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2024 (11) TMI 941 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues: Alleged contravention of Sections 3 and 4 of the Competition Act by Toyota Kirloskar Motors Pvt. Ltd. and Uttam Toyota.

The judgment pertains to an Information filed under Section 19(1) of the Competition Act, 2002, alleging contravention of Sections 3 and 4 of the Act by Toyota Kirloskar Motors Pvt. Ltd. and Uttam Toyota. The Informant booked a car with Uttam Toyota, alleging that despite being assured of delivery within two months, the timeline was extended to eight months. The Informant also claimed that some customers received their cars before him, leading to his booked car being delivered to someone else. The Informant raised concerns about unfair treatment and arbitrary practices by the dealers. Additionally, the Informant highlighted the role of Direct Sales Agents (DSAs) who allegedly promised guaranteed early delivery for a premium. The Informant accused the dealers of favoring certain consumers, creating artificial scarcity, and imposing Resale Price Maintenance (RPM), affecting competition adversely.

The response from the dealers emphasized that the waiting period was communicated to the Informant, and they denied prioritizing other customers over him. They attributed delays to external factors like semiconductor shortages. The dealers refuted the allegations of unfair practices and defended their actions in response to the Informant's legal notices. The Informant sought various reliefs, including investigation by the Director General, cessation of abuse of dominant position, provision of requested information, imposition of penalties, and other appropriate orders.

The Commission analyzed the allegations and responses, focusing on the waiting period and accessory prices. It concluded that the issues primarily involved a dispute between the Informant and the dealers, lacking broader anti-competitive implications. The Commission found no evidence of unfair pricing practices or discriminatory behavior that would warrant antitrust scrutiny. The allegation of RPM was not substantiated with evidence of an agreement causing an appreciable adverse effect on competition. Consequently, the Commission closed the matter under Section 26(2) of the Act, stating no prima facie case of contravention of Sections 3 or 4 was established. The decision was communicated to the Informant through the Secretary.

CCI dismisses case against automotive manufacturer for alleged dominant position abuse and anti-competitive practices under Sections 3 and 4
CCI dismissed allegations against automotive manufacturer and dealer regarding abuse of dominant position and anti-competitive practices. Informant complained about extended delivery times, selective delivery policies, premium demands, resale price maintenance, and forced accessory purchases. CCI found these constituted inter se disputes without market-wide anti-competitive effects. Extended waiting periods were attributed to demand-supply dynamics rather than anti-competitive behavior. Informant failed to substantiate RPM allegations or demonstrate unfair pricing practices. CCI concluded no prima facie case existed under Sections 3 or 4 of Competition Act, 2002, directing closure under Section 26(2).

Abuse of dominant position - appreciable adverse effect on competition - resale price maintenance - prima facie case - inter se dispute - closure of inquiry under Section 26(2) of the Competition Act, 2002Abuse of dominant position - appreciable adverse effect on competition - inter se dispute - prima facie case - Allegations of abuse of dominant position and AAEC arising from waiting periods, pick-and-choose delivery and accessory pricing - HELD THAT: - The Commission examined the Informant's complaints about change in delivery timelines, alleged arbitrary prioritisation of customers and alleged imposition of higher prices for accessories. It found that these complaints bore the character of an inter se dispute between the parties and did not, on the material before it, demonstrate market-wide anti-competitive effects. Long waiting periods were held to be explicable by factors such as supply constraints (for example, semiconductor shortages) and therefore not ordinarily a matter for antitrust intervention absent material showing of unfair or discriminatory pricing or market-wide harm. The Informant did not adduce evidence to establish that the pricing complained of had the requisite unfairness or discriminatory quality under the Act. On these bases the Commission concluded that no prima facie case of abuse of dominance or AAEC was made out against the Opposite Parties. [Paras 18, 20]No prima facie case of abuse of dominant position or AAEC; matter closed under Section 26(2) of the Act on this ground.Resale price maintenance - appreciable adverse effect on competition - prima facie case - Allegation of resale price maintenance (Section 3(4)) by OPs - HELD THAT: - The Commission noted that to establish an offence under the resale price maintenance prohibition there must be an agreement amongst enterprises or persons at different levels of the production or distribution chain which causes or is likely to cause AAEC in India. The Informant, however, did not produce any evidence showing existence of such an agreement between enterprises or actors in the supply chain. In absence of material demonstrating the required agreement or likely AAEC, the RPM allegation could not be prima facie sustained. [Paras 19, 20]RPM allegation not substantiated; no prima facie case made out under Section 3(4).Prima facie case - closure of inquiry under Section 26(2) of the Competition Act, 2002 - Invocation of investigatory and interim remedies sought by the Informant - HELD THAT: - The Informant sought a direction for investigation by the Director General and interim relief under Section 33 for production of booking and delivery data. Having found no prima facie material to suggest contravention of Sections 3 or 4, the Commission held there was no basis to order an investigation or to grant interim relief. Consequently, the request for investigatory and interim measures was rejected and the information was ordered to be closed. [Paras 20]No case for investigation or interim relief; the matter is closed under Section 26(2).Final Conclusion: The Commission found no prima facie case of contravention of Sections 3 or 4 of the Competition Act on the material before it, held that the complaints amounted to an inter se dispute without market-wide anti-competitive ramifications and that the RPM allegation was unsubstantiated; accordingly the Commission closed the matter under Section 26(2) and declined to direct investigation or grant interim relief.

