National Company Appellate Tribunal: A Bench of Justice S.J. Mukhopadhaya, Chairperson and Justice A.I.S Cheema, Member (Judicial) and Kanthi Narahari, Member (Technical) admitted the appeal filed by the All India Online Vendors Association (“AIOVA”) against the order of the Competition Commission of India, dated 6-11-2018, whereby it held that no case of contravention of the provisions of Section 4 (abuse of dominant position) of the Competition Act, 2002 was made out against Flipkart and Amazon.
AIOVA — company registered under the Companies Act, 2013 — is a group of more than 2000 sellers, selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal, etc. It informed the CCI regarding abuse of dominant position by Flipkart alleging that small vendors have become allies of the big vendors and suppliers to leading sellers such as Cloudtail., WS Retail, etc. on the Flipkart and Amazon platforms, rather than selling directly to consumers through the online e-commerce marketplace sites. Further, it was apprehended that unfair trade practices were being carried and corporate veil on it was required to be lifted to assess the economic nexus and the wrongdoings being committed.
The Commission vide its order dated 6-11-2018, found no contravention of the provisions of Section 4 by Flipkart. Holding that the relevant market in the instant case may be defined as “services provided by online marketplace platforms for selling goods in India”, the Commission further held that “looking at the present market construct and structure of online marketplace platforms market in India, it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market.”
Finding that Flipkart was not a dominant player in the “relevant market”, it was held that the question of abuse of dominant position did not arise. Furthermore, it was held that the information provided by AIOVA was not sufficient to substantiate the allegations against Flipkart. Though the information was filed against Flipkart, the Commission held a conference with Amazon as well as it is also a key player in the relevant market. On the same reasoning, the Commission held that no contravention of the provisions of Section 4 could be said to be made out against either Flipkart or Amazon.
Appeal before NCLAT
Aggrieved by the decision passed by the CCI, filed a company appeal before the NCLAT challenging the same. Chanakya Basa along with Nidhi Khanna, Advocates, appearing for AIOVA argued on the errors in the impugned order. Per contra, Senior Advocate Amit Sibal is representing the opposite party along with Rajshekhar Rao, Yaman Verma, Sonali Charak and Neetu Ahlawat, Advocates.
The Appellate Tribunal has admitted the appeal for hearing. The respondents have been given 10-days time to file an affidavit in reply. The appeal is further posted for hearing on 30-07-2019.[All India Online Vendors Assn. v. CCI, Company Appeal (AT) No. 16 of 2019, decided on 15-05-2019]
S.O. 1382(E)— In exercise of the powers conferred by sub-section (1) of Section 8 read with sub section (1) of Section 10 of the Competition Act, 2002 (12 of 2003), the Central Government, vide office order No. Comp-05/9/2018-Comp-MCA dated the 11th December, 2018, appointed Ms Sangeeta Verma as Member of the Competition Commission of India, with effect from the 24th December, 2018 (Afternoon) for a period of five years or till 65 years of age, or until further orders, whichever is the earliest.
2. The terms and conditions of her service shall be governed by the Competition Commission of India (Salary, Allowances and other Terms and Conditions of Service of Chairperson and other Members) Rules, 2003.
The Tenth NLU Antitrust Law Moot Court Competition 2019 has been inaugurated in the honorable presence of Dean Dr. I.P. Massey and the Registrar. The registrations and exchange of memorials between the teams is underway in the auditorium, while the Researchers have begun with the Researcher’s Test!
4.30 PM – Preliminary Round 1 Begins
The judges have been briefed and they are really excited to witness the competition this time. The first Preliminary Rounds are about to begin and we wish all the participants good luck!
6 PM – Preliminary Round 1 ends
The first set of preliminary rounds have ended. The participants are tired after passionately arguing their sides, yet are enthusiastic for the next set. The second set of preliminary rounds will start soon, which will be followed by the reverse prelims.
8 PM – Preliminary Round 2 ends
The two sets of reverse prelims will begin soon, followed by declaration of the teams advancing to the Octa-finals, to be held tomorrow.
9 PM – Reverse Prelims begin
The the reverse prelims have begun. This is to ensure each team has an equal chance to argue both sides, and thus maintain a balance in scores. The participants are tired, yet are positive as ever!
11.30 PM– Reverse prelims end, results announced
The reverse prelims have been concluded, and due to the brilliant organizers in the tabulation team, we were able to receive the results quickly. Following are the teams qualifying to the Octa-Finals (in no particular order) :
Institute of Law, Nirma University.
Symbiosis Law School, Noida.
National University of Advanced Legal Studies, Kochi.
Gujarat National Law University.
National Law University, Odisha.
ILS Law College, Pune.
Amity Law School, IP.
Rajiv Gandhi National University of Law.
Hidayatullah National Law University.
Symbiosis Law School, Pune.
Government Law College, Mumbai.
School of Law, Christ University.
Faculty of Law, Aligarh Muslim University.
SVKM’S NMIMS KIRIT P Mehta School of Law.
Vivekananda Institute of Professional Studies.
Chanakya National Law University.
Memorials have been exchanged according to the match-ups, and the days events have come to an end. We congratulate the Octa-Finalists!
Day 2 – Octa Finals, Panel Discussion and Quarter Finals
The second day of the Tenth NLU Antitrust Moot Court Competition is successfully underway!
9.30 AM – Octa Finals commence
The judges have been briefed and the Octa Finals have commenced in the respective courtrooms. The participants look fresh and well rested even though they might have been ripping apart their opponent’s memorials all through the night! Wishing them all the best!
1 PM – 4th Antitrust Panel Discussion on Competition Law’s Interface with IBC commences
With the first set of Octa Final rounds over, preparations are in full swing for the reverse Octa Final Rounds. Meanwhile, participants attended the 4th Antitrust Panel Discussion, 2019. The topic for this year’s panel discussion pertains to Interface of Competition Law with the Indian Bankruptcy Code.Our esteemed panelists for this discussion are:
Ms. Anubhuti Mishra – An alumnus of King’s College, London and Hidayatullah National Law University, Raipur, she is currently working with the Competition Law team at P&A Law Offices, New Delhi. She has advised on several antitrust enforcement as well as merger review matters.
Mr. Shashank Sharma – Graduated from National Law School of India University in 2013. Thereafter, he went on to complete his European Master in Law and Economics in 2017. Since then he has been working with AZB & Partners, where his primary focus is Competition Law, with specific focus on Behavioural & Merger Control.
Mr. Toshit Shandilya – Graduated from National Law University, Delhi in 2013, he is currently an associate in the Competition Law team of Talwar Thakore & Associates. He has been involved in various critical enforcement and merger control cases before the CCI, as well as the COMPAT. He has been a law clerk with Justice V.S. Sirpurkar, former chairman, COMPAT where he assisted on a number of important cartel and Abuse of Dominance cases.
The participants of the panel discussion posed certain interesting questions to our Panelists. The questions ranged from procedural to policy issues, arising from the requirement of taking CCI’s approval for insolvency resolution plans that include combinations. The participants and the Panelists engaged on concepts, such as, the failing firm defence, composite combination transactions, inter-connected transactions, and so on, to name a few. The Panelists also threw some light on their practical experience as Competition Lawyers while dealing with complicated transactions that fall within the regime of the IBC. The interactive session provided the participants an insight into the complex interface between the IBC and Competition Law.
5 PM – Octa’s concluded, results announced
The Octa Finals and the Reverse Octa Finals have been concluded. While the participants argued commendably, our Judges had a tough time reaching consensus. The following are the teams progressing towards the Quater Finals (in no particular order):
National Law University, Odisha.
ILS Law College, Pune.
Symbiosis Law School, Pune.
Institute of Law, Nirma University.
