the CCI decided in December 2021 to institute an enquiry and referred the matter to the Director General (DG)12 whose investigation report endorsed the findings that Apple, being dominant in the relevant market, is abusing its dominance. In the premises, the CCI decided to proceed with the enquiry and, during the course of enquiry, directed Apple to furnish its financial details to determine penalty in the event the CCI arrives at a conclusion that Apple had violated the abuse of dominance provisions of the Act.
On a separate note, Apple faces global antitrust investigations and penalties for abusing its dominant position in the App Store ecosystem. In the Netherlands, a Dutch Court upheld a EUR 50 million fine levied by the Netherlands Authority for Consumers & Markets (ACM) against Apple for imposing unfair payment mandates and anti-steering rules on dating app providers.13
Amended Penalty Architecture Challenged:
On being asked by the CCI to furnish global financial statements, Apple Inc. challenged in November 2025 the amended penalty architecture of the Act by filing a Writ Petition before the Delhi High Court,14 inter alia contending that: (i) the new penalty law/regulations/ Guidelines unlawfully expand the CCI's power by broadening the scope of Section 27(b) far beyond legislative intent; (ii) the CCI can now penalize based on worldwide turnover from all products even though the investigation concerns only the App Store ecosystem in India; (iii) the new penalty structure effectively overturns the Supreme Court's Excel Crop Care doctrine; and (iv) the company is therefore exposed to unlawful, arbitrary, and disproportionate penalties. Apple has also contested that it is impermissible to bring about such a fundamental change via the insertion of an Explanation below Section 27(b), and that its retrospective application is, in any event, constitutionally unacceptable.
Defences Put Forth by CCI & Union of India:
The CCI and the Union of India have vehemently defended the need for, and usefulness of, the restructured penalty provisions and the regulations. According to the CCI, the revamped penalty architecture brings transparency, removes ambiguities, aligns with global trends, and is essential to send across a message that 'the CCI not only bites, it bites bitterly'. The CCI submitted before the Court that relevant turnover is still being followed in principle. However, global turnover is to be used only in circumstances where Indian revenue is booked elsewhere or where its scale is reduced purposely and artificially. Determining penalty on global turnover especially in case of high-tech giants where India's revenue is booked outside India or does not reflect the real size and scale of its operations in India becomes essential to ensure that it is deterrent, assists in the disgorgement of unfair gains, and also desists the delinquent from recurring in objectionable anti-competitive conducts in India.
Conclusion
While making and amending the law is the prerogative of the legislatures, the power is not absolute and ought not to be exercised arbitrarily to undo a Court's judgment. As per media reports, Apple has agreed to furnish its India turnover. The Delhi High Court's impending ruling is going to decide the validity of the new 'Penalty Architecture' and also lay down the future roadmap of penalty jurisprudence.
Footnotes
1. The Competition (Amendment) Act, 2023, No. 18 of 2023, Acts of Parliament, 2023 (India).
2. The Competition Act, 2002, No. 12 of 2003, Acts of Parliament, 2003 (India), as amended by the Competition (Amendment) Act, 2023, No. 18 of 2023.
3. The Competition Act, 2002, No. 12 of 2003, § 2(y) (India) ("turnover includes value of sale of goods or services").
4. Excel Crop Care Ltd. v. Competition Commission of India, (2017) 8 SCC 47 (India)
5. Mahindra Electric Mobility Ltd. v. Competition Commission of India, 2019 SCC OnLine Del 8032 (India)
6. Org. for Econ. Co-operation & Dev., Transfer Pricing Documentation and Country-by-Country Reporting, Action 13 — 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project (OECD Publishing 2015), https://doi.org/10.1787/9789264241480-en.
7. The Commission may impose such penalty, as it may deem fit, which shall be not more than ten per cent of the average of the turnover or income, as the case may be, for the last three preceding financial years, upon each person or enterprise that is a party to such agreement or has abused its dominant position. In the case of a cartel, the Commission may impose upon each producer, seller, distributor, trader, or service provider included in the cartel a penalty of up to three times its profit for each year of the continuance of the agreement or ten per cent of its turnover or income for each year of the continuance of the agreement, whichever is higher." Competition Act, 2002, No. 12 of 2003, § 27(b) & proviso (India).
8. Competition Act, 2002, No. 12 of 2003, § 64(2)(b) (India).
9. The Competition Commission of India (Determination of Turnover or Income) Regulation, 2024.
10. The Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024.
11. In re: Alliance for Digital India Foundation v. Apple Inc., Case No. [04/2023], Competition Commission of India; see also in re: Match Group LLC v. Apple Inc., Case No. [28 of 2022], Competition Commission of India
12. In re: Together We Fight Soc'y v. Apple Inc., Case No. [24/2021], Competition commission of India
13. Apple Inc. v. Autoriteit Consument & Markt (ACM), Case No. C/09/621876 / KG ZA 21-1019, Rechtbank Den Haag [District Court of The Hague], 24 Dec. 2021 (Neth.) See also Apple Inc. v. Autoriteit Consument & Markt, Case No. 200.304.621/01, Gerechtshof Den Haag [Court of Appeal of The Hague], 13 Jul. 2022 (Neth.) (affirming the District Court on appeal).
14. Apple Inc. v. Competition Commission of India & Union of India, W.P.(C) No. [17934/2025], (Del. High Ct. filed Nov. 2025) (India)
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