2024 (7) TMI 321 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB Law of Competition

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Company penalized for bid rigging in soil testing tenders, penalty reduced from 5% to 3% under Section 3(3)(d)
NCLAT Principal Bench upheld Competition Commission's finding that appellant company colluded with other bidders to rig soil testing tenders for UP Agriculture Department in 2017, violating Section 3(1) read with Section 3(3)(d) of Competition Act 2022. Appellant provided cover bids to prevent tender cancellation due to insufficient participation in Meerut and Jhansi divisions. NCLAT confirmed cease-and-desist order but reduced penalty from 5% to 3% of average annual turnover for last three years, considering appellant's supporting role rather than main role in the cartel. Application disposed.

Cartelisation - bid-rigging - cover bidding - cease and desist order - liability of persons in charge under Section 48 of the Competition Act - penalty under Section 27(b) of the Competition Act - relevant turnover principle for penalty computationCartelisation - bid-rigging - cover bidding - Whether M/s Toyfort participated in concerted anti-competitive conduct in the 2017 soil testing tenders and thereby contravened Section 3(1) read with Sections 3(3)(c) and 3(3)(d) of the Act - HELD THAT: - The Tribunal examined the DG's findings and the statements of key individuals, including the proprietor of M/s Toyfort and the director of Austere Systems. Documentary and testimonial evidence showed that Toyfort had no experience in soil testing, that bids and EMDs were submitted in ways inconsistent with independent competitive participation (e.g., EMDs prepared from accounts of related persons, bid documents of Austere signed/submitted by Toyfort's proprietor), and that Toyfort's bids functioned as cover bids to ensure sufficient participation so the tender would not be cancelled. The Tribunal accepted the Commission's conclusion that Toyfort, together with Austere Systems and Fimo Info Solutions, colluded to rig the 2017 Meerut and Jhansi tenders and that Toyfort's participation was not intended to win but to create a fac ade of competition. [Paras 24, 61, 62, 63, 64]Toyfort was held to have contravened Section 3(1) read with Sections 3(3)(c) and 3(3)(d) of the Act; the Commission's finding of liability is upheld.Liability of persons in charge under Section 48 of the Competition Act - Whether the proprietor of M/s Toyfort is liable as a person in charge under Section 48 of the Act - HELD THAT: - The Commission identified individuals responsible under Section 48 and assessed their conduct. The proprietor of Toyfort admitted lack of soil-testing experience, could not explain why bids/EMDs were submitted on behalf of related entities, and gave evasive or inconsistent answers regarding shareholding and submission of rival bids. The Tribunal accepted the Commission's finding that the proprietor played an active role in manipulating the bid process and that the evidence was not credibly rebutted. [Paras 20, 21, 26, 27, 29]The proprietor of M/s Toyfort is liable as a person in charge under Section 48 of the Act; the Commission's identification of the individual is upheld.Penalty under Section 27(b) of the Competition Act - relevant turnover principle for penalty computation - Whether penalty should be computed on 'relevant turnover' limited to turnover from the tendered activity or on overall turnover, and the quantum of penalty to be imposed on Toyfort - HELD THAT: - The Tribunal considered the parties' reliance on the Excel Crop Care decision concerning calculation of relevant turnover where segment-wise turnover could be ascertained. It found that the present case involves first-time bidders with nil or negligible turnover from soil-testing activity; applying a narrow 'relevant turnover' approach would produce nil penalties and defeat the deterrent object of Section 27(b). Given Toyfort's supporting/cover role, the Tribunal held that total turnover may be used for computation in such factual matrices but that the penalty should reflect the lesser role of the appellant. Balancing deterrence and proportionality, the Tribunal reduced the penalty imposed by the Commission from 5% to 3% of the average annual turnover for the last three years. [Paras 34, 35, 68, 69, 70]The Tribunal upheld the Commission's approach to avoid a narrow 'relevant turnover' calculation in these facts and reduced the penalty on Toyfort to 3% of average annual turnover for the last three years (instead of 5% imposed by the Commission).Cease and desist order - Whether the Commission's directive to cease and desist from the anti-competitive practices should be upheld - HELD THAT: - Having affirmed that Toyfort engaged in cartelisation and bid-rigging and that the proprietor was liable under Section 48, the Tribunal found no error in the Commission issuing directions under Section 27(a) requiring the parties and identified individuals to cease and desist from the contravening practices. [Paras 29, 30, 64]The Commission's cease-and-desist directions against Toyfort and the identified individuals are upheld.Final Conclusion: The Tribunal upholds the Commission's findings that M/s Toyfort engaged in cartelisation and bid-rigging (cover bidding) in the 2017 Meerut and Jhansi soil-testing tenders and that the proprietor is liable under Section 48; the Commission's cease-and-desist directions are affirmed. The penalty originally fixed at 5% of average turnover is reduced to 3% of average annual turnover for the last three years in light of Toyfort's supporting role.

2024 (11) TMI 940 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Google cleared of abuse allegations after failing to prove preferential treatment to Truecaller under Section 4
CCI dismissed allegations against Google for abuse of dominant position under Section 4 of Competition Act, 2002. Informant alleged Google granted exclusive access to Truecaller for sharing private contact information while prohibiting other apps. CCI found users voluntarily provided contact details to Truecaller and informant failed to establish prima facie case showing Google accorded preferential treatment or engaged in discriminatory practices. No evidence demonstrated Google allowed Truecaller exclusive access while denying competing applications. Information ordered closed under Section 26(2) and relief under Section 33 rejected.