National University of Advanced Legal Studies, Kochi.
SVKM’S NMIMS Kirit P. Mehta School of Law.
Gujarat National Law University, Gandhinagar.
Symbiosis Law School, Noida.
We congratulate the qualifying teams. The exchange of memorials for the Quarter Finals shall be taking place soon at the Registration desk.
The Quarter Finals of the Tenth NLU Antitrust Law Moot Court Competition have come to an end. Here are the teams that have qualified to the Semi Finals.
Symbiosis Law School, Pune.
Gujarat National Law University.
National Law University, Odisha.
National University of Advanced Legal Studies, Kochi.
A hearty congratulations to all the Semi Finalists!
8 PM – Semi Finals Underway
The Semi Finals are currently underway. The teams are engaged in fierce argumentation before an eminent panel of judges in both court rooms. Here, take a glimpse at the rounds.
10.15 PM – Semi Finals concluded
After establishing their ‘dominant position’ in this relevant mooting market, the following two teams will battle it out in the Finale of the Tenth NLU Antitrust Law Moot Court Competition 2019:
Symbiosis Law School, Pune.
Gujarat National Law University.
The Memorials will be exchanged between the finalists soon. May the best market player win the battle.
Day 3 – Finals and Valedictory Ceremony
9.30 AM–The audience and judges are seated in the auditorium and the Final rounds of the Tenth NLU Antitrust Moot Court Competition will begin shortly.
9.40 AM – The first speaker from the Applicant’s side, begins his speech. He is calm and is responding well to the judges, who waste no opportunity in grilling him on the law and facts. The bench is fairly active, and all the three judges are participating equally.
10.20 AM –Speaker 2 from the Applicant’s side has now taken over. She begins her submission by trying to prove that DOPE is not an enterprise, as per the statutory definition under Sections 2(h) read with Section 3(3) of the Competition Act, 2002. She relies on the lack of an economic function, to prove so. However, the judges seem unconvinced, and asks the counsel to clarify the origin of this requirement. Mr. Rahul Singh (Partner, Khaitan & Co.) questions the counsel on the intricacies involved while relying on Section 3(3) along with Section 2(h). The counsel further cites the Coordination Committee case, to prove her point.
10.35 AM –The judges inquire about the ratio of the LPG Gas Cylinder case, and its relevance to the current argument. With only 2 mins left on the clock, the counsel moves to her second issue, regarding cartelisation. She seeks an extension of time, which is granted. Towards the end of her submissions, one of the judges pose a question regarding the lack of any arguments on mitigation of penalty. The counsel confidently replies that her party is not in violation of any competition or antitrust rules, and thereby need not argue on penalty. This creates a good impression upon the judges.
10.46 AM – The first speaker from the Respondent side, takes the podium. He appears immensely composed, and requests 30 seconds to arrange his documents on the podium. His speech is structured and brief, and the judges seem to be nodding in appreciation. He begins his first submission, on the maintainability of Jeevan Pharma’s admission. Mr. Rahul Singh and Dr K.D Singh (Joint Director (Law), Competition Commission of India) question the counsel on the distinction between the ability of the bench to hear the petition, and their power to grant compensation. The Counsel calmly tries to clarify his position, with reliance on the facts and clarifications, citing the relevant paragraphs, perfectly.
11.00 AM – The counsel then moves to his second submission, regarding Jeevan Pharma’s abuse of its dominant position, and lays down the three tests required to show the same. The judges don’t seem satisfied with increased reliance on foreign cases, in light of extensive Indian jurisprudence in the area, but the counsel responds adequately. He then seeks an extension, which is happily granted by the judges. As the counsel ends his submissions and thanks the bench, the panel of judges apologise for their repeated probe into every submission of his. This lightens the atmosphere. The judges appeared quite pleased with his set of submissions.
11.24 AM – Speaker 2 now arrives at the podium, to continue her fellow counsel’s submissions. She begins her submission by laying out a roadmap, upon the judges seeking a clarification. Her issues pertain to the ability of the DG and CCR to proceed against DOPE, and DOPE’s violation of Section 3(3). The rain of questions continue, as was the case for the previous speakers. The judges question the line of argument, that the cryptic order of DG can be used against anyone. The counsel tries to clarify her position and does not lose hope.
11.35 AM –The counsel moves to her second submission and focuses on the agreement between the manufacturers, as well as between the manufacturers and the DOPE. She informally quotes Lord Denning and then the statutory definition. There is a good level of engagement between the counsel and the judges. After this speech, the judges decide against rebuttals and surrebuttals, However, they give into the finalists’ request. Speaker 1 from the respondent gives a brilliant rebuttal which leaves the audience as well as the judges in awe.
11.40 AM – The rounds have been concluded, and the finalists wait for the results.
12.15 – Valedictory ceremony commenced
Vice Chancellor, Ms. Poonam Pradhan Saxena and the Dean, Dr. I.P. Massey, with other esteemed faculty members and the judges have taken their seats in the auditorium. Senior Member of the Moot Court Committee opened the ceremony with a heart warming speech and addressed the participants waiting eagerly for the results.
12.30 –Vice Chancellor felicitates the gathering
The Vice Chancellor thanked Khaitan & Co. for their valuable partnership in organising this year’s Competition. She further stressed upon the importance of Competition Law as an emerging field. She also encouraged the participants to take part in more moot court competitions, as it helps to further one’s advocacy skills and analytical abilities.
12.35 – Dr. K.D. Singh addressed the crowd and informed the audience about CCI’s endeavours and how CCI has been happy to host the moot in association with NLU Jodhpur, for the past 10 years, and expressed his desire to continue the same for the coming years.
12.37 – Vice Chancellor presents the token of appreciation to Dr. K.D. Singh
12.38 –Mr. Manas Kumar Chaudhuri (Partner, Khaitan & Co) thanked Ms. Poonam Saxena and shared his experience as a corporate lawyer and left a very interesting question for the participants sitting in the audience, whether they are administering “justice” by being the extended arm
12.40 –Declaration of results
Mr. Rohan C. Thomas, Faculty Advisor of the Moot Court Committee, announces the results :
Second Best Student Advocate– Anshika Jain (Gujarat National Law University)
Best Student Advocate – Juhi Hirani (Institute of Law, Nirma University) and Darshan H. Patankar (Gujarat National Law University)
Best Researcher – Eesha H. Sheth (SVKM’S NMIMS Kirit P Mehta School of Law)
Best Memorial – Faculty of Law, Jamia Millia Islamia.
Best Student Advocate for the Finals – Darshan H. Patankar (GNLU)
RUNNERS UP TEAM – Symbiosis Law School, Pune.
WINNING TEAM – Gujarat National Law University.
12.45 –Closing Speech by the Co-Convener of the Moot Court Committee
Ms. Mansi Srivastava (Co-Convener, Moot Court Committee) shared her experience of being part of the organising committee for the past five years and how it feels surreal to be a part of it for one last time. She thanked the administration, the support staff, the volunteers and all the other Moot Court Committee Members for their support and contribution. She specially thanked Ms. Abhilasha Gupta and Ms. Subarna Saha (Advisors, Moot Court Committee) and Mr. Rahul Mantri (Co-Convener, Moot Court Committee) for being her pillars of strength throughout the competition and providing all the answers when she herself couldn’t find them. Lastly, she thanked Khaitan & Co. for their partnership and the Knowledge partner, SCC Online and Eastern Book Company (EBC) for providing the students with access to SCC Online that helped them in the preparation for their rounds.
12.48 – Certificate of participation given out to the participants.
The Tenth NLU Antitrust Law Moot Court Competition has thus been concluded.
