Apple (AAPL) is challenging India’s new antitrust penalty law under which the company could potentially face a fine of up to $38B, Reuters reported, citing a court filing at the Delhi High Court.
The challenge is the first against India’s antitrust penalty law that since last year, enables the Competition Commission of India, or CCI, to use global turnover when calculating fines it imposes on companies for abusing their market dominance, the report added.
Apple did not immediately respond to a request for comment from Seeking Alpha.
Since 2022, Tinder-owner Match (MTCH) and Indian startups have been in an antitrust tussle with Apple at the CCI, the report noted.
In July last year it was reported that a probe by the CCI found that Apple exploited its dominant position in the app store market on iOS, engaging “in abusive conduct and practices.”
Apple denied all wrongdoing, and the CCI is yet to make a final decision in the case, including about any penalty, according to the report.
The U.S. tech giant is requesting judges to declare as illegal the 2024 law that allowed the CCI to use global turnover, not just that in India, when calculating fines, the report noted.
Apple’s “maximum penalty exposure” at the rate of 10% of its average global turnover derived from all of its services globally for three fiscal years to 2024 could be about $38B, the report added.
Such a “penalty based on global turnover…would be manifestly arbitrary, unconstitutional, grossly disproportionate, unjust,” the filing added.
Apple cited the CCI’s use of the new rules for the first time on November 10 in an unrelated case, where they were retrospectively applied to a breach by the affected company a decade earlier, the report noted.
Apple has “no choice but to bring this constitutional challenge now to avoid retrospective imposition of penalty against them,” the filing noted, as per the report.
Apple notes that it is a small player compared to Alphabet’s (GOOG) (GOOGL) unit Google’s Android, which is the dominant player in the Indian market.
Last year, the CCI found that Apple was not allowing any third-party payment processor to provide services for in-app purchases, where the fee could be up to 30%.
In a private submission to the CCI, reported by the news outlet in October, Apple’s rival Match argued a fine based on global turnover could “act as a significant deterrent against recidivism,” as per the report.
In its court filing, Apple noted that India should only impose a fine based on the Indian revenue of the specific unit that breaches antitrust law, giving an example of a toy seller running a stationery business, the report noted.
The company also noted in the filing that it would be arbitrary and disproportionate to impose a fine on the stationery business’s total turnover of 20,000 rupees, when the contravention is only in relation to the toy business that earns 100 rupees.
Apple’s plea will be heard on Dec. 3, the report added.