Abuse of dominance - Relevant market: app store for Android smart mobile OS in India - Dominance of Google in the Android app store market - Preferential treatment / discriminatory conduct - Access to Android APIs - Unauthorised disclosure of non-public contacts - Section 4(2)(b) of the Competition Act, 2002 - Section 26(2) closure of information - Interim relief under Section 33Relevant market: app store for Android smart mobile OS in India - Dominance of Google in the Android app store market - Prima facie delineation of the relevant market and assessment of Google's dominance - HELD THAT: - The Commission, relying on its prior examination in earlier Google matters, is of the prima facie view that the relevant market for the present Information is the market for app stores for Android smart mobile OS in India and that Google is dominant in that market. No material on record warranted departing from the approach adopted in the cited earlier orders, and therefore the same market-definition and prima facie finding of dominance were applied for the present matter. [Paras 13]For the purposes of prima facie assessment, the relevant market is the Android app store market in India and Google is prima facie dominant therein.Preferential treatment / discriminatory conduct - Unauthorised disclosure of non-public contacts - Access to Android APIs - Whether the Informant prima facie established that Google accorded preferential access to Truecaller or engaged in discriminatory practices by allowing Truecaller to publish non public contacts or by granting exclusive API access - HELD THAT: - The Commission examined the Informant's allegations and rival submissions. The Informant relied in part on a version of Truecaller not available on the Play Store and did not substantiate that the Play Store app violated Google policies. Google demonstrated that Android APIs are open source and available to all developers and that Play Store policies apply uniformly. The presence of other caller ID and spam protection apps on the Play Store performing similar functions undermines the claim of exclusive allowance to Truecaller. The Informant's experiment indicated that users voluntarily provided contact data to Truecaller, and no material was produced to show privileged API access or that Google permitted unauthorised publishing by Truecaller in contravention of its Play Store policies. In the absence of evidence, the allegation of preferential treatment or discriminatory denial of access to competing apps was unsubstantiated. [Paras 14, 15, 19, 20]The Informant failed to prima facie establish that Google accorded preferential access to Truecaller, engaged in discriminatory conduct, or permitted unauthorised disclosure of non-public contacts by granting exclusive API access.Commercial relationship and exclusivity - Preferential treatment / discriminatory conduct - Whether commercial arrangements between Google and Truecaller amount to evidence of preferential treatment or exclusivity - HELD THAT: - Google stated that its commercial arrangements with Truecaller for cloud and ad services contain no exclusivity or contingencies concerning sharing of non public contacts. The Commission noted that, absent evidence to the contrary, a mere commercial relationship does not ipso facto establish favourable or preferential treatment outside the scope of those arrangements. [Paras 16]No prima facie case that commercial relationships between Google and Truecaller amount to preferential treatment or exclusivity was established.Policy changes and historical access - Preferential treatment / discriminatory conduct - Whether any past policy change regarding harvesting of data conferred a competitive advantage on Truecaller - HELD THAT: - The Informant alleged that a policy change enabled Truecaller to harvest data before a ban. Google explained the May 2021 policy change introduced enhanced disclosure requirements but did not constitute a ban on authorized collection of user phone book data. The Informant did not place material showing that the policy change conferred a competitive advantage on Truecaller over rivals. [Paras 17]No prima facie finding that the policy change granted Truecaller a competitive advantage was established.Section 26(2) closure of information - Interim relief under Section 33 - Whether a prima facie case under Section 4 was made out and whether interim relief should be granted - HELD THAT: - Having considered the Information, the Informant's rejoinder, Google's responses and the material on record, the Commission concluded that the Informant did not prima facie establish contravention of Section 4. In view of the closure of the Information under Section 26(2), there was no basis for grant of interim relief under Section 33. The Commission therefore ordered closure of the Information and rejected the request for interim suspension of Truecaller's Play Store operations. [Paras 21]The Information is closed under Section 26(2) for want of a prima facie case under Section 4; the request for interim relief under Section 33 is rejected.Final Conclusion: The Commission, after considering the pleadings and materials, proceeded on the prima facie view that the relevant market is the Android app store market in India and that Google is dominant, but found the Informant's allegations of preferential treatment, exclusive API access, unauthorised disclosure, and competitive advantage to be unsubstantiated on the record; accordingly the Information is closed under Section 26(2) and the application for interim relief under Section 33 is rejected.

2024 (11) TMI 939 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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CCI dismisses cartelization allegations against 5 parties for spreading false market rumors under Section 3
CCI dismissed allegations against 5 parties for spreading false market rumors about price changes through rate cards. The Commission found no prima facie case for joint/collective dominance under Section 4, noting the Act doesn't provide for such inquiries. Regarding Section 3 violations, evidence including FIR and newspaper articles failed to establish cartelization. CCI concluded that alleged false rumors weren't result of or leading to cartelization given multiple market participants and daily price negotiations. Information closed under Section 26(2) with relief under Section 33 rejected.

