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Competition Commission of India (CCI): CCI received information from 4 chess players who were subjected to disciplinary action by All India Chess Federation (AICF) for participation in a chess event not authorised by it. The case concerned several stipulations of AICF on chess players, organisation of chess tournaments, discretionary nomination of players, etc.

After a detailed investigation by the Director General, CCI conducted further inquiry in the matter and found AICF to enjoy dominant position in the markets for organization of professional chess tournaments/events in India and services of chess players in India. In its order under Section 27 of the Act, CCI observed that AICF’s restriction on chess players to participate in unauthorised events and attendant punitive consequences restricted the movement of chess players and placed them and potential organisers of chess tournaments in a disproportional disadvantage. Hence, such stipulation was held as an unreasonable restriction on chess players and denial of market access to organisers of chess events/tournaments, in contravention of the provisions of Section 4(1) read with Section 4(2)(b)(1) and Section 4(2)(c) of the Act. The restrictions on chess players was further held to be in the nature of exclusive distribution and refusal to deal, in contravention of Section 3(4)(c) and Section 3(4)(d) of the Act.

Accordingly, CCI directed that:

(a) AICF shall cease and desist from the conducts that is found anti-competitive;

(b) AICF shall lay down the process and parameters governing authorisation/sanctioning of chess tournaments. In doing so, AICF will ensure that they are necessary to serve the interest of the sport changes and shall be applied in a fair, transparent and equitable manner. Besides, AICF shall take all possible measure(s) to ensure that competition is not impeded while preserving the objective of development of chess in the country;

(c) AICF shall establish prejudice caused by a chess player before taking any disciplinary action against him. Needless to say, the disciplinary actions taken shall be proportional, fair and transparent. The disciplinary actions against the Informant and other similar players shall be reviewed by AICF on these lines;

(d) AICF shall file a report to the Commission on the compliance of the aforesaid directions from (a) to (c) within a period of 60 days from the receipt of this order.

A penalty of Rs 6.92 lakhs was imposed on AICF for indulging in anti-competitive conduct. [Hemant Sharma v. All India Chess Federation (AICF),  2018 SCC OnLine CCI 53, order dated 12-7-2018]

OP. ED.

After three years of rigorous investigation, the Competition Commission of India (CCI) has announced its landmark decision[1] against Google, holding Google guilty of contravention of competition law on three counts out of the many investigated and imposed a penalty of Rs 135.86 crores upon Google. Informations against Google were filed by bharatmatrimony.com and Consumer Unity and Trust Society (CUTS) in 2012. CCI, by majority of 4:2, has held Google guilty of abusing its dominant position by indulging into search bias and for imposing certain restrictions upon its direct search intermediation partners.

The Commission has analysed the conduct of Google in two separate markets of “Online General Web Search Services in India” and “Online Search Advertising Services in India”, wherein both, Google was found to be undoubtedly dominant. Keeping in mind that intervention in digital markets by a regulatory authority should be “targeted” and “proportionate” lest it stifles innovation, CCI examined the various innovative features introduced by Google in the design of its results page and the effect of these new product designs on the web publishers as well as the users. Though CCI found no problem with Google’s Universal Results (groups of results of a specific type of information like news, images, local, etc.), OneBoxes (display box showing the exact answer to user query from one web publisher selected by Google) and Commercial Shopping Unit (sponsored unit on top/right of results page showing advertisements with images from which Google earns revenue). Google was found to be on the wrong side of law with respect to the display of Universal Results at fixed 1st, 4th and 10th positions prior to October 2010. The majority was of the view that such fixed positions were not based on relevance and therefore, may have misled the users. However, the minority noted that since Google has self-corrected such conduct long back, any need for regulatory intervention is obviated.

Next, in regard to Google Flights Commercial Unit, the majority has found contravention by Google as firstly, prominent placement of Flights Unit on results page pushes down third-party travel verticals (like MakeMyTrip, Goibibo, etc.) which may be more relevant for the users leading to unfairness to both travel verticals as well as the users; and secondly, since clicking on “search flights” link in this Commercial Unit takes the users to Google Flights vertical page, it amounts to unfair diversion of traffic by Google to its specialised search vertical. On the other hand, the minority on this count has observed that Commercial Flights Unit is nothing but an enhanced ad format and it is clearly distinguished by labelling the Unit as “sponsored”. Also, there is no evidence on record to establish any actual misleading or degradation or user diversion as a result of such Unit as was the case with Google Shopping Commercial Unit in the European Union. Further, since the Flights Unit does not offer any booking service but is only a comparison service, it cannot as such be compared with third-party travel verticals at all.

