From Relevant Turnover To Global Turnover: Rethinking Penalty Calculation Under The Competition Act, 2002

Apple's challenge as a test case for penalties based on global turnover

1. Apple Inc. (Apple) has moved the Delhi High Court challenging how penalties are calculated under India's revamped competition law framework.¹ The challenge stems from an ongoing antitrust investigation into Apple's App Store practices in India. Complaints from app developers, including Match Group, alleged that Apple's restrictions on in-app payments and distribution unfairly disadvantage competitors and developers.

2. While the substantive antitrust findings are still awaited, Apple has approached the Delhi High Court to challenge the specific provisions of the Competition Act, 2002 (as amended) (Competition Act) and the relevant guidelines and regulations that allow the Competition Commission of India (CCI) to impose penalties based on "global turnover" of an enterprise.

3. Apple's challenge is significant because it arises in precisely the type of market that has generated the greatest uncertainty under the Determination of Monetary Penalty Guidelines, 2024 (Penalty Guidelines). The App Store operates as a multi-sided platform, combines paid and unpaid services, and forms part of a broader ecosystem of products and services. The dispute therefore raises a broader question: when relevant turnover is difficult to identify, under-inclusive, or economically meaningless, what methodology should the CCI adopt before resorting to global turnover?

4. This article uses Apple's challenge as a starting point to examine the broader legal and practical questions raised by the CCI's new penalty framework. It traces the shift from the Supreme Court's relevant turnover approach in Excel Crop Care²to the post-amendment regime that permits penalties to be capped with reference to global turnover. While there are other questions around retrospective application of the new regime which will be answered by the courts in due course, this article specifically considers how the Penalty Guidelines should be applied in cases where relevant turnover is difficult to identify, under-inclusive or economically meaningless. The article argues that, while the CCI must retain sufficient flexibility to address digital markets, platform ecosystems and cover-bidding cases, that flexibility should be channelled through a clearer, graduated methodology before resorting to global turnover or the CCI's residuary powers.

How the CCI calculates penalties

The earlier "relevant turnover" approach

5. Previously, Section 27(b) of the Competition Act empowered the CCI to impose a penalty of up to 10% of the average turnover of the enterprise for the last three preceding financial years. The CCI read this as referring to the enterprise's total turnover, which created a risk of disproportionate penalties, particularly for diversified or multi-product businesses. This was challenged in the Excel Crop Care³ case, and the Supreme Court held that penalties had to be based on "relevant turnover", i.e., the revenue generated from the specific product or service to which the infringement relates. This approach was based on the following principles: (a) penalties must be proportionate to the infringing conduct; (b) companies (especially multi-product companies) should not be penalised taking into account revenue from business activities that have nothing to do with the alleged violation; and (c) penalties should not cripple a business's ability to participate in the market going forward.

6. However, the CCI's approach has differed in cases involving multi-sided markets. With the rapid rise of technology-driven businesses and digital platforms whose operations extend well beyond national boundaries, the CCI has repeatedly expressed reservations about applying the traditional concept of relevant turnover to big tech companies.

7. Such digital and platform markets typically involve multiple, closely connected products and services that reinforce one another through economies of scale and scope. Many such platforms are also multi-sided, with one or more sides of the market offered free of charge, resulting in little or no identifiable turnover for those segments. This structural complexity made it difficult, in the CCI's view, to isolate a single "relevant" revenue stream for the purpose of imposing penalties.

8. The CCI first articulated this concern in com v. Google,⁴ observing that the relevant turnover standard, developed in the context of conventional multi-product companies, may be ill-suited to digital and technology-driven enterprises. The CCI noted that applying a narrow turnover base in multi-sided digital markets could undermine the objectives of the Competition Act. For instance, if Google were permitted to argue that no penalty could be imposed for anti-competitive conduct in the online search market because the service is free for users, enforcement would be rendered ineffective. Building on this reasoning, the CCI held that in cases involving multi-sided platforms, the platform must be assessed as a single economic unit, with the revenues generated across the platform viewed holistically to calculate the penalty.