Cartelisation under Section 3 of the Competition Act, 2002 - abuse of dominant position under Section 4 of the Competition Act, 2002 - joint or collective dominance - prima facie case - closure under Section 26(2) of the Competition Act, 2002 - interim relief under Section 33 of the Competition Act, 2002Abuse of dominant position under Section 4 of the Competition Act, 2002 - joint or collective dominance - Allegation of abuse of dominant position by the Opposite Parties as a collective entity is unsustainable because the Act does not provide for inquiry into joint/collective dominance. - HELD THAT: - The Commission observed that the Informant attacked the collective conduct of five Opposite Parties on the premise that they would together acquire and abuse a dominant position. The Commission noted the settled position that the Act does not contemplate an inquiry into joint or collective dominance, and therefore the material did not make out a case under the law relating to abuse of dominance. Having regard to that legal principle and the material on record, the Commission concluded that no contravention under the provisions concerning abuse of dominance is made out against the Opposite Parties collectively. [Paras 12]No case of contravention under the provisions relating to abuse of dominant position is made out; allegations of joint/collective dominance rejected.Cartelisation under Section 3 of the Competition Act, 2002 - prima facie case - interim relief under Section 33 of the Competition Act, 2002 - Allegation of cartelisation by dissemination of false price information does not disclose a prima facie case under the provisions prohibiting anti-competitive agreements. - HELD THAT: - The Commission examined the evidence relied upon by the Informant, including the FIR and newspaper articles, and found that the material did not prima facie establish cartelisation by the Opposite Parties. The Commission recorded that the market comprises multiple buyers and sellers and that prices are determined through day-to-day negotiation, and therefore the mere dissemination of alleged rumours or rate-cards did not demonstrate an agreement or concerted practice amounting to cartelisation. On that basis the Commission held there was no prima facie case to proceed under the provisions proscribing anti-competitive agreements, and consequently no basis for the interim remedy sought under the statute. [Paras 13]No prima facie case of cartelisation under the provisions prohibiting anti-competitive agreements; interim relief sought under Section 33 rejected.Closure under Section 26(2) of the Competition Act, 2002 - Disposition of the Information by closure under the statutory provision for lack of a prima facie case. - HELD THAT: - Having concluded that neither an abuse of dominance (collectively) nor cartelisation was prima facie made out on the material, the Commission exercised its power to close the Information under the statutory provision for termination of proceedings where no case exists. The Commission therefore directed closure of the Information and rejected the prayer for interim relief. [Paras 14]Information closed under the statutory provision for lack of a prima facie case; prayer for interim relief rejected.Final Conclusion: The Commission found no prima facie infringement of the provisions relating to anti-competitive agreements or abuse of dominance on the material before it, declined to grant interim relief, and closed the Information under the relevant statutory provision.

2024 (6) TMI 136 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI Law of Competition

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Companies penalized for bid-rigging in soil testing tenders under Competition Act Sections 3(3)(c) and 3(3)(d)
The NCLAT upheld the Competition Commission's finding that companies engaged in bid-rigging and cartelisation in soil testing tenders floated by UP Agriculture Department during 2017-18. Three entities colluded to manipulate the bidding process through geographical allocation and cover bidding arrangements, contravening Sections 3(3)(c) and 3(3)(d) read with Section 3(1) of Competition Act, 2002. The NCLAT confirmed the cease-and-desist order but reduced the penalty from 5% to 3% of average annual turnover for the appellant who played a supporting role by providing cover bids.

Bid-rigging - collusive bidding - cover bidding - cartelisation - cease and desist order - penalty under Section 27(b) of the Act - liability of persons in charge under Section 48 of the Act - relevant turnover vs total turnover for penalty computation - geographical allocation of tendersBid-rigging - collusive bidding - cartelisation - geographical allocation of tenders - Delicacy Continental Pvt. Ltd. engaged in bid-rigging/cover bidding and cartelisation in the 2017-2018 soil testing tenders and thereby contravened Sections 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. - HELD THAT: - The Tribunal accepted the material findings of the DG and the Commission that only three bidders participated in the 2018 Meerut and Saharanpur tenders and that Delicacy acted as a cover bidder under the control and supervision of Austere Systems. Admissions by the directors of Delicacy and Austere, the setting up of labs without independent control, fabricated/after-the-fact MOUs, issuance of experience certificates by Austere to Delicacy to make it eligible, and evidence of bid prices being decided in consultation with Austere cumulatively establish concerted conduct to manipulate the tender process. The Commission's grouping of parties and findings that Austere and Yash Solutions had geographically allocated tenders and submitted supporting bids were endorsed. In view of this body of direct and circumstantial evidence, the Tribunal held there was sufficient meeting of minds and concerted action to constitute bid-rigging and cartelisation under the cited provisions. [Paras 36, 78]The finding of contravention of Sections 3(3)(c) and 3(3)(d) read with Section 3(1) against Delicacy Continental is upheld and the cease-and-desist direction is sustained.Liability of persons in charge under Section 48 of the Act - The individuals identified by the DG (including Mr. Ankur Kumar for Delicacy Continental) are liable under Section 48 for having been in charge of and responsible for the conduct of the enterprises found to have contravened Section 3. - HELD THAT: - The Commission analysed statements and documentary evidence and found that the named individuals had active roles, knowledge of and participation in the anti competitive conduct or failed to credibly rebut the evidence. Specific findings include Delicacy's director admitting the company's passive/controlled role, fabrication of MOUs, involvement in deciding bids through employees in consultation with Austere, and inability to explain material discrepancies; consequently the Commission concluded these persons fall within the statutory liability under Section 48(1) and 48(2). The Tribunal endorsed the Commission's assessment that the identified persons have not credibly refuted the DG's evidence and are thus liable. [Paras 30, 33, 34]The Commission's identification and holding of the persons named in the DG report as liable under Section 48 are upheld.Penalty under Section 27(b) of the Act - relevant turnover vs total turnover for penalty computation - Quantum of penalty: the Commission's imposition of monetary penalty is sustainable in principle, but the Tribunal reduces the penalty imposed on Delicacy Continental from 5% to 3% of the average annual turnover for the relevant three-year period. - HELD THAT: - The Tribunal reviewed the debate over 'relevant turnover' as discussed in Excel Crop Care and the Commission's contrary approach. It recognized that Excel Crop Care mandates consideration of relevant turnover where it can be segregated, but observed that in the present case many bidders were first time entrants with nil or no segregable turnover from the soil testing business; applying a narrow relevant turnover approach here would risk a nil penalty and frustrate deterrence. Having accepted the Commission's rationale for using overall turnover to compute penalty in these peculiar facts, the Tribunal nevertheless exercised proportionality by reducing the Commission's 5% penalty to 3% for Delicacy given its supporting/cover role rather than the principal role in the cartel. The Tribunal also affirmed that the Commission considered aggravating and mitigating factors when fixing penalties. [Paras 39, 41, 42, 83, 84]Penalty calculation methodology as applied by the Commission is accepted in principle for these facts, but the penalty on Delicacy Continental is reduced to 3% of average annual turnover for the last three years instead of 5%.Final Conclusion: The Tribunal affirms the Commission's findings that Delicacy Continental participated in bid rigging/cover bidding and cartelisation in the UP soil testing tenders and upholds the cease and desist direction and the identification of persons liable under Section 48; the monetary penalty is proportionately reduced and Delicacy Continental's penalty is set at 3% of average annual turnover for the prescribed three year period.