In the other market of online search advertising services, CCI has analysed three issues and found no problem in either of them. With regard to Google’s advertising platform of AdWords, CCI has opined that Google shares more than sufficient information with the advertisers to enable them to assess the performance of their ads and it does not discriminate with its House Ads. In respect of multihoming, CCI has found that AdWords API terms and conditions do not in any manner restrict the advertisers from transferring their ad campaigns on multiple platforms. In regard to allegations of trade mark law violation by Google allowing third parties to bid on trademarked keywords or using trademarked terms in AdTexts, CCI has very astutely restricted its jurisdiction noting that the same falls within the regulatory domain of the civil courts and an “isolated transactional imperfection” on account of “delay in whitelisting” cannot amount to competition law violation by Google.

Lastly, two more conducts of Google have been analysed — one with regard to Google’s distribution agreements and other with regard to Google’s direct intermediation/syndication agreements. In respect of distribution agreements which Google has with for instance Apple, whereby Google is the default search service provider in Safari web browser, CCI has found no “imposition” as default browser can be changed by the users at will. In regard to direct intermediation/syndication agreements, which enable website publishers to place Google services on their web pages, CCI has observed that Google offers two types of AdSense programs — search intermediation which enables web publishers to place Google search bar on their websites and ad intermediation which enables publishers to show Google ads on their websites, both search ads (AFS — AdSense for Search) and display ads (AFC — AdSense for Content). In direct ad intermediation, no contravention was found; however, in direct search intermediation, the restriction placed by Google on inclusion of any substantially similar search bar by web publishers on their websites has been found to be violative of the law. However, the minority, on this count too, has dissented and observed that since such restriction is not available in the online search intermediation agreements entered into by Google which are openly available to all web publishers, but is only put in the directly negotiated search intermediation agreements, the choice of the web publishers (consumers) is not forcefully restricted but rather such restriction is accepted at will. Further, since no independent “search intermediation/syndication services” market has been analysed, the finding given by the majority seems a bit presumptive.

Hence, as per the minority, no case of contravention by Google on any issue, is made out. However, the majority, taking Google’s revenue from its India operations into account, has imposed a penalty @ 5% of its average turnover, amounting to Rs 135.86 crores upon Google. Google, being an intricate part of every internet user’s life, this decision[2] of CCI is bound to have a wide impact. Since the matter involves high stakes, it is likely to go in appeal as well, may be even from both sides. However, as for now, CCI, vide this order, has shown exemplary understanding of the technical issues at hand, and yet again proven its balanced judicial prudence.

[1] Matrimony.com Ltd. v. Google LLC, 2018 SCC OnLine CCI 1.

[2] Ibid.

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Competition Commission of India: The Competition Commission of India (CCI) has found Nair Coal Services Pvt. Ltd., Karam Chand Thapar & Bros (CS) Ltd. and Naresh Kumar & Co. Pvt. Ltd.  to be in contravention of the provisions of Section 3(1) read with Section 3(3)(c) and Section 3(3)(d) of the Competition Act, 2002 for acting in a collusive and concerted manner which eliminated and lessened the competition besides manipulating the bidding process in respect of the tenders floated by Maharashtra State Power Generation Co. Ltd. (MAHAGENCO) for award of contract of coal liasoning work for its various thermal power stations.

Taking a serious view of the collusive conduct of coal liasoning agents, CCI opined that the case fell in the category of hard core cartels as the parties reached an agreement to submit collusive tenders and to divide the markets which warranted the matter to be dealt with utmost severity. Accordingly, CCI invoked the stringent provision of the law which enables it to impose a higher penalty in case of agreements entered into by cartels. Hence, a penalty at the rate of 2 times of the total profits earned from provision of coal liasoning services to all power generators for continuance of the cartel for 2010-11 to 2012-13 years was imposed upon the parties. Resultantly, CCI has imposed a penalty of Rs. 7.16 crore, Rs. 111.60 crore and Rs. 16.92 crore upon NCSL, KCT and NKC for the anti-competitive conduct. Besides, a cease and desist order was also issued against the above companies.

