A bench of Chief Justice D K Upadhyaya and Justice Tejas Karia said the anti-trust regulator could proceed with the matter in the meantime and asked Apple to cooperate fully.
“Lay your hands off till July 15. Proceed with the matter. They will cooperate but you will not pass a final order,” the bench said.
The court was hearing Apple’s petition challenging the amendment to the Competition Act, 2002, which allows CCI to impose penalties based on a company’s global turnover.
Senior advocate Abhishek Singhvi, appearing for Apple, submitted that the CCI decided to take up the matter on May 21, and a final adjudication by the regulator before the final hearing by the court on July 15 could make the present petition infructuous.
Even as the court asked the CCI to not “make the petition infructuous”, the regulator’s lawyer, senior advocate Balbir Singh argued in favour of continuation of the proceedings on May 21, stating the issue of imposing a penalty would come at a later stage.
He suggested the CCI’s final order could be kept in abeyance and not given effect till the next hearing in court. The bench, however, retorted that it would complicate the matter as the final order would be appealable in nature.”After finding something considerable, we had issued notice in the matter. What will happen in a month’s time? We’re not stopping your proceedings. We’re only saying do not pass orders, else it will create complications,” the court said.
Senior advocate Singh subsequently said no final order would be passed by the CCI, subject to Apple supplying the information sought from it.
“Senior advocate Balbir Singh states that the proceedings will go on, but by the next date of hearing, no final order shall be passed. We direct the petitioner shall fully cooperate in the proceedings,” the court said in the order.
Apple filed the petition last year challenging the amendment allowing CCI to impose penalties based on a company’s global turnover. It also challenged direction to furnish the firm’s audited financial statements for several years.
Apple, in its petition, said the effect of amended penalty provisions was that the turnover generated from all products or services of the enterprise could be aggregated for computation of the penalty, instead of the turnover generated from the affected “relevant product or services” of the enterprise.
It said after the amendment, the global turnover of an enterprise, generated from territories outside the jurisdiction of the CCI, could be considered for computation of the penalty.
The plea said the amended provision empowered the CCI to fine firms found guilty of abuse of dominance or anti-competitive conduct up to 10 per cent of its average turnover of the preceding three financial years.
Apple said that its maximum penalty exposure, that is 10 per cent of its average global turnover derived from all of its products or services worldwide for the financial years 2022 to 2024, could be around $38 billion.