2024 (11) TMI 1001 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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DAE exempted from Competition Act definition while IREL cleared of dominant position abuse under Section 26(2)
CCI closed the case under Section 26(2) of the Competition Act, 2002, finding no prima facie case of abuse of dominant position against DAE and IREL. The Commission held that DAE is exempted from the definition of "enterprise" under Section 2(h) read with Allocation of Business Rules, placing it outside the Act's purview. IREL was found to have no role in renewal of off-take agreements, rejection of import licenses, or non-approval of alternate disposal plans. No relief under Section 33 was warranted.

Enterprise - abuse of dominant position under Section 4 of the Competition Act - sovereign functions exclusion - Allocation of Business Rules - scope of Department of Atomic Energy - closure under Section 26(2) of the ActEnterprise - sovereign functions exclusion - Allocation of Business Rules - Whether the Department of Atomic Energy (DAE) is an 'enterprise' within the meaning of Section 2(h) of the Competition Act in respect of activities relating to atomic energy. - HELD THAT: - The Commission examined Section 2(h) of the Act together with the Government of India (Allocation of Business) Rules, 1961, which vests administration and control of matters relating to atomic energy, including control of radioactive substances and supervision of undertakings such as IREL, within the DAE. Pursuant to the express exclusion in Section 2(h) for government activities relatable to sovereign functions, and in view of the Allocation Rules conferring atomic energy matters to DAE (including administration of the Atomic Energy Act, regulation of possession, use, disposal and transport of radioactive substances and supervision of State undertakings concerned with prescribed substances), the Commission concluded that the activities complained of fall within the sovereign-function exclusion. Consequently, DAE does not qualify as an 'enterprise' for the purposes of the Act in respect of those atomic-energy functions and its conduct cannot be examined under the Competition Act. [Paras 31, 32, 33]DAE is not an 'enterprise' in respect of the atomic-energy activities complained of and is therefore outside the purview of the Competition Act for those activities.Abuse of dominant position under Section 4 of the Competition Act - closure under Section 26(2) - Whether a prima facie case of abuse of dominant position is made out against DAE and IREL warranting an investigation under Section 26(1) and interim relief under Section 33. - HELD THAT: - The Commission noted that the core grievances-non-renewal of the off-take agreement, refusal of import licences and non-approval of an alternate disposal plan-relate squarely to actions of DAE, and that off-take agreements were entered into or discontinued on DAE's directions. Given the finding that DAE's challenged activities fall within the sovereign-function exclusion, the Commission found that IREL had no independent role in the matters of renewal of off-take agreements, issuance of import licences or approval of alternate disposal plans. Applying these conclusions to the allegations of discriminatory conduct and market foreclosure under Section 4, the Commission held that no prima facie case was established against either DAE or IREL. On that basis, the Commission determined that there was no ground to proceed to investigation or to grant interim relief. [Paras 28, 30, 34, 35]No prima facie case of abuse of dominant position is made out against DAE or IREL; the Information is closed under Section 26(2) and no interim relief is warranted.Final Conclusion: The Commission held that the Department of Atomic Energy's activities complained of are excluded from the definition of 'enterprise' by reason of sovereign functions and the Allocation of Business Rules; accordingly no prima facie case of abuse of dominant position was made out against DAE or IREL, and the matter is closed under Section 26(2) of the Act with no interim relief granted.

2024 (11) TMI 938 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues: Alleged contravention of provisions of the Competition Act, 2002 by CSB Bank and its officials; fraudulent conduct leading to recovery proceedings against the property of the Informant; request for inquiry, compensation, and relief by the Informant; interim relief sought to stop recovery action by CSB Bank.

Analysis:
The case involves an Information filed by the Informant against CSB Bank and its officials under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of the Act. The Informant claimed that Mr. Mathew induced him to execute sale deeds of his property without consideration, which were then used to secure loans from Bank of India and Union Bank of India. Subsequently, Mr. Mathew allegedly settled those loans and obtained a new loan from CSB Bank against the Informant's property without his knowledge. The Informant discovered this fraud in 2020 when a possession notice was issued by CSB Bank for recovery of a substantial amount borrowed by Mr. Mathew. The Informant, who had been paying taxes and had a tenant in the property, sought relief through legal proceedings in various forums.

The Informant alleged that CSB Bank officials colluded with Mr. Mathew to initiate recovery proceedings against his property, compelling him to sign a 'Private Treaty' and pay a portion of the consideration to prevent losing his property. Additionally, it was claimed that Mr. Mathew sold a portion of his own property, pledged under the same loan account with CSB Bank. The Informant requested the Competition Commission to conduct an inquiry into the conduct of CSB Bank, provide compensation, relieve liability over the property, and grant interim relief to halt the recovery action by CSB Bank until the matter is investigated.

The Commission, after considering the Information and relevant material, noted the alleged fraudulent conduct where the Informant's property was mortgaged without his knowledge, leading to recovery proceedings by CSB Bank. However, the Commission found that the facts and circumstances of the case did not involve any competition issue under the Act. As a result, the Commission concluded that no prima facie case of contravention of the Act was established against the Opposite Parties (OPs). Consequently, the Information was ordered to be closed under Section 26(2) of the Act, and the request for relief under Section 33 was rejected. The Secretary was directed to communicate this decision to the Informant.