CCI has also deprecated the conduct of the Informant in breaching the confidentiality and sanctity of the inquiry by circulating copies of the investigation report to B.S.N Joshi & Sons Ltd.- a rival of the Opposite Parties – who, in turn, forwarded copies thereof to various authorities. [Surendra Prasad v. Maharashtra State Power Generation Co. Ltd., Case No. 61 of 2013, decided on 10.01.2018]

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Competition Commission of India (CCI): The Competition Commission of India has found All India Film Employees Confederation (AIFEC), Federation of Western India Cine Employees (FWICE) & its affiliates and three producer associations i.e. Indian Motion Picture Producers Association (IMPPA), Film and Television Producers Guild of India (FTPGI) and Indian Film and Television Producers Council (IFTPC) to be in contravention of the provisions of Section 3 of the Competition Act, 2002  which prohibits anti-competitive agreements.

The final order was passed on an information filed by Shri Vipul Shah who alleged that specific provisions of the MoU dated 01.10.2010 (MoU) signed between FWICE and producer Associations i.e. IMPPA, FTPGI, and IFTPC relating to member-to-member working, fixation of wages, charging for extra-shift, etc. to be anti-competitive. The conduct of FWICE and its affiliated craft associations in enforcing these provisions was also alleged to be anti-competitive.

CCI found Clause 6, which mandated that the producer can only engage with the members of FWICE and its affiliates, and Clause 18, which provided for the constitution of vigilance committee to enforce Clause 6 of the MoU as violative of Section 3(3)(b) read with Section 3(1) of the Act. Further, the directive to engage dancers/fighters in the ratio of 70:30 was also found to be in contravention of Section 3(3)(c) read with Section 3(1) of the Act. Clauses relating to fixation of wages, payment for extra shift, etc. were not found to be anti-competitive.

CCI also noted in its order that trade unions enjoy no immunity or exemption for their conduct which contravenes the provisions of the Act and accordingly, the plea of the trade unions of being governed only by the provisions of Trade Union Act, 1926 was rejected. CCI has issued a cease and desist order against the Associations in respect of the conduct found to be in contravention of the Act. However, no monetary penalty was imposed on any of the Associations. [Vipul A. Shah v. All India Film Employee Confederation, 2017 SCC Online 53, decided on 31.10.2017]

 

 

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Competition Commission of India: The Competition Commission of India (CCI) has found Grasim Industries Limited (GIL), Aditya Birla Chemicals (India) Ltd. (ABCIL) and Gujarat Alkalies and Chemicals Ltd. (GACL)to be in contravention  of the provisions of Section 3(1) read with Section 3(3)(d) of the Competition Act, 2002 for rigging Delhi Jal Board tenders which were floated for procurement of Poly Aluminium Chloride  (PAC) which is used for purification of water.  The final order was passed on a reference filed by Delhi Jal Board (DJB).

While rejecting the plea of being single economic entity taken by GIL and ABCIL, CCI noted in the order that these two companies are not only separate legal entities but also have participated in these tenders individually and separately. Further, CCI noted that the concept of single economic entity has no application in the context of the proceedings initiated under Section 3(3) of the Act, especially in a case of bid rigging/collusive bidding.

Apart from issuing a cease and desist order against the above companies, CCI has imposed a penalty of Rs. 2.30 crore, Rs. 2.09 crore and Rs. 1.88 crore upon GIL, ABCIL  and GACL respectively for the anti-competitive conduct. The penalty has been levied @ 8 % of the average relevant turnover of GIL and ABCIL of preceding three years. In case of GACL, penalty has been levied @ 6 % of the average relevant turnover of preceding three years. The conduct of GIL and ABCIL was noted by the Commission as egregious as these companies while apparently submitting separate bids, prepared and finalised the same through common channels creating a facade of competitive landscape.

