Interim injunction application against OLA Cab in alleged predatory pricing case, rejected

Competition Commission of India:   Whilst OLA Cab (of ANI Technologies) is under the scanner of the fair play watchdog and undergoing an investigation by the Director General of Investigation (“DG”) for alleged abuse of dominant position; the Commission has rejected the plea of the informant for interim relief.  The Commission on 24-04-2015 had found a prima facia case against OLA for indulging into predatory pricing to  oust other players in the relevant market of “Radio taxi services in the city of Bengaluru” and had order for investigation.

The informant   Fast Track Call Cab sought an temporary injunction against OLA to restrain from indulging in alleged practice of predatory pricing on the ground that unfair practices of OLA Cab (“opposite party”) will cause irreparable lose to the informant and adverse effect on competition in the market.   Informant contended that the OLA after having received funds of about $250 Million from Soft Bank, Japan in March, 2014 unleashed an onslaught of anti-competitive practices resulting in large scale erosion of market share of the Informant.  

The majority of the Commission (5:1); ruled that simply because the Informant has a prima faciecase, by itself will not entitle him to the grant of interim relief, unless, he satisfies that there is irreparable loss and injury to him and that the balance of convenience also lies in his favour. It found that the existence of the second element, i.e., irreparable loss to the Informant or definite apprehension of adverse effect on competition in the market has also not been satisfied. Further balance of convenience also is not lie in the informant because figures submitted by him cannot be relied upon further unless the same are verified by the DG in its investigation. For the reasons and pending investigation, the Commission was not convinced that any interim relief is required to be granted in this case.

However, one member in his dissenting note after a thorough market analysis observed that the market conditions in the present case were conducive for a credible predatory strategy. He observed that the particular urgency for an order of restraint in the present case arises from the fact that the OLA has continued to pursue its loss-entailing price-incentive scheme in the relevant market even after the order of the Commission for initiation of investigation.  He found that the market performance of OLA based on its deep pocket and predatory strategy is an imminent danger for the Informant and the competition, thus there is an urgent need to stop the Opposite Party on its tracks. Fast Track Call Cab Private Ltd v. ANI Technologies Pvt. Ltd,  2015 CCI 24, Order on 03.09.2015

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