In summary, while the Informant's grievances regarding the alleged fraudulent conduct and collusion between Mr. Mathew and CSB Bank officials were acknowledged, the Competition Commission found that the case did not fall within the purview of competition law and, therefore, no contravention of the Act was established against the OPs.

Competition Commission Dismisses Allegations Against Bank Due to Lack of Competition Issues.
The Competition Commission concluded that the allegations against CSB Bank and its officials did not constitute a contravention of the Competition Act, 2002, as the case lacked any competition-related issues. Consequently, the Commission ordered the closure of the Information under Section 26(2) of the Act and rejected the Informant's request for interim relief under Section 33. The Secretary was instructed to communicate this decision to the Informant, acknowledging the grievances but determining them outside the scope of the Act.

2024 (11) TMI 1000 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues:
Alleged contravention of Section 4 of the Competition Act, 2002 by Maruti Suzuki India Limited regarding pricing strategy for the 'Jimny' SUV, abuse of dominant position, refusal to refund excess charged amount, and request for interim relief to stop selling 'Jimny' cars.

Analysis:
The Informant filed a complaint against Maruti Suzuki India Limited (OP) under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Section 4. The Informant, a customer of OP, booked 2 'Jimny' SUVs and raised concerns about the booking process, pricing, and delivery timelines. The OP allegedly created artificial hype, leading to high bookings without disclosing prices and delivery dates, causing customers to purchase without proper consideration.

The Informant claimed that OP later launched the 'Jimny' at a higher price than expected, with dealers pressuring customers to buy additional accessories and services. Subsequently, OP discounted the price of the base 'Jimny' model, causing a significant depreciation in value within a short period. The Informant communicated with OP regarding these issues, including a demand for a refund, which OP refused.

The Informant alleged that OP's pricing strategy and conduct amounted to an abuse of dominant position and unfair trade practice, benefiting OP at the expense of customers. The Informant sought a penalty against OP and a refund for the excess charged amount. Additionally, the Informant requested interim relief to halt the sale of 'Jimny' cars until the inquiry was completed.

The Competition Commission of India analyzed the allegations, focusing on the introduction of the 'Thunder' model, pricing discrepancies, and OP's market dominance. The Commission assessed OP's market share in the passenger vehicle segment, particularly in the SUV category, comparing sales figures with competitors. Despite OP's significant market share, the Commission determined that OP did not hold a dominant position in the SUV segment, ruling out a violation of Section 4.

Furthermore, the Commission viewed the Informant's grievance as a contractual dispute over pricing, without raising significant competition concerns. The Commission concluded that there was no prima facie case of contravention of Section 4 against OP. Consequently, the matter was closed under Section 26(2) of the Act, and the Secretary was directed to inform the Informant accordingly.

CCI clears automotive manufacturer of dominant position abuse allegations in SUV pricing dispute under Section 4
CCI dismissed allegations against automotive manufacturer for abuse of dominant position in SUV pricing. Commission found the company lacked sufficient market share in SUV segment to operate independently of competitive forces or affect competitors/consumers. The dispute was deemed inter-se commercial disagreement regarding product pricing rather than competition concern. Commission ruled buyers cannot demand retroactive discounts on purchased products, and alleged pricing was not predatory. No prima facie case established under Section 4 of Competition Act, 2002. Matter closed under Section 26(2).

Abuse of dominant position - Relevant market and dominance assessment - Market definition for product/substitute markets (SUV segment) - Prima facie case under Section 4 of the Competition Act, 2002 - Inter se contractual/consumer grievance vis a vis competition issue - Closure of information under Section 26(2) of the Competition Act, 2002Relevant market and dominance assessment - Market definition for product/substitute markets (SUV segment) - Whether the OP was in a dominant position in the relevant market for the purpose of Section 4 of the Act. - HELD THAT: - The Commission examined publicly available passenger vehicle and SUV sales data for 2022-2023 and considered the need to delineate the relevant market in which the OP operates. Using reported SUV sales figures, the OP's market share in the SUV segment was approximately 22% in 2022 and 21.5% in 2023. Having regard to these market shares and the competitive composition of the SUV segment, the Commission concluded that the OP did not possess a market position large enough to enable it to operate independently of competitive forces or to affect competitors or consumers in its favour. Accordingly, the OP was not found to be dominant in the relevant market for the purposes of Section 4. [Paras 17, 18]The OP is not dominant in the relevant market (SUV segment).Abuse of dominant position - Prima facie case under Section 4 of the Competition Act, 2002 - Whether the OP's pricing, launch of a limited edition 'Thunder' model and related conduct constituted an abuse of dominance under Section 4. - HELD THAT: - The Commission considered the Informant's allegations that the OP generated artificial hype, took bookings without price transparency, and subsequently offered a discounted limited edition model that devalued earlier purchases. Having found that the OP was not dominant in the relevant market, the foundational element for establishing an abuse under Section 4 was absent. Further, the Commission observed that the facts alleged amounted to a buyer's disappointment with a subsequent price reduction and promotional offers, which do not, on the material before it, amount to predatory pricing or other prohibited conduct under Section 4. Consequently, no prima facie case of abuse of dominance was made out. [Paras 18, 20]No prima facie case of abuse of dominant position under Section 4 is made out against the OP.Inter se contractual/consumer grievance vis a vis competition issue - Closure of information under Section 26(2) of the Competition Act, 2002 - Whether the Informant's grievance about refusal of refund and price disparity raised a competition concern or was an inter se consumer dispute insufficient to sustain an inquiry. - HELD THAT: - The Commission noted that the Informant's core grievance related to an individual contractual/consumer dispute arising from a price paid at purchase and the subsequent availability of a lower priced edition. On the facts and allegations, the complaint was characterised as an inter se dispute between buyer and seller and did not prima facie raise a competition issue. The Commission reiterated that a purchaser cannot demand the benefit of any later discount and that the discounted model did not prima facie indicate predatory or anti competitive conduct warranting further investigation. [Paras 11, 19, 20]The grievance is an inter se consumer/contractual dispute and does not raise a competition concern; the Information is to be closed.Final Conclusion: The Commission found no prima facie contravention of Section 4 of the Competition Act, 2002 by Maruti Suzuki India Limited - having concluded the OP was not dominant in the relevant market and the allegations amounted to a consumer/inter se dispute rather than a competition issue - and accordingly closed the Information under Section 26(2) and directed communication of the closure to the Informant.