9. This platform-based approach to penalties was reiterated in the Google Android⁵ and XYZ v. Google⁶ decisions, where the CCI again highlighted the limits of a strict relevant turnover analysis in complex digital ecosystems and adopted a broader turnover base for penalty calculation.

10. A similar approach was taken in the MakeMyTrip–Goibibo⁷ There, the CCI found that MMT-Go had abused its dominant position in the market for online hotel booking services in India. The CCI rejected the argument that any penalty should be confined to the commission earned from hotels, holding that the relevant turnover approach was inadequate given the integrated nature of the platform's services. Reiterating its position from the Google cases, the CCI observed that where business segments are deeply interconnected and derive strength from one another, limiting penalties to a narrow revenue stream would dilute their deterrent effect. In such cases, the CCI concluded, a broader turnover base is necessary to ensure effective enforcement.

The post-amendment penalty framework

11. Under the amended Section 27(b) of the Competition Act, the statutory ceiling for penalties is now 10% of an enterprise's "turnover", with turnover defined as global turnover derived from all products and services of the enterprise. The CCI's Determination of Turnover or Income Regulations, 2024 (Turnover Regulations) address the threshold question of how "turnover" or "income" is to be determined. The Penalty Guidelines provide guidance on how the CCI should determine the monetary penalty within the statutory maximum, including the starting point, mitigating and aggravating factors and the broad circumstances in which global turnover may be considered. Read together, the amended penalty regime sets the outer legal maximum, identifies what constitutes turnover or income, and provides some structure to the CCI's discretion in arriving at the penalty amount.

12. For enterprises, the Penalty Guidelines provide that the initial amount may be up to 30% of the average relevant turnover, or average income, as the case may be. Where relevant turnover cannot feasibly be determined, the CCI may consider global turnover, derived from all products and services, for determining the penalty amount.

13. In determining the base penalty, the relevant or global turnover (as the case may be) will be considered for a period of three years preceding the year in which the Director General (DG) submits its investigation report to the CCI. The CCI may, for reasons to be recorded in writing, deviate from this and consider the three years preceding the contravention. While determining the base penalty, the CCI has to consider factors such as the nature and gravity of the contravention; the nature of the industry or sector affected because of the contravention and its implications on the economy; and/or any other factor which the CCI may deem appropriate.

14. Once the base penalty is calculated, the CCI shall adjust the penalty to be imposed based on aggravating and mitigating factors such as the duration of the contravention / involvement of the company, role of the company, repeated contravention, admission of contravention, voluntary termination and other factors listed in the Penalty Guidelines.

15. The CCI's jurisprudence also presents additional aggravating and mitigating factors, which include exigent economic circumstances, such as the outbreak of the COVID-19 pandemic and its impact on businesses and the relevant industry (especially for those enterprises that have a small annual turnover or an unstable financial position), the size of the enterprise (whether the enterprise concerned is a micro, small or medium enterprise), low or no turnover, including the parties' submissions that they do not hold any funds, etc.

16. The Penalty Guidelines also vest the CCI with residuary powers (paragraph 8 of the Penalty Guidelines), allowing the CCI to deviate from the Penalty Guidelines depending on the facts of a case and considering any exceptional circumstances.

Uncertainty in the Penalty Guidelines

17. Under the Penalty Guidelines, once the CCI has determined that an enterprise has contravened Section 3 or Section 4 of the Competition Act and is imposing a monetary penalty on the offending enterprise, the CCI first needs to ascertain the "relevant turnover" of an enterprise. However, if the CCI cannot determine the relevant turnover, it has two pathways available to it to determine the amount of penalty that should be imposed.

18. First, it can rely on paragraph 3(6) of the Penalty Guidelines which provides that, "in cases where the determination of relevant turnover is not feasible, the CCI may consider 'global turnover' (i.e., turnover derived from sales of all goods and services of an enterprise)". Alternatively, it can rely on its residuary powers as provided under paragraph 8 and deviate from the Penalty Guidelines entirely.

