Allegations of abuse of dominant position against Indian Oil Corporation Ltd., dismissed

Competition Commission of India (CCI): While observing that presence of other players with comparable size and resources who pose competitive constraints in the market, indicates that the consumers have option to choose from other LPG suppliers in the relevant market, CCI closed an information alleging that Indian Oil Corporation (IOC) had abused its dominant position with regard to transfer of LPG consumer numbers from one distributor to another in Uttar Pradesh.

The order of Commission came upon an information filed in the matter where it was alleged that IOC unilaterally transferred LPG consumer numbers of the informants from one distributor to another without giving any reason and thus violated the provisions of Competition Act. It was stated that IOC has a transparency web portal i.e., indane.co.in through which it, inter alia, gives options to its customers for portability of LPG connection from one distributor to another. Under this scheme, the consumers can opt for a distributor of their choice within a cluster in their vicinity but contrary to its portability scheme, all of a sudden, IOC unilaterally transferred the LPG consumer numbers of the Informants from one to other. After hearing the parties, CCI considered the market for the provision of services for distribution of LPG cylinders in Badaun district of Uttar Pradesh, as the relevant market and rejected the contention of the informant that IOC enjoys dominant position in the relevant market.

CCI observed, “Two other major players namely, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) with comparable size and resources are operating and they pose competitive constraints upon OP 1(IOC) in the relevant market. Presence of such players indicates that the consumers have option to choose from other LPG suppliers in the relevant market.” “OP 1(IOC) does not possess such market power so as to act independently of competitive forces prevailing in the relevant market or to affect its competitors or consumers in its favour. In the absence of dominance of OP 1 in the relevant market, its conduct need not be examined in terms of the provisions of Section 4 of the Act,” the Commission further added. While concluding the judgment CCI noted that the allegations that IOC has unilaterally changed their LPG consumer numbers from one entity to another does not raise any competition issue and therefore, does not fall within the ambit of the Competition Act. [Prem Pal v. Indian Oil Corporation Ltd., 2016 SCC OnLine CCI 69, decided on November 10, 2016]

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