2024 (9) TMI 709 - MADRAS HIGH COURT Law of Competition

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Competition Commission procedural violations found but writ petition dismissed despite flawed status change
The Madras HC addressed a challenge to Competition Commission orders dated 01.11.2019 and 26.08.2020 regarding abuse of dominant position. The court held there was no delay in filing writ petitions as the petitioner received copies of orders only proximate to filing, with the 2020 order supplied only on 01.03.2024. The court found the petitioner's status change from participant to opposite party was procedurally flawed, as proper notice wasn't given before impleadment and no speaking order justified the change. Despite finding procedural violations, the petition was dismissed.

Party v. third party distinction in competition proceedings - Procedure for enquiry under Section 26 of the Competition Act, 2002 - Powers of the Director General under Section 41 of the Competition Act, 2002 - Requirement to furnish DG's report and supply copies to parties - Impleadment of parties and requirement of notice before upgradation of status - Illegality of ex parte impleadment without opportunity to be heardDelay and laches in approaching the Court - Whether the writ petitions are barred by delay or laches - HELD THAT: - The Court held that there was no delay in filing the writ petitions. A copy of the first impugned order (01.11.2019) was supplied to the petitioner only on 14.09.2020 and the second impugned order (26.08.2020) was furnished to the petitioner only on 01.03.2024, after which the writ petitions were filed on 07.03.2024. Given that the petitioner was treated and responded as a third party and was not aware of any upgradation of status until receipt of the later order, participation in earlier proceedings did not amount to acquiescence or bar the challenge. The petitions are therefore not time barred. [Paras 17, 18, 19]No laches; the writ petitions are not barred by delay.Party v. third party distinction in competition proceedings - Procedure for enquiry under Section 26 of the Competition Act, 2002 - Powers of the Director General under Section 41 of the Competition Act, 2002 - Impleadment of parties and requirement of notice before upgradation of status - Requirement to furnish DG's report and supply copies to parties - Illegality of ex parte impleadment without opportunity to be heard - Validity of upgradation of the petitioner's status from a third party/participant to an opposite/contesting party without notice, without furnishing the DG's note/report and without a speaking satisfaction by the Commission - HELD THAT: - The Court examined the statutory scheme, distinguishing the role and consequences attaching to a 'party' and to a 'third party'. Sections 26 and 41 read together show (a) the DG's powers to investigate and to produce reports, (b) a statutory duty to furnish the DG's report to the parties under Section 26(4), and (c) separate provisions enabling the DG to require information from third parties under Section 41(4). The escalation of status from third party to contesting party is consequential because orders under Section 27 can impose severe liabilities. The records show the petitioner was treated and participated as a third party, the DG's Note dated 17.08.2020 and the DG's report under Section 26(3) were not supplied to the petitioner, and the Commission's order dated 26.08.2020 impleading several manufacturers (including the petitioner) was passed ex parte on the basis of the DG's Note. Given the absence of notice to the petitioner, the failure to furnish the DG's report required to be supplied to 'parties', and the lack of a speaking satisfaction justifying impleadment, the upgradation was ordered without the requisite opportunity and transparency. The Court concluded that a person whose status is to be elevated to that of a contesting/opposite party must be given notice and the opportunity to be heard, and the authority must record reasons for such impleadment. [Paras 42, 43, 44, 45, 46]Upgradation of the petitioner from third party to opposite/contesting party by order dated 26.08.2020 (and the subsequent notice dated 02.02.2024) is invalid for want of notice, non furnishing of the DG's report/Note and absence of a speaking satisfaction; order dated 26.08.2020 and notice dated 02.02.2024 are quashed.Final Conclusion: The Court dismissed the challenge to the original reference order dated 01.11.2019 but allowed the petitions impugning the ex parte upgradation of the petitioner's status: order dated 26.08.2020 and notice dated 02.02.2024 are quashed; respondents are at liberty to proceed thereafter in accordance with law, ensuring notice, supply of relevant DG reports and reasoned satisfaction before any impleadment.

2024 (11) TMI 937 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues: (i) Whether the relevant market for examining the impugned conduct was the market for content management software in India and the WordPress-specific plugin directories market in India, and whether the opposite party was dominant therein; (ii) Whether the delisting and banning of the informant's plugins amounted to abuse of dominant position by way of denial of market access, unfair or discriminatory conduct, or self-preferencing; (iii) Whether the information disclosed a prima facie contravention warranting action under Section 26(2) and interim relief under Section 33, and whether confidentiality deserved to be granted over specified material.

Issue (i): Whether the relevant market for examining the impugned conduct was the market for content management software in India and the WordPress-specific plugin directories market in India, and whether the opposite party was dominant therein.

