Apple’s Fight Against $38 Billion Antitrust Penalty in India

Apple has been facing scrutiny from Indian antitrust regulators for allegedly abusing its dominance in the App Store and imposing its own in-app purchasing system on third-party developers. This issue is not new, as many developers have criticized Apple for taking a 15–30% cut of digital purchases and subscriptions. The lawsuit filed by Epic Games against Apple five years ago highlighted this issue, leading to new antitrust investigations and regulations like the European Union’s Digital Markets Act.

In 2021, the Indian antitrust case was initiated by a non-profit group called “Together We Fight Society,” followed by similar filings from Match, the company behind Tinder, and other Indian startups. The Competition Commission of India (CCI) decided to investigate all these cases collectively, claiming that Apple’s fees were anti-competitive.

What sets India’s case apart is the potential penalty Apple could face. A new penalty law in India allows the CCI to impose penalties based on global turnover, which could amount to $38 billion for Apple. The company has denied any wrongdoing and is challenging the use of global turnover in determining penalties.

Apple argues that penalties should be based on Indian revenue related to the specific violation, not the company’s total global turnover. The company cited an example of a toy seller with a stationery business to support its argument against the use of global turnover.

The proactive approach taken by Apple is driven by a previous case where the CCI imposed a fine for a 10-year-old violation under the new penalty law. Match believes that hefty fines are necessary to protect its business from Apple’s 30% commission, which it claims is impacting its revenues.

Legal experts believe that Apple faces slim chances of success in challenging the penalty law. The company is set to argue its case on December 3, but the outcome remains uncertain. A $38 billion penalty would be one of the largest fines Apple has ever faced, and it could serve as a deterrent against future violations.

Overall, the case highlights the ongoing debate over Apple’s App Store policies and the implications of global turnover in determining penalties for antitrust violations. It remains to be seen how the situation will unfold and what impact it will have on Apple’s operations in India and beyond.