Vide separate order passed in another reference filed by DJB in respect of alleged bid rigging in the tenders floated for Liquid Chlorine- another chemical used for purification of water, CCI found no contravention as no analysis was done by the Director General with respect to basic price, transportation cost, taxes and policy of profit margin of the parties as was done in the previous reference. [In re, Delhi Jal Board v. Grasim Industries Ltd., 2017 SCC OnLine CCI 48, decided on 05.10.2017]

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Competition Commission of India: The  Commission (CCI) has found Container Trailer Owners Coordination Committee (CTOCC) and its four participating associations, namely, Cochin Container Carrier Owners Welfare Association (CCCOWA), Vallarpadam Trailer Owners Association (VTOA), Kerala Container Carrier Owners Association (KCCOA) and Island Container Carrier Owners Association (ICCOA), to be in contravention of the provisions of the Competition Act, 2002.

In a reference filed by the Cochin Port Trust, it was brought to the notice of CCI that these associations, under the garb of ‘Turn System’, have indulged in unilateral fixation of prices. It was alleged that, during the Turn System, the users and container trailers were obliged to book services only through this centrally controlled system and that CTOCC was restraining outside transporters from lifting the containers which was impeding the ability of the users to hire trailers of their choice.

Following a detailed investigation by the Director General (‘DG’), CCI found that CTOCC, along with the 4 participating associations, resorted to price fixing under the garb of the Turn System. In terms of Section 3(3)(a) read with Section 3(1) of the Act, the presumption arose against the said arrangement leading to AAEC, which was not satisfactorily rebutted by these associations, despite being given ample opportunity. Thus, CCI held them to be in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act. However, on the allegation pertaining to limiting and restricting the provision of services under Section 3(3)(b) read with Section 3(1) of the Act, CCI found the evidence to be insufficient to hold CTOCC or any of its participating association responsible.

Through this Order, CCI has unequivocally clarified that though forming an association for furthering the legitimate trade activities does not fall foul of the Act, transgressing the legitimate boundaries and indulging in anti-competitive activities does. When the trade associations are used as a platform to promote anti-competitive ends, it becomes necessary for CCI to intervene, for penalising the anti-competitive conduct. Further, the Commission also mentioned in its order that though ‘Turn System’ may have efficiency justification in a particular trade, no such efficiency or redeeming virtue were shown by CTOCC or any of its sub-association in the present case.

CCI thus held CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA to be in contravention of the provisions of Section 3(3)(a) read with 3(1) of the Act. Further, CCI has also found 10 of office bearers of CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA, responsible under Section 48 of the Act, on account of the positions of responsibility held by them in these associations during the period of contravention.

Accordingly, CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA and their office bearers have been directed to desist from indulging in the anti-competitive conduct found to be in contravention of the provisions of the Act. But considering certain mitigating factors, the Commission decided not to impose any monetary penalty on any of the parties. [Cochin Port Trust v. Container Trailer Owners Coordination Committee, Ref. Case No. 06 of 2014, decided on 01.08.2017]

 

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Competition Commission of India: The Competition Commission of India (CCI) has found Hyundai Motor India Limited (HMIL) to be in contravention of the provisions of Section 3(4)(e) read with Section 3(1) of the Competition Act, 2002 for imposing arrangements upon its dealers which resulted into Resale Price Maintenance in sale of passenger cars manufactured by  it. Such arrangements also included monitoring of the maximum permissible discount levels through a Discount Control Mechanism. Further, HMIL was found to have contravened the provisions of Section 3(4)(a) read with Section 3(1) of the Act for mandating its dealers to use recommended lubricants/oils and penalising them for use of non-recommended lubricants and oils. The final order was passed based on the  information filed by the dealers of HMIL viz. Fx Enterprise Solutions India Pvt. Ltd. and St. Antony’s Cars Pvt. Ltd.

Apart from issuing a cease and desist order against HMIL, CCI has imposed a penalty of Rs. 87 crore upon HMIL for the anti-competitive conduct. The penalty has been levied @ 0.3% of the average relevant turnover of HMIL of preceding three years. CCI noted in its order that for the purposes of determining the relevant turnover for the impugned infringement, revenue from sale of motor vehicles alone have been taken into account. [Fx Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Limited, 2017 SCC OnLine CCI 26, order dated 14.06.2017]