19. It appears from the Penalty Guidelines that the approach to be followed depends on the CCI's discretion, as the Penalty Guidelines do not stipulate any specific circumstances in which the CCI can use its powers under paragraph 3(6). This raises some important questions on the approach that the CCI can follow in a case. For instance, when dealing with an enterprise active in a multi-sided digital market, will the CCI provide reasoning stating why relevant turnover could not be determined, and then rely on paragraph 3(6) to calculate the penalty, or would it rely on its residuary powers when calculating the penalty?

20. Apart from cases dealing with platform markets, it is also important to consider cases dealing with cartelisation, especially cover bidding. In cover-bidding cases, a party that is not actually involved in the product or serious about participating in a tender (and therefore has no relevant turnover) may submit a bid to enable another party (with whom it has entered into an anti-competitive agreement) to win the tender. In Nagrik Chetna Manch,⁸ the CCI held that the relevant turnover approach could not be applied to cover-bid agreements. Interestingly, the CCI seems to have relied on its powers under paragraph 3(6) of the Penalty Guidelines, noting that as relevant turnover was nil, it could impose penalties based on global turnover. This raises a difficult interpretation issue. The CCI's reasoning was that a nil relevant turnover is not a meaningful determination of relevant turnover at all where it fails to capture the enterprise's participation in, or facilitation of, the contravention. However, if the CCI was able to determine a relevant turnover, even if the relevant turnover is nil, it might not be correct to take the position that it was not feasible to determine the relevant turnover.

21. The Penalty Guidelines therefore appear to conflate two conceptually distinct scenarios: (a) relevant turnover cannot feasibly be determined; and (b) relevant turnover can be determined but is either nil or does not adequately capture the gravity of the contravention. These situations raise different concerns and should not necessarily trigger the same response.

Comparative approaches: EU and UK penalty methodologies

22. Apple's challenge also invites comparison with the approaches adopted in Europe by the European Commission (EC) and the United Kingdom by the Competition and Markets Authority (CMA). A common feature of both frameworks⁹ is that worldwide turnover does not serve as the starting point for calculating a fine. Instead, the value of affected sales or relevant turnover forms the basis of the calculation, while worldwide turnover operates primarily as a statutory cap.

23. In platform cases, regulators have been able to identify a relevant turnover and have penalised enterprises on that basis. In the Google Shoppingdecision¹⁰, the EC imposed a fine of €2.42 billion, identifying revenues connected to the comparison-shopping service and associated advertising activities rather than relying on Alphabet's global turnover, notwithstanding that general search (the market in which dominance was established) is offered free of charge to users. The EC did not resort to Alphabet's total worldwide turnover as the starting point; rather, it identified the revenue stream on the monetised side of the platform that was directly connected to the infringing conduct. In the Google Android decision¹¹, the EC identified revenues connected to Google's Android ecosystem and search advertising activities rather than relying on Alphabet's worldwide turnover as the starting point.

24. That said, the EC has, in some circumstances, departed from its standard methodology where relevant sales do not appropriately reflect the gravity of participation. In the Euro Interest Rate Derivatives case¹², the EC relied on an annualised proxy based on the value of transactions during the period of participation. In the FX Spot Trading cartel¹³, the EC used revenues generated during the months corresponding to each undertaking's participation, which were subsequently annualised. In the Occupant Safety Systems cartel,¹⁴ where a facilitator (Marutaka) had no sales in the EEA, the EC calculated a proxy by applying to its global turnover the average ratio between the other parties' EEA sales and their global turnover, adjusted to reflect Marutaka's limited role.

