Competition law in regulated sectors: jurisdiction upheld, but no anti-competitive agreement or abuse proved on the evidence.

The Competition Commission held that it could examine competition concerns in a regulated electricity sector despite the sectoral regulator's role, because allegations of abuse of dominance and anti-competitive conduct fell within its mandate. It found no evidence of an agreement or concerted practice and therefore no contravention of Section 3. The relevant market was the distribution and supply of electricity in each licensee's licensed area, and the opposite parties were treated as dominant because they held exclusive licences with no effective competing source. Abuse of dominance was not proved: the complaint-driven sample on allegedly fast-running meters was too small and non-representative, and meters within the permissible BIS error range did not, by themselves, establish misconduct.

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Issues: (i) Whether the Commission had jurisdiction notwithstanding the sectoral regulator's role; (ii) Whether there was any contravention of the prohibition against anti-competitive agreement or concerted practice under Section 3; (iii) What was the relevant market; (iv) Whether the opposite parties were dominant in that market; and (v) Whether abuse of dominance was established.

Issue (i): Whether the Commission had jurisdiction notwithstanding the sectoral regulator's role.

Analysis: The Commission noted that tariff and sector-specific technical matters lay within the electricity regulator's domain, but competition concerns involving alleged abuse of dominance and anti-competitive conduct remained within the Competition Commission's mandate. The sectoral regulator itself indicated that issues of alleged abuse of dominance could be examined under the competition law framework.

Conclusion: The objection to jurisdiction was rejected and the Commission held that it could examine the competition issues.

Issue (ii): Whether there was any contravention of the prohibition against anti-competitive agreement or concerted practice under Section 3.

Analysis: No material was produced to show any agreement, arrangement, understanding, or action in concert among the opposite parties. The investigation also did not disclose evidence that the impugned conduct was the product of a collusive agreement or concerted practice rather than regulatory and operational arrangements.

Conclusion: No contravention of Section 3 was established.

Issue (iii): What was the relevant market.

Analysis: The majority held that electricity supply in the licensed area of each distribution company was the relevant product and geographic market. It declined to treat meters or billing as separate markets on the facts of the case and treated the licensed distribution areas as distinct homogeneous geographic markets.

Conclusion: The relevant market was distribution and supply of electricity in the respective licensed areas of the opposite parties.

Issue (iv): Whether the opposite parties were dominant in that market.

Analysis: The opposite parties held exclusive licences for supply in their respective areas, faced no parallel supplier in those areas, and consumers had no effective alternative source for supply. On that structure, each opposite party could operate independently of competitive forces.

Conclusion: The opposite parties were held to be dominant in their respective licensed areas.

Issue (v): Whether abuse of dominance was established.

Analysis: The majority found the evidence of allegedly fast-running meters insufficiently representative, as the sample was complaint-driven and minuscule compared with the total consumer base. It also held that meters within the permissible BIS error range could not, by that fact alone, support a finding of abuse. On the material before it, the alleged overcharging and unfair condition were not proved to the required standard.

Conclusion: Abuse of dominance was not established.

Final Conclusion: The information did not result in any finding of violation under the competition law against the opposite parties, and the proceedings were closed. A separate dissent took the view that abuse of dominance was established in the meter market and that directions should issue.

Ratio Decidendi: Where competition concerns arise within a regulated sector, the competition authority may exercise jurisdiction over alleged abuse of dominance, but liability under Section 4 requires cogent evidence of dominance-related conduct causing the impugned anti-competitive effect; a complaint-driven, non-representative sample is insufficient to prove abuse.

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