The Tamil Nadu National Law University (TNNLU) was established by the Government of Tamil Nadu by an Act of State Legislature (Tamil Nadu Act No. 9 of 2012) with the laudable objectives of advancing and disseminating knowledge of law and legal processes and their role in national development. It also aims to instil a sense of responsibility in students and researchers to serve society in the field of law by developing skills with regard to advocacy, legal services, legislation and law reforms. TNNLU has organized innumerable lectures, seminars, symposia and conferences (including a recent international conference on Affirmative Action and the Sustainable Development Goal of Gender Equality), to promote legal knowledge and to make law and legal processes as efficient instruments of social development.
TNNLU has been empanelled by the CCI on September 7, 2017 under the CCI (Competition Assessment of Economic Legislations andPolicies) Guidelines, 2017 to be an Empanelled Institution (EI) to carry out Competition Assessment (CA) of the economic legislations, bills and policies. TNNLU was one among the four Universities across India to beempanelled by CCI for this prestigious work. The Centre for Competition Law (CCL), TNNLU was setup in February 2018 to create awareness among the general public about the implications of Competition Law and to carry out focused research in the field of Competition and Commercial Laws. With a view to disseminate information on promoting competition in the market, the Centre intends to conduct workshops, training programmes, publish newsletters/case summaries etc. in the domain of Competition Law.
The Competition Commission of India (CCI) at New Delhi is a regulatory body established by the Government of India. The duty of the Commission is to carry out the objectives enumerated under the Competition Act, 2002, i.e., to prohibit anti-competitive agreements, abuse of dominant position by enterprises and regulate combinations (acquisition, acquiring of control and M&A), which cause or are likely to cause an appreciable adverse effect on competition within India. The broad objective is to create and sustain fair competition in the economy that will provide a level playing field to the producers and make the markets work for the welfare of the consumers.
In 2018, MCC collaborated with CCI for the first time to organise the 1stTNNLU-CCI National Moot Court Competition from 2nd to 4th February 2018 which saw large participation from law students all over India. This year MCCis equally thrilled about collaborating with CCI once again to organise the 2ndTNNLU-CCI National Moot Court Competition, 2019.
Release of Moot Problem
30th December (Sunday) 2018
Last date for Provisional Registration
12th January (Saturday) 2019
Last date for submission of the soft copy of the Registration Form
21st January (Monday) 2019
Last date for submission of the hard copy of the Registration Form
26th January (Saturday) 2019
Last date for submission of soft copy of Memorials
20th February (Wednesday) 2019
Last Date for submission of hard copy of Memorials
24th February (Sunday) 2019
1st March (Friday) 2019 to 3rd March (Sunday) 2019
Supreme Court: A Bench comprising of A.K. Sikri and Ashok Bhushan, JJ. dismissed an appeal filed against the judgment of Bombay High Court whereby it held that Competition Commission of India had no jurisdiction to pass order in the instant matter as the issues were covered by Indian Telegraph Act, 1885 and Telecom Regulatory Authority Act, 1997 and the appropriate forum was the Telecom Dispute Settlement and Appellate Tribunal (TDSAT).
In the present matter, the Court was faced with determining the width and scope of the powers of the CCI under the Competition Act, 2002 pertaining to telecom sector vis-a-vis the scope of the powers of TRAI under the TRAI Act, 1997.
On 21-10-2013, Reliance Jio Infocomm Ltd. was granted a licence under Section 4 of the Telegraph Act by the Department of Telecom (DoT) for providing telecommunication services in all 22 circles in India. Soon thereafter, RJIL executed interconnection agreements with existing telecom operators including Airtel, Idea and Vodafone. RJIL requested these companies to augment Point of Interconnection (POIs) for access as the capacity already provided to it was causing huge POI congestion, resulting in call failures on its network. According to RJIL, these companies intentionally ignored the aforesaid request.
Subsequently, in November 2016, RJIL filed information under Section 19 of the Competition Act before the CCI, As per RJIL, the respondent service providers, along with Cellular Operators Association of India, formed a cartel and acted in an anti-competitive manner which is prohibited by the Act. The CCI passed order dated 21-4-2017 under Section 26(1) as per which it came to a prima facie conclusion that case for investigation was made out and directed the Director-General to cause investigation in the case. Aggrieved thereby, respondents filed writ petitions before the High Court which quashed the order of CCI on the ground that CCI lacked jurisdiction to entertain such complaints/information filed under Section 19 as such matter falls within the exclusive jurisdiction of another regulatory authority, namely, TRAI.
Challenging this order passed by the High Court, the appellants were before the Supreme Court.
The Supreme Court considered the matter on following points:
(a) Jurisdiction of CCI
After noting salient features of Competition Act and TRAI Act, the Court concluded that as TRAI is constituted as an expert regulatory body which specifically governs the telecom sector, the aforesaid aspects of the disputes were to be decided by TRAI in the first instance. These were jurisdictional aspects. The High Court was right in concluding that the concepts of “subscriber”, “test period”, “reasonable demand”, etc, arising out of TRAI Act and the policy so declared, are the matters within the jurisdiction of TDSAT under the TRAI Act. Only when the jurisdictional facts in the present matter were determined by the TRAI against the respondents, the next question would arise as to whether it was a result of any concerted agreement between the respondents. It would be at that stage the CCI can go into the question as to whether violation of the provisions of TRAI Act amounts to ‘abuse of dominance’ or ‘anti-competitive agreements’.
(b) Whether TRAI has the exclusive jurisdiction to deal with matters involving anti-competitive practices to the exclusion of CCI altogether?
The function that is assigned to CCI is distinct from the function of TRAI. It is within the exhaustive domain of CCI to find out as to whether a particular agreement will have an appreciable adverse effect on competition within the relevant market in India. Such functions not only come within the domain of CCI, but TRAI is not at all equipped to deal with the same.
The Court, thus, did not agree with the appellants that CCI could have dealt with this matter without availing the inquiry by TRAI. It also did not agree with the respondents that insofar as the telecom sector is concerned, the jurisdiction of the CCI under the Competition Act is totally ousted.
In incidental issues, the Court decided that the petitions field by other companies before the Bombay High court were maintainable. When such jurisdictional issues arise, the writ petition would clearly be maintainable. In view of the above discussion, the Court dismissed the appeal while upholding the decision of the High Court. [CCI v. Bharti Airtel Ltd., 2018 SCC OnLine SC 2678, decided on 05-12-2018]
The Competition Commission of India (CCI), in collaboration with National Law University, Delhi (NLUD) will organise the 2nd edition of the CCI-NLUD Competition Law Moot in March, 2019 at National Law University, Delhi.
The Organisers-Competition Commission of India is a regulatory body established by the Government of India with effect from 14 October 2003. The duty of the Commission is to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India. The Commission is also required to undertake competition advocacy, create public awareness and impart training on competition issues. National Law University, Delhi is a premier law university in India established by the National Law University Act 2007 (Delhi Act No. 1 of 2008). The University has successfully organised several moots in the past, including South-Asia Rounds Oxford Price Media Law Moot Court Competition, India Rounds of ICC Trial Moot Court Competition, Vis Pre-Moot. The University has now gained a reputation for its impeccable quality in organisation of moots. The venue of the Rounds of the Moot shall be the premises of National Law University, Delhi.
Format of the Moot-The Moot shall be based on the memorial elimination format. The top twenty (20) teams shall be selected to plead before eminent judges from the bar, bench, regulatory authorities, academia and industry in March 8-10.
The Moot Schedule-The Schedule for the Moot is as follows:
Opening of Registration: November 1, 2018
Release of the Moot Problem: November 1, 2018
Last date of Submission of Memorials: January 14, 2019
Oral Rounds: March 9-10, 2019
Eligibility-All participants must be full-time candidates presently enrolled in an undergraduate degree programme in law in India.