25. The CMA's guidance is even more explicit. In its responses to stakeholder comments, the CMA recognised that a market-sharing participant may have zero turnover in the affected UK market. In such a situation, the CMA's view is that it will allocate turnover using a proxy based on the parties' shares of aggregate turnover in the affected markets.¹⁵

26. Cases in which cartel facilitators are involved also pose a challenge to a turnover-based fining methodology. Unlike platform operators or cover bidders, facilitators frequently have no sales whatsoever in the affected market. Nevertheless, EU practice demonstrates that the absence of identifiable relevant turnover has not led the EC to substitute worldwide turnover as the starting point for penalty determination. In levying penalties against AC-Treuhand, a facilitator of two cartels, the EC imposed a nominal fine in the first cartel, as penalties on facilitators were then unprecedented; in the second case, it employed a bespoke methodology reflecting the gravity and duration of the infringement, an approach which was upheld on appeal.¹⁶ The case therefore demonstrates that even where an undertaking has no sales in the affected market, the absence of relevant turnover does not necessarily justify recourse to worldwide turnover.

The case for a graduated Indian framework

27. Based on Nagrik Chetna Manch,¹⁷ the CCI's interpretation of paragraph 3(6) of the Penalty Guidelines seems to suggest that if the relevant turnover calculated does not sufficiently capture the contravention / gravity of the enterprise's anti-competitive conduct, then the CCI can rely on global turnover. While the principle behind the approach is sound, the primary issue with this approach is that the Penalty Guidelines say that it should not be feasible to determine relevant turnover and are not expressly concerned with whether the relevant turnover so determined was sufficient or not. The Penalty Guidelines should therefore distinguish between cases where relevant turnover is genuinely incapable of being identified and cases where it is identifiable but is nil or is under-inclusive as a measure of gravity / involvement / nature of the contravention itself.

28. Accordingly, the Penalty Guidelines should set out indicative factors for when it would be inappropriate to rely on relevant turnover as the sole penalty base because it cannot feasibly be determined, is nil, or would fail to reflect the undertaking's participation in the contravention. These factors may include: (a) whether the allegedly infringing service generates direct, identifiable revenue or is offered free of charge to users; (b) whether the relevant product or service is bundled with other offerings in a manner that prevents disaggregation of revenue streams; (c) whether the enterprise's accounting and reporting structures permit the isolation of turnover attributable to the relevant market, a consideration that arises frequently in multi-sided platform cases; (d) whether the infringement relates to a market in which the undertaking has no direct sales; and (e) whether the undertaking has exited the relevant market or the market is nascent, such that reliable turnover data is unavailable.

29. Once the CCI has determined that relevant turnover would not be appropriate as the starting point, the CCI could rely on paragraph 8 of the Penalty Guidelines as it already allows the CCI to deviate from the general methodology in exceptional circumstances and could therefore support alternative approaches where the ordinary methodology produces an inappropriate result. This would perhaps be the correct approach when dealing with cartel facilitators, as devising any proxies for relevant turnover for cartel facilitators would be difficult. However, in other cases, greater clarity would be achieved if paragraph 3(6) of the Penalty Guidelines itself recognised intermediate steps between relevant turnover and complete global turnover, as it would allow the CCI to rely on an alternative for the base penalty, while ensuring that any further adjustments are in accordance with the factors set out therein.

30. As discussed above, both the EC and CMA frameworks have developed graduated approaches grounded in the principle of proportionality, using proxies or adjusted turnover bases before resorting to total or worldwide turnover. The EC has employed annualised proxies based on transaction values, calculations anchored to the period of involvement, and comparator ratios derived from similarly situated undertakings. Similarly, the CMA has expressly recognised that where relevant turnover is zero or does not adequately reflect participation in the infringement, proxy methodologies may be required. As such, incorporating a similar intermediate step within paragraph 3(6) of the Penalty Guidelines would make the Indian methodology more predictable: once the CCI concludes that relevant turnover cannot be determined, or would be an inappropriate measure of the contravention, it should first consider a reasonable proxy which would be determined on a case-by-case basis before moving to global turnover.

31. Such a framework would accord with the principle employed by the Supreme Court in Excel Crop Care[18] that penalties must be proportionate, while also affording the CCI sufficient flexibility to address novel market structures. It would also preserve the role of aggravating and mitigating factors, because the base amount would not automatically be tied to the same global turnover figure that also operates as the statutory ceiling.