It is not uncommon for companies to commence integration process right after the deal documents for the transaction are signed. While the senior management of the parties delight at the prospect of speedy harmonisation between the two businesses pending regulatory clearances and formal closing, often the reasonable boundaries of legitimate information exchange are trespassed. This excessive exchange of information and coordination between parties prior to consummation of a transaction is often susceptible to antitrust laws and can lead to heavy penalties.
This issue has been scrutinised by the French Competition Authority (FCA) in a recent decision in Altice Case (Altice order) where the parties to the transaction had exchanged strategic information between signing and closing, including the acquirer intervening in the targets commercial and pricing policy requiring the target to take buyers consent for few activities, and exchanging price sensitive information. The exchange of such information was considered to be “gun jumping” and the FCA imposed a penalty of EUR 80 million on Altice.
Considering the trend of exchanging information in mergers and acquisitions, a common query that often arises is what can be done, and what cannot be, to ensure a seamless transition yet not draw the wrath of the antitrust authorities. In pursuance of answering this question, the Federal Trade Commission of United States of America has recently issued a brief guidance (FTC Guidance) explaining how the parties can reduce antitrust risk when exchanging competitively sensitive information prior to closing.
The FTC Guidance provides that the party disclosing the information should share the least amount of information needed for effective due diligence or premerger integration planning issue and such information should be narrowly tailored. If more detailed information is required for integration purposes, then resort should be taken to have clean teams to share such information. The Guidance further provides that if customer and competitive information is required to be given, then such information should be masked and consolidated and customer identities should be protected through redactions. Care should also be taken to ensure that information is not provided in tranches which can be consolidated to recover confidential information. Lastly, due care should also be taken to ensure that post due diligence or in the event of failure of the transaction finally taking place, the information provided is destructed. As for the receiving party, the FTC Guidance provides that, any employee handling the confidential information should be aware of the terms of confidentiality and clean teams should be established with third-party consultants. Clean team should also be vetted by outside counsel, and members of the clean team should have a strategy in place regarding who may access the acquired information. Clean teams should also undertake diligence to ensure that information meant for the clean team is not provided to members outside the clean team, and if such information is required to be provided, then, such information should be blinded, aggregated and vetted by an outside counsel before dissemination.
While this is an FTC Guidance, “gun jumping” issues are similar across all jurisdictions where there is a mandatory merger control regime which requires a pre-clearance before closing. India too is a mandatory suspensory regime where transactions which require a notification to the Competition Commission of India (CCI) pursuant to the Competition Act, 2002 (Act) are required not to consummate the transaction in part or whole before the CCI clearance or the expiry of the waiting period of 210 days. Since 2011, while the CCI has passed significant number of orders under Section 43-A of the Act penalising companies which have partly/wholly consummated the transaction before the same is notified to the CCI or before the receipt of approval, thus far there has been no specific decision in relation to gun jumping issues relating to information exchange. However, the CCI in its recent order in Hindustan Colas (P) Ltd./Shell India Markets (P) Ltd. has furthered its jurisprudence by holding that pre-payment of consideration constitutes gun jumping as it creates a tacit collusion which may cause an adverse effect on competition even before consummation of the transaction, effectively stating that the actions of the parties which can have a possibility of affecting the independent behaviour of the transacting parties could be amenable to antitrust scrutiny.
The issue of what affects the independent behaviour of transacting entities prior to the final closing is somewhat foggy in India. However, what is rather clear is that while the exchange of benign information between the parties pre-closing is permissible, information which is commercially or competitively sensitive in nature such as strategic pricing information etc. would constitute “gun jumping” and therefore frowned upon. Having said that, given the practicalities of conducting business, sensitive business information is often shared even prior to closing through a safeguarded mechanism such as the one mentioned in the FTC Guidance (i.e. clean teams).
In this regard, although the competition regulators recommend that clean teams comprise external advisors, employees/personnel of the parties not closely associated with the day-to-day business operation and management of the transacting companies can also safely form a part of the clean teams arrangement subject to strict non-disclosure commitments ring-fencing the confidential information’s flow beyond the clean team members. This is one of the reasons why clean teams is fairly popular with the corporate houses as it allows effective integration planning sans the risk of antitrust concerns. Finally, in case of a doubt, it is best to seek the counsel of an external advisor to ensure that an otherwise harmless integration planning is not sabotaged resulting into a heavy fine from the CCI.
Anshuman Sakle is a Partner with the Competition Law Practice at Cyril Amarchand Mangaldas and can be contacted at email@example.com. Anisha Chand is a Principal Associate with the Competition Law Practice at Cyril Amarchand Mangaldas and can be contacted at firstname.lastname@example.org. Authors would like to thank Soham Banerjee, Associate, Competition Law Practice, for his contribution.
The Indian telecom sector has witnessed continual activity in the recent years, with the entry of new players such as Reliance Jio, consolidation between existing players such as Vodafone and Idea Cellular and the exit of incumbent players such as Telenor and Tata Teleservices. This constant transformation has intensified the battle between industry players to garner market shares and attract consumers. In addition to competing in the marketplace, telecom operators have also been fighting legal battles on competition issues such as cartelisation and predatory pricing as well as on telecom issues such as interconnection. Given that the issues at the core of these matters relate to both competition and telecom laws, a turf war has arisen between the Telecom Regulatory Authority of India (TRAI) and the Competition Commission of India (CCI) re jurisdiction.
Notably, CCI had, through a letter to TRAI last year, highlighted its competence to look into matters relating to predatory pricing. The letter was a result of a consultation paper issued by TRAI in February 2017 on anti-competitive concerns in tariffs by Telecom Service Providers (TSPs). In his letter, the CCI Chairperson stipulated that “issues and questions for consultation relating to delineation of relevant market, assessment of dominance and predatory pricing” are “issues of determination for the Commission”.
Responding to CCI, TRAI stressed that it had the experience and capability to examine all matters, including competitive issues, falling within the purview of tariffs. In line with its assertion, pursuant to the Telecommunication Tariff (Sixty-third Amendment) Order, 2018 (the Amendment Order), TRAI has recently amended the Telecommunication Tariff Order, 1999 (the Tariff Order), to regulate tariffs offered by TSPs on the basis of competition law principles. Through the amendment, TRAI has introduced concepts of “significant market power” and “predatory pricing” in the Tariff Order.
According to TRAI, such regulatory powers are set out under the Telecom Regulatory Authority of India Act, 1997 (the TRAI Act), which requires it to take “measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services”. To further this mandate of facilitating competition, TRAI in its Amendment Order has provided guidance on non-predation, through the insertion of the following definitions:
(a)“Non-predation” has been defined as not indulging in predatory pricing by a service provider having significant market power;
(b) “Significant market power” has been defined as a TSP holding a market share of at least 30% in the relevant market, which is to be determined on the basis of either subscriber base or gross revenue. The Amendment Order simultaneously recognises that the concept of ‘SMP’ flows from the concept of ‘dominance’ under competition laws;
(c) “Predatory pricing” has been defined as the provision of a telecommunication service in the relevant market at a price which is below the average variable cost, with a view to reduce competition or eliminate the competitors in the relevant market—Interestingly, the Amendment Order also refers to the definition of “predatory pricing” under the Competition Act, 2002 (the Competition Act) to emphasise that intent is the key;
(d) “Relevant market” has been defined as the market which may be determined by TRAI with reference to the relevant product market for distinct telecommunication services (such as Wireline Access Service, National Long Distance Service, International Long Distance Service) and the relevant geographical market;
(e) “Relevant product market” has been defined as the market in respect of a distinct telecommunication service for which the licensor grants licence to the TSP;
(f)“Relevant geographic market” has been defined as a market comprising the respective licence service area for which the licensor grants licence to the TSPs to provide distinct telecommunication services.
In addition to requiring the TSPs to conduct a self-check of tariffs at the time of reporting it to TRAI in order to ensure that there is no predation, the Amendment Order also confers suo motu powers on TRAI to examine tariffs to determine the occurrence of any predatory pricing, thus extending its jurisdiction to ex-post abusive conduct. In case of predation, a penalty not exceeding INR 50 lakhs per tariff plan for each service area can be imposed by TRAI.
Post the introduction of the Amendment Order however, officials of TRAI have clarified that dominant operators may match tariffs offered by a new entrant, and such actions would not be seen as predatory.
On the other hand, the Competition Act established a sector agnostic regulator to prevent practices having adverse effect on competition and to promote and sustain competition in markets. The Competition Act sets out specific prerogatives of CCI to prohibit anti-competitive agreements and abuse of dominance. The abusive practices identified include predatory pricing. However, affording due consideration to the market dynamics, the Competition Act requires CCI to holistically examine such conduct. The in-depth examination required by CCI includes the delineation of the relevant market on the basis of factors such as end-use, pricing, consumer preferences, regulatory barriers, transport costs, etc. Subsequently, CCI is required to make a determination of dominance giving due regard not only to the market share of the enterprise, but also to its size and resources, economic power, entry barriers, countervailing buyer power, market structure, etc. Similar to clarifications from TRAI officials, the Competition Act also provides for a carve-out against predatory pricing if such pricing has been adopted to “meet the competition”.
However, contrary to the bright-line test of 30% under the Amendment Order, CCI’s decisional practice repeatedly cautions against adopting a blanket market share test for detection of dominance. As noted by CCI’s Chairperson in the letter to TRAI, market interactions should ideally be assessed on a case-by-case basis without any presumptions based on a formulaic framework. CCI’s holistic approach is evidenced by its recent orders in the telecom sector, where it has approved mergers of key telecom players, despite the significant aggregate market shares, after having weighed in factors such as buyer power, increased switching, absence of switching costs, presence of other players, dynamic nature of the market, etc.
The difference in the regulatory frameworks gives a preview of the contrasting approach to be adopted by the regulators for the same contravention and the conflicting regulatory views that the industry is likely to witness in the coming months. Moreover, while contrasting views may make compliance by TSPs difficult, similar findings may also lead to double jeopardy.
The regulatory conflict has already surfaced before courts, with the Bombay High Court finding that the Competition Act itself is not sufficient to decide and deal with the issues arising out of the provisions of TRAI Act and the contract conditions, under the relevant regulations. The appeal to the Bombay High Court had been filed against a prima facie order of the CCI finding that TSPs, such as Airtel and Vodafone, had cartelised to deny adequate point of interconnections to Reliance Jio to thwart its entry into the telecom market. The decision of the High Court has now been appealed to the Supreme Court.
While the way forward is unknown, this fight for regulatory supremacy can only end with the CCI and TRAI joining forces to coordinate and consult with each other in matters that involve questions of competition and telecom laws. This will also be in line with the intent of the legislators who foresaw this situation and included a provision under the Competition Act for a reference of matters inter se CCI and other statutory regulators.
Anshuman Sakle is a Partner with the Competition Law Practice at Cyril Amarchand Mangaldas and can be contacted at email@example.com. Arunima Chandra is a Senior Associate with the Competition Law Practice at Cyril Amarchand Mangaldas and can be contacted at firstname.lastname@example.org.
The Competition Act, 2002 (the Act) is a giant step towards reformation of anti-competitive policies over its precursor, the Monopolistic and Restrictive Trade Practice Act, 1969 (MRTP). Becoming fully operational in 2009, the Competition Commission of India (CCI) in these 9 years has witnessed varying kinds of cases coming up related to issues of economic concentration and unfair trade, with its jurisdiction extending to a wide area of e-commerce cases involving both online and offline transactions. It has brought about many changes and has had wide-ranging effects on the business sector, both private and public.
Extraterritorial jurisdiction: To infinity and beyond
The Act incorporates extraterritorial jurisdiction as under Section 32 of the Act which is based on the “effects doctrine”. The absence of such provision under the MRTP Act barred the scope of action against any anti-competitive conduct involving imports, and foreign cartels in particular. The Act has categorically removed this restriction, thus having an enabling effect and giving CCI the power to take action against any foreign business entity indulging in any sorts of anti-competitive behaviour.
However, its application remains contentious as far as the turnaround time for the approval of combinations and quick decision making is concerned. There exist apprehensions if the CCI is logistically equipped sufficiently to strike a chord between the international competition law developments and domestic legislation and responsibilities. If the law does have extraterritorial reach and a domestic court or tribunal has jurisdiction to hear the case, practical problems of enforcement with respect to the obtaining of evidence and the implementation of any fines or penalties are likely to arise.
The CCI, despite being well empowered has not been successful in laying down any procedures or formulating any regulations to govern the time frame to act in matters falling outside India’s territorial jurisdiction. In today’s scenario, corporate dealing involving MNC’s often result in the creation of different synergies within different countries and hence are likely to give rise to conflicting opinions about the issue within competition regulators having jurisdiction over the case involved. Considering the paucity of the jurisprudence on this issue, the stance of the CCI in the future matters would be of huge relevance in the determination of any well-settled position.
Penalising the guilt: The is and the ought
CCI imposes a plethora of penalties for the reasons enshrined in the section and in Part VI of the act with the entire funds being credited to the Consolidated Fund of India. In its first investigation, CCI had imposed a penalty of Rs 1 lakh on movie producers colluding against multiplexes. However, recent trends show that former was nominal imposition for having an amicable start with penalties being imposed in huge proportions in the times to come. For example, the CCI did impose an equally hefty penalty of Rs 2500 crores in Automobiles case, Rs 1700 crores in the case against Maharashtra State Power Generation Company, etc.
In the last 9 years, the CCI has taken a different turn, recently approving the first ever leniency application for a cartel member because the partner of the firm confessed to the anti-competitive practices which prompted the CCI to reduce the fine by 75%. It recently notified the Competition Commission of India Lesser Penalty Amendment Regulations, 2017, stating that a confession about Cartelisation (if witness was complicit) will provide them with an amnesty/leniency from the imposed liability. This depicts that CCI is going through a streamlined approach adopting the propensity to charge more proportionally.
In Iridium India Telecom v. Motorola Inc., the Supreme Court held that companies can be prosecuted for offences involving mens rea with the intent and direction provided by the directors and promoters being attributable to the company. However, under the Act there exists a criminal sanction only for non-compliance of the order passed with no specific provision of such liability for anti-competitive practices. Keeping in view, these aspects the Act needs amendment for incorporation of criminal sanction to maintain the deterrence in conformity with Section 6 of the Act.
Appeals of CCI orders: Hear Hear
The increasing number of appeals to High Courts against the Competition Appellate Tribunal (COMPAT), the Competition Statutory Appellate Tribunal has not be welcomed positively since it leads to the overlapping of powers and multiplicity of efforts. In State of M.P. v. Nerbudda Valley Refrigerated Products Co. (P) Ltd., the Supreme Court held that any writ petition cannot be accepted by any High Court if a statutory appellate mechanism exists. On the contrary, Paradip Port Trust v. Sales Tax Officer laid down that no bar on such appeal to the High Court exists when there is any violation or non-compliance with the principles of natural justice or exceeding of jurisdictional limits by Compat, even if there exists any statutory appeal mechanism.
In 2013, the position was finally settled that such writ petitions filed against the CCI order are procedurally unfair as they lead to a direct appeal to High Court by surpassing COMPAT’s authority. In the Automobiles case between Mahindra and Tata Motors the Court held the order should be challenged before COMPAT since it is functional. High Courts are not to interfere at this stage unless it is found to be a case of gross transgression of the jurisdiction or results in the breach of natural justice principles. Otherwise, constitutionally, Article 226 is of a discretionary nature granting power to exercise the same to the High Court. Since most of the cases of appeal deal with statutory authority such conflict of jurisdiction requires a settled position of law.