Conclusion

32. The amended Competition Act undoubtedly gives the CCI a broader statutory ceiling by permitting penalties to be capped with reference to global turnover. However, that does not answer the separate question of how the penalty base should be identified in a manner that is reasoned, predictable and proportionate. The Penalty Guidelines should therefore require the CCI first to consider whether relevant turnover can feasibly be determined, and whether it would be inappropriate because it is nil, under-inclusive or economically meaningless. Once the CCI has made this determination, it should first consider workable proxy methodologies to determine the base penalty, before resorting to global turnover.

33. Considering workable proxies that adequately capture the degree of involvement in the contravention would ensure that any penalties are proportionate to the infringement, while giving the CCI the flexibility to come up with alternative methodologies within the framework of the Penalty Guidelines. It would also promote transparency, consistency and procedural fairness, while ensuring that the residuary power remains a limited safety valve rather than an alternative penalty-setting mechanism.

34. This is particularly important because the current framework leaves uncertainty around the sequencing between paragraph 3(6) and the CCI's residuary power under paragraph 8 of the Penalty Guidelines. If paragraph 3(6) is supplemented with indicative factors and a graduated methodology for identifying proxy turnover, the CCI would have a clearer route for dealing with difficult cases such as multi-sided platforms, bundled digital ecosystems, free but indirectly monetised services and cover bidding. This would reduce the need for the CCI to rely on its residuary power except in genuinely exceptional cases where the ordinary methodology, including any proxy-based approach, is inadequate.

35. Ultimately, the significance of Apple's challenge extends beyond the App Store. The Delhi High Court's consideration of the amended penalty framework may provide the first judicial guidance on the relationship between relevant turnover, global turnover and the CCI's residuary powers. Regardless of the outcome, the challenge highlights the need for a clearer methodology governing the circumstances in which the CCI may move beyond relevant turnover.

Footnotes

1 Apple Inc. & Anr. v. Union of India & Anr., DHC, W.P. (C.) 17934/2025.

2. Excel Crop Care Limited v. Competition Commission of India and Another, Supreme Court, Civil Appeal No. 2480 of 2014, 8 May 2017.

3 Id.

4 Matrimony.com Private Limited v. Google LLC and Others, CCI, Case Nos. 07 and 30 of 2012, 8 February 2018.

5 Umar Javeed and Others v. Google LLC, CCI, Case No. 39 of 2018, 20 October 2022.

6 XYZ (Confidential) v. Alphabet Inc. and Others, CCI, Case No. 07 of 2020, 25 October 2022.

7 Federation of Hotel and Restaurant Associations of India and Others v. MakeMyTrip and Others, CCI, Case No. 14 of 2019, 19 October 2022.

8 Re: Nagrik Chetna Manch and Fortified Security Solutions and Others, CCI, Case No. 50 of 2015 with Suo Moto Case No. 03 of 2016, 10 November 2025.

9. EC Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, OJ C 210, 1 September 2006; CMA's guidance as to the appropriate amount of a penalty, CMA73, December 2021.

10. Case AT.39740 – Google Search (Shopping), EC, 27 June 2017.

11. Case AT.40099 – Google Android, EC, 18 July 2018.

12 Case AT.39914 – Euro Interest Rate Derivatives, EC, 4 December 2013.

13 Case AT.40135 – Foreign Exchange Spot Trading, EC, 2 December 2021.

14 Case AT.39881 – Occupant Safety Systems, EC, 22 November 2017.

15. CMA's guidance as to the appropriate amount of a penalty, Summary of responses to the consultation, December 2021.

16. C-194/14 P – AC-Treuhand v. Commission.

17. Re: Nagrik Chetna Manch and Fortified Security Solutions and Others, CCI, Case No. 50 of 2015 with Suo Moto Case No. 03 of 2016, 10 November 2025.

18. Excel Crop Care Limited v. Competition Commission of India and Another, Supreme Court, Civil Appeal No. 2480 of 2014, 8 May 2017.