Case closed or not
According to the Act, the Commission on the receipt of a complaint has to direct the initiation of an investigation into the allegations, based on which the Director General is supposed to submit a report. Though the Act explicitly grants CCI the authority to direct the Director General to investigate and close the matter if he detects no contravention and furthers the investigation, it does not provide for closure of the case even if the Director General finds any contravention with the Act during the investigation. Section 26 of the Act fails to provide for a situation where the Commission may not agree with the Director General’s findings after it finds a contravention, often nullifying the power of the parties to appeal to the higher authorities such as to the COMPAT or to the Supreme Court after the case has been struck down by the Commission.
Such a lacuna inherent in the Act has often led to a dispute about the powers granted under the Act to CCI and the authority and binding value of the Director General’s report. This contention was laid to rest in Gulf Oil Corp. Ltd. v. CCI where the Court held that Director General’s report merely has a recommendatory nature and the CCI need not proceed under Section 26(7) in every case where it disagrees with the Director General’s report. There have been situations where cases have been closed by the Commission despite Director General stating otherwise, but this uncertainty can be resolved only when there is either a legislative amendment or by way of some purposive interpretation the judiciary.
Lag due to the lack: Recommendation for way ahead
The competition law requires multi-disciplinary inputs in its implementation and enforcement. The data reflects the inability of CCI to keep pace with the new market players due to technological advancements, insufficiency of data and shortage in staff and panel experts, thus affecting the process of expediting investigation and adjudication of matters. The initial few years witnessed a trend of delay in the disposal of cases due to lacking number of officials requiring appointment of experts from legal and economic backgrounds at different levels to help handle these cases. Resultantly, the performance has improved with respect to the disposal of case with the average disposal rate of merger control cases reducing from around 16.5 days in 2011-2012 to around 26.4 days in 2015-2016.
To deal with the existing laxity, greater man power is needed which is presently built up through deputations and imports of officers from other departments. Thus a specialised task force would be more advantageous that this deputation based enforcement since such enforcement needs the expertise and sufficiency of manpower oriented to handle anti-competitive wrongdoings to move ahead. Thus, we recommend instituting a separate cadre for the CCI through the Indian competition services for the better and speedier addressing of the matters at hand. Under this service, we recommend to institutionalise the existing task force which would remove arbitrariness in the existing subjective standards.
The reason why CCI lags behind is because of its inability to keep pace with the latest advancements. An institutionalised workforce would address these concerns by providing a better equipped organisation structure that would facilitate in disposal mechanism, etc. The Indian competition regime has come a long way in the fields analysed above and it still has a long way to go to maintain the “fairplay” in Indian markets.
* IIIrd year students, BA, LLB (Hons.), Batch of 2021, National Law University, Delhi.
 Fairplay, Quarterly newsletter of CCI (2016) p. 19.
 Kartik Maheshwari, Simonc Reis Extraterritorial Application of the Competition Act and its Impact, (2012) CompLR 144, 148.
A One Day English-Tamil-English Translation Workshop is to be organised by the Centre for Competition Law (CCL), Tamil Nadu National Law School (TNNLS) University, Tiruchirappalli on 28th July 2018. The workshop shall be on translation of Legal Documents from English to Tamil with Specific Reference to Competition Law. The workshop is restricted to 2nd, 3rd and 4th-year TNNLS students. Registration closes on July 21 (Saturday), 2018 (11:59 pm IST). Selection to the workshop will be based on a two stage process. The first stage involves application before the prescribed deadline and next stage will require the students to translate a page long selective content from the Competition Advocacy Booklet from English to Tamil, following which, the same will be scrutinised by the CCL members, TNNLS.
Topic: Translation of Legal Documents from English to Tamil with Specific Reference to Competition Law
Content Type: Classroom
Hon’ble Justice Prabha Sridevan, (Retd.) Madras High Court;
Representative from the Law Department, Government of Tamil Nadu;
Professor Palaniarangasamy (Retd.), Tamil University, Thanjavur;
Two Representatives from the Competition Commission of India (CCI), New Delhi
Duration: 6 hoursTime/Venue: 10.00 am to 04.30 pm on Saturday July 28, 2018 at the Seminar Hall, UG Block, TNNLS
Target Audience: Those who need to learn and apply English-Tamil-English translation skills in your work.
For further details, please contact: Mr. S. Mohammed Azaad, Workshop Coordinator & Assistant Professor of Law, +91 – 98404 81219
Mr. C.R. Shriram, Workshop Coordinator & Assistant Professor of Law, +91 – 97907 98081
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]
Competition Commission of India (CCI): CCI took up the case suo motu under Section 19 of the Competition Act, 2002 (‘the Act’) based on the disclosure by Globecast India Private Limited and Globecast Asia Private Limited (collectively referred to as ‘Globecast’) under Section 46 of the Act read with the Competition Commission of India (Lesser Penalty) Regulations, 2009 (‘Lesser Penalty Regulations’). Essel Shyam Communication Limited (ESCL), now Planetcast Media Services Limited, subsequently also approached CCI as lesser penalty applicant during investigation.
CCI imposed penalty on Globecast, a subsidiary of the Orange Group (earlier France Telecom Group), a global service provider of broadcasting services and ESCL, a technology service provider in India since 1998 with specialisation in media broadcasting, for indulging in bid-rigging in tenders floated by sports broadcasters for procurement of end-to-end broadcasting services i.e. ground segment services as well as satellite bandwidth services, for various sporting events during the period July 2011- May 2012 including Indian Premier League 2012 (IPL-2012).
On the basis of the evidence collected in the case, CCI found that ESCL and Globecast operated a cartel amongst them in the various sporting events held during the years 2011-12 including IPL-2012. While submitting bids for the tender floated by various broadcasters during the period July 2011-May 2012 for provision of end-to-end broadcasting services, they exchanged information and quoted bid prices as per the arrangements arrived at amongst them. As a result, they committed an infringement of the provisions of Section 3(3)(d) read with Section 3(1) of the Act during this period.
Considering contravention of provisions of the Act by Globecast and ESCL, an amount of INR 31.94 Crores and INR 1.33 Crores was computed as leviable penalty on ESCL and Globecast, respectively, in terms of the proviso to Section 27(b) of the Act. While computing leviable penalty, CCI took into consideration all relevant factors including duration of cartel, mitigating factors, etc. and decided to levy penalty at the rate of 1.5 times of their profit for the period July 2011–May 2012. Additionally, considering totality of facts and circumstances of the case, penalty leviable on individual officials of Globecast and ESCL was computed at the rate of 10 per cent of the average of their income for preceding three years.
Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided by the evidences furnished by the lesser penalty applicants in establishing the existence of cartel, CCI granted Globecast and its individuals 100 percent reduction in the penalty and 30 percent reduction in penalty to ESCL and its individuals. Pursuant to reduction, penalty imposed on ESCL was INR 22.36 Crores. No penalty was imposed on Globecast. [In re, Cartelisation by broadcasting service providers by rigging the bids submitted in response to the tenders floated by Sports Broadcasters, Suo Motu Case No. 02 of 2013, decided on 11-07-2018]
Competition Commission of India (CCI): The case primarily concerned access to upstream LPG terminalling infrastructure at Vishakhapatnam Port, which comprises several components viz. unloading arms at the jetty, blender, heat exchanger and cavern (storage facility). This infrastructure, being operated by SALPG, is used for handling imports of propane and butane and their blending into LPG.
East India Petroleum Pvt. Ltd. (EIPL) filed an information with CCI under Section 19(1)(a) of the Competition Act, 2002 alleging that while allowing it to use the blender, SALPG has been insisting on the mandatory use of cavern. This resulted in paying significant charges to SALPG. The OMCs were thus not finding the LPG terminalling services offered by EIPL economically viable and were constrained to avail the terminalling services offered by SALPG only. To address this, EIPL first proposed to use the blender of SALPG and thereafter, take the output directly to the cross-country pipeline, bypassing the cavern. Since this was not agreeable to SALPG which allowed bypass of the cavern to the extent of 25 percent only, EIPL proposed to install its own blender and sought a tap-out and tap-in from the propane and butane lines to discharge blended LPG, bypassing the cavern. This was also not acceptable to SALPG. Another proposal seeking tap-out from the propane and butane lines at the jetty to EIPL own blender and construction of its own infrastructure between the blender and storage facility was also refused by SALPG. All this was alleged to be an abuse of dominant position by SALPG.
After a detailed investigation by the Director-General, CCI conducted a further inquiry into the matter and found SALPG enjoys a dominant position in the market for upstream terminalling services at Visakhapatnam Port. SALPG sought to justify its conduct on the grounds of safety as well as efficiency and business justification. However, after a detailed examination of claims made and hearing the parties, the Commission held the impugned conduct of SALPG to be in contravention of the provisions of Section 4 of the Act. Accordingly, CCI directed that:
(a) SALPG shall not insist mandatory use of its cavern and shall allow bypass of cavern for both pre-mixed and blended LPG, without any restrictions; and/or
(b) SALPG shall allow access to its competitors, potential as well as existing, to the terminalling infrastructure at Visakhapatnam Port, subject to compliance with all safety integrity and other requirements under applicable laws and regulations framed thereunder. Such an access should avoid additional cost burden on SALPG, and the entity seeking access shall bear the cost, if any, towards necessary changes to the existing infrastructure. Under this option also, SALPG shall not insist on the mandatory use of cavern and it shall allow bypass of the cavern, without any restriction. SALPG shall extend full cooperation for the study/audit undertaken by VPT in relation to the remedies ordered herein. Needless to say, SALPG shall not do anything raising rival’s cost.
A penalty of INR 19.07 crore has also been imposed on SALPG for indulging into the anticompetitive conduct. [East India Petroleum Pvt. Ltd. (EIPL) v. South Asia LPG Company Pvt. Ltd. (SALPG), Case No. 76/2011, order dated 11-07-2018]
Supplementing the Government of India’s vision for e-Governance and Digital India Programme, the Competition Commission of India (CCI) launched an Online Guidance System for determining notifiability of merger & acquisitions (combinations) in terms of the Competition Act, 2002. The Guidance System has been named as “Do It Yourself (DIY): A notifiability check for mergers & acquisitions under the Competition Act, 2002”.
The online guidance system has been launched as part of CCI’s outreach initiatives and measures to simplify compliance requirements regarding combinations. The interactive online application has been developed based on relevant provisions of the Competition Act, 2002, relevant regulations issued thereunder and exemption notifications issued by the Ministry of Corporate Affairs. This application envisages a staged process to guide the stakeholders in determining whether a merger/acquisition is notifiable to CCI.
Competition Commission of India (CCI): Disposing of an interim application under Section 33 of the Competition Act, 2002 (‘the Act’) by the informant Indian National Shipowners’ Association (‘INSA’ or ‘Informant’) against Oil and Natural Gas Corporation Limited (‘ONGC’ or ‘Opposite Party’) the Commission reiterated the conditions that have to be satisfied before interim relief can be granted under this section. The main clause which was alleged to be one-sided and unfair in this case was Clause 14.2 of the Special Contract Conditions (hereinafter, referred to as ‘SCC’), giving unilateral right of termination without assigning any reason.
The Commission had, vide its order dated 12.06.2018 passed under Section 26(1) of the Act, held the Opposite Party to be prima facie dominant in the relevant market. The Commission was of the view that the stipulation of Clause 14.2 of the SCC was one-sided as it gives an unfettered right to a dominant party to use it in its favour without giving any reciprocal right to the other party and this was prima facie in contravention of the provisions of Section 4(2)(a)(i) of the Act. Further, the manner in which the termination notices were sent and then consequently withdrawn by the Opposite Party on receiving a reduced offer from the members of the Informant, indicated the imperious approach adopted by the Opposite Party. Accordingly, the Commission directed the DG to carry out a detailed investigation.
In this Application, Commission noted that the principles for deciding the interim relief application under Section 33 of the Act were laid down by the Supreme Court in CCI v. SAIL, (2010) 10 SCC 744, wherein it was held that while recording a reasoned order under Section 33 of the Act, the Commission shall, inter alia, ensure fulfilment of the following conditions:
a) record its satisfaction (which has to be of much higher degree than formation of a prima facie view under Section 26(1) of the Act) in clear terms that an act in contravention of the stated provisions has been committed and continues to be committed or is about to be committed;
b) it is necessary to issue order of restraint; and
c) from the record before the Commission, there is every likelihood that the party to the lis would suffer irreparable and irretrievable damage, or there is definite apprehension that it would have adverse effect on competition in the market.
The Commission found that all these conditions were satisfied in this case. However, by extending the undertaking by ONGC to not to invoke Clause 14.2 of SCC till further order the Commission denied to grant the interim relief. [In re, Indian National Shipowners’ Association v. Oil and Natural Gas Corporation Limited, Case No. 01 of 2018 order dated 15.06.2018]
The Union Cabinet has given its approval for rightsizing the Competition Commission of India (CCI) from 1 Chairperson and 6 Members (totalling seven) to 1 Chairperson and 3 members (totalling 4) by not filling the existing vacancies of 2 members and 1 more additional vacancy, which is expected in September, 2018 when one of the present incumbents will complete his term.
The proposal is expected to result in reduction of 3 posts of members of the Commission in pursuance of the Governments objective of “Minimum Government – Maximum Governance”.
As part of the Governments objective of easing the mergers and amalgamation process in the country, the Ministry had revised deminimis levels in 2017, which have been made applicable for all forms of combinations and the methodology for computing assets and turnover of the target involved in such combinations, has been spelt out. This has led to reduction in the notices that enterprises are mandated to submit to the Commission, while entering into combinations, thereby reducing the load on the Commission.
The faster turnaround in hearings is expected to result in speedier approvals, thereby stimulating the business processes of corporates and resulting in greater employment opportunities in the country.
Section 8(1) of the Competition Act, 2002 (the Act) provides that the Commission shall consist of a Chairperson and not less than 2 and not more than 6 members. Presently, the Chairperson and 4 members are in position.
An initial limit of 1 Chairperson and not more than 10 members was provided in the Act, keeping in view the requirement of creating a Principal Bench, other Additional Bench or Mergers Bench, comprising at least 2 members each, in places as notified by the Central Government. In the Competition (Amendment) Act, 2007 (39 of 2007), Section 22 of the Act was amended removing the provision for creation of Benches. In the same Amendment Act, while the Competition Appellate Tribunal (CAT) comprising one Chairperson and 2 members was created, the size of the Commission itself was not commensurately reduced and was kept at 1 Chairperson and not less than 2 but not more than 6 members.
The Commission has been functioning as a collegium right from its inception. In several major jurisdictions such as in Japan, USA and U.K. Competition Authorities are of a similar size.
Competition Commission of India (CCI): The CCI has passed final order in two cases involving bid rigging/collusion in three tenders floated by Pune Municipal Corporation for Design, Supply, Installation, Commissioning, Operation and Maintenance of Municipal Organic and Inorganic Solid Waste Processing Plant(s). These cases were taken up by CCI suo motu under Section 19 of the Act based on the disclosure by firms under Section 46 of the Competition Act, 2002 (‘the Act’) read with the Competition Commission of India (Lesser Penalty) Regulations, 2009 (‘Lesser Penalty Regulations’). All firms in these cases had approached CCI as lesser penalty applicants.
While in one case, the tenders pertained to Financial Year 2013-14, in other case the tender pertained to Financial Year 2014-15. From the evidence gathered during investigation, CCI found that there was bid rigging/collusive bidding in the Tender Nos. 21 and 29 of 2013 and Tender No. 59 of 2014 floated by Pune Municipal Corporation for Solid Waste Processing Plant(s), in contravention of Section 3(3)(d) read with Section 3(1) of the Act by way of submitting proxy/ cover bids.
In case involving tender floated in Financial Year 2013-14 penalty was imposed on four firms in terms of Section 27(b) of the Act at the rate of 10 percent of their average turnover for the years 2011-12, 2012-13 and 2013-14 i.e. three years preceding the year in which collusion took place. An amount of INR 46.45 Lakhs was imposed on Saara Traders Pvt. Ltd. (Saara), INR 33 Lakhs on Ecoman Enviro Solutions Pvt. Ltd. (‘Ecoman’), INR 11 Lakhs on Fortified Security Solutions (‘Fortified’) and INR 26.40 Lakhs on Raghunath Industry Pvt. Ltd. (‘Raghunath’). The penalty was also imposed on individual officials of three firms, namely, Saara, Ecoman and Raghunath at the rate of 10 percent of their average income for the same three years. No penalty was imposed on individual of Fortified as it is a proprietorship firm. Further, in view of penalty already levied in Case No. 50 of 2015 for infringement during the period 2014-15, no penalty was levied in case involving tender floated in financial year 2014-15.
Keeping in view the modus operandi of the cartel, the stage at which the lesser penalty application was filed, the evidences gathered by the DG independent of lesser penalty application and co-operation extended in conjunction with the value addition provided in establishing the existence of cartel, CCI granted 50 percent reduction in penalty to Saara and its individuals than otherwise leviable. Pursuant to reduction, penalty imposed on Saara was INR 23.22 Lakh and INR 74,513 on its individual. [In re, Cartelization in Tender Nos. 21 and 28 of 2013 of Pune Municipal Corporation for Solid Waste Processing, Suo Motu Cases Nos. 03 and 04 of 2016, decided on 31.5.2018]
Competition Commission of India: CCI imposed penalty on three leading Indian Zinc-Carbon Dry Cell Battery manufacturers – Eveready Industries India Ltd. (‘Eveready’), Indo National Ltd. (‘Nippo’), Panasonic Energy India Co. Ltd. (‘Panasonic’) and their association AIDCM (Association of Indian Dry Cell Manufacturers) for colluding to fix prices of zinc-carbon dry cell battery in India. CCI invoked the provisions of Section 46 of the Competition Act, 2002 (‘the Act’) read with the Competition Commission of India (Lesser Penalty) Regulations, 2009 (‘Lesser Penalty Regulations’) to reduce the penalty imposed upon Panasonic, Eveready and Nippo by 100 percent, 30 percent and 20 percent respectively .
The case against these battery manufacturers was taken up by CCI suo motu under Section 19 of the Act based on the disclosure by Panasonic under Section 46 of the Act read with the Lesser Penalty Regulations. During investigation, DG (Investigation), CCI in exercise of the powers vested with it under Section 41(3) of the Act carried out simultaneous search and seizure operations at the premises of Eveready, Nippo and Panasonic on 23.8.2016 and seized incriminating material and documents there from. Subsequently, while the investigation was in progress and report from the DG was pending, Eveready and Nippo, approached CCI as lesser penalty applicants.
From the evidence collected, CCI found that the three battery manufacturers, facilitated by AIDCM, had indulged in anti-competitive conduct of price coordination, limiting production/ supply as well as market allocation in contravention of the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act. It was observed that the conduct was continuing from 2008, which is prior to 20.5.2009, the date on which Section 3 of the Act became enforceable, and up till 23.8.2016 i.e. the date of search and seizure operations by the DG.
Considering contravention of provisions of the Act, an amount of Rs. 245.07 crore, Rs. 52.82 crore and Rs. 74.68 crore was computed as leviable penalty on three battery manufacturers i.e. Eveready, Nippo and Panasonic, respectively, in terms of the proviso to Section 27(b) of the Act. While computing leviable penalty, CCI took into consideration all relevant factors including duration of cartel, industry conditions, etc. and decided to levy penalty on the three battery manufacturers at the rate of 1.25 times of their profit for each year from 2009-10 to 2016-17. Also, penalty of Rs. 1.85 Lakh was levied on AIDCM at the rate of 10 percent of average of its receipts for preceding three years. Additionally, considering totality of facts and circumstances of the case, penalty leviable on individual officials/office bearers of the three battery manufacturers and AIDCM was computed at the rate of 10 percent of the average of their income for preceding three years.
Considering the stage at which the lesser penalty application was filed and the co-operation extended in conjunction with the value addition provided in establishing the existence of cartel, CCI granted Panasonic and its individuals 100 percent reduction in the penalty than was otherwise leviable. Eveready and Nippo, along with their individuals, were granted 30 and 20 percent reduction in penalty, reducing it to Rs. 171.55 crore and Rs. 42.26 crore respectively. No penalty was imposed on Panasonic. [In re, Cartelisation in respect of zinc carbon dry cell batteries market in India, 2018 SCC OnLine CCI 5, order decided on 19-04-2018]
After three years of rigorous investigation, the Competition Commission of India (CCI) has announced its landmark decision 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 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.
Competition Commission of India (CCI): While observing that Magicbricks.com along with four other real estate websites is not dominant in the market of “services of real estate brokers/ agents in India”, CCI dismissed the allegations of monopolization of real estate broking business in India by the said websites. CCI was hearing an information filed by Confederation of Real Estate Brokers’ Association of India having combined membership of approximately 20,000 real estate brokers, against Magicbricks.com, Housing.com, 99acres.com, Commonfloor.com and Nobroker.in. It was alleged in the information that these online real estate listing portals have abused their dominant position by advertising ‘No Brokerage Policy’ (NBP) on their websites, mobile applications, newspapers etc. and imposed unfair and discriminatory conditions on the traditional real estate brokers who are doing real estate business on the basis of commission. It was further alleged that the websites were practicing ‘No NBP’ either through auction of properties or through the offer of ‘buy directly from owners’ on their websites and newspaper advertisements in order to eliminate competition and real estate brokers from the market. It was also averred in the information that due to conduct of said online real estate listing portals in indulging NBP or charging much less as brokerage fee compared to the traditional brokerage fee of 2% of the sale/ purchase value of a property while undertaking a real estate transaction or public auctioning of properties, traditional real estate brokers are getting eliminated from the market. After hearing both the parties and perusal of material on record, CCI observed that in India, no licence or registration is required to undertake the brokerage business in real estate sector, thus, the presence of a large number of listing sites and traditional brokers in the said relevant market pose competitive restraint on each other and hence, no specific player can act independently of the market forces and affect the consumers or other players in its favour. The Commission also perused the website ranking figures of Alexa.com submitted by the Association and noted that based on the said figures it was not possible to gauge the dominance of any of the five real estate websites in the relevant market because the ranking was limited to only the websites/ portals and does not include the off-line brokers. CCI further noted that in absence of dominance of any of the five real estate websites in the relevant market, there can be no case of contravention of the provisions of Section 4 of the Competition Act against any of the five real estate websites. [Confederation of Real Estate Brokers’ Association of India v. Magicbricks.com,  CCI 19, decided on May 3, 2016]