Analysis: The Commission identified two markets as relevant to the grievance. First, it treated content management software in India as the primary market because WordPress provides website-building and content-management functionality comparable to other CMS providers. Second, it treated the WordPress-specific plugin directories market in India as a distinct market because plugins are platform-specific and not readily interchangeable across CMS platforms, while centralized directories offer search, ratings, reviews, and categorisation that direct download sources do not fully replicate. On the available material, the opposite party was found to hold a dominant position in both markets, including by reason of its substantial market share and the scale of the plugin directory.

Conclusion: The relevant markets were identified as the CMS market in India and the WordPress-specific plugin directories market in India, and the opposite party was found to be dominant in those markets.

Issue (ii): Whether the delisting and banning of the informant's plugins amounted to abuse of dominant position by way of denial of market access, unfair or discriminatory conduct, or self-preferencing.

Analysis: The Commission accepted that the plugin directory operated under detailed guidelines applicable to all developers, and that violation of those guidelines could justify removal or banning. It recorded that the informant had repeatedly violated the guidelines despite warnings, and that the resulting action was taken for persistent misconduct rather than for an anticompetitive purpose. The guidelines were found to be directed toward maintaining quality and protecting users and developers, and no discriminatory application was established. The self-preferencing allegation also failed because the informant's plugin and the opposite party's Jetpack plugin were found to differ substantially in scope and function, so no direct competitive basis was shown.

Conclusion: The Commission held that the impugned conduct did not constitute abuse of dominant position, denial of market access, discriminatory treatment, or self-preferencing.

Issue (iii): Whether the information disclosed a prima facie contravention warranting action under Section 26(2) and interim relief under Section 33, and whether confidentiality deserved to be granted over specified material.

Analysis: As no prima facie case of contravention under Section 4 was made out, the information was liable to be closed under Section 26(2), and no basis remained for interim relief under Section 33. On confidentiality, the Commission accepted the request in respect of specified documents and data, subject to the statutory framework and for the stated period.

Conclusion: No prima facie contravention was made out, the request for interim relief failed, and confidentiality was granted for the specified material.

Final Conclusion: The proceedings were closed on the finding that the impugned conduct did not disclose an abuse of dominance, while the ancillary confidentiality request was allowed in part for the protected material.

Ratio Decidendi: Where platform-specific rules are applied uniformly and the impugned action is justified by persistent non-compliance with those rules, removal or banning of a developer's listing does not by itself establish abuse of dominant position absent discrimination, denial of market access, or self-preferencing.

Platform rules and plugin delisting do not establish abuse of dominance where removal follows repeated guideline violations.
The CCI identified the relevant markets as content management software in India and the WordPress-specific plugin directories market in India, and found dominance on the available material in both markets. It held that the delisting and banning of the informant's plugins did not amount to abuse of dominance because the platform applied uniform developer guidelines, the informant had repeatedly violated those rules despite warnings, and the action was justified by persistent non-compliance rather than anticompetitive intent. The self-preferencing allegation also failed because the informant's plugin and Jetpack were found to differ substantially in scope and function. As no prima facie contravention was made out, the matter was closed under Section 26(2), interim relief under Section 33 was refused, and confidentiality was granted for specified material.

Alleged abuse of dominant position under Section 4 of the Competition Act, 2002 - Relevant market delineation: Content Management Software (CMS) and WordPress-specific Plugin Directories in India - Assessment of dominance in the relevant markets - Denial of market access and discriminatory application of platform guidelines - Self-preferencing and deletion of user reviews - Interim reliefs under Section 33 of the Competition Act, 2002 - Confidentiality of filings under Section 57 read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009Relevant market delineation: Content Management Software (CMS) and WordPress-specific Plugin Directories in India - The relevant product and geographic markets for adjudicating the alleged abuse were delineated as the market for provision of Content Management Software (CMS) in India and the WordPress-Specific Plugin Directories Market in India. - HELD THAT: - The Commission identified the primary product market as provision of Content Management Software (CMS), noting that alternatives such as traditional web development agencies or in-house teams are not interchangeable with the CMS market for purposes of the Informant's grievance (para 13). The Commission further identified a separate relevant market for plugin listing services-termed the WordPress-Specific Plugin Directories Market-because plugins are generally tailored to specific CMS architectures and are not readily interoperable across platforms; centralized directories also provide distinct features (categorization, search, reviews) not available when downloading directly from developers (paras 15-16). India was held to be the relevant geographic market for both delineations (paras 13, 16). [Paras 13, 15, 16]The markets for adjudication were defined as the CMS market in India and the WordPress-specific plugin directories market in India.Assessment of dominance in the relevant markets - Whether the Opposite Party (WordPress.org) is dominant in the identified relevant markets. - HELD THAT: - On the CMS market, the Commission observed that multiple competing platforms exist (Wix, Squarespace, Shopify, Joomla, Drupal) but recorded that WordPress holds the largest market share (62.5%) and may be inferred to be dominant (para 14). With respect to the WordPress-specific plugin directories market, the Commission noted that WordPress Plugin Directory hosts a substantially larger number of plugins (around 60,000) compared to other directories, indicating WordPress is a dominant player in that market as well (para 17). [Paras 14, 17]WordPress.org was held to be dominant in the CMS market in India and dominant in the WordPress-specific plugin directories market in India.Denial of market access and discriminatory application of platform guidelines - Self-preferencing and deletion of user reviews - Alleged abuse of dominant position under Section 4 of the Competition Act, 2002 - Interim reliefs under Section 33 of the Competition Act, 2002 - Whether the delisting/banning of the Informant's plugins and related conduct by WordPress.org constituted a prima facie abuse of dominance under Section 4, including denial of market access, discriminatory treatment, or self-preferencing; and whether interim relief was warranted. - HELD THAT: - The Commission examined WordPress.org's Detailed Plugin Guidelines and related disciplinary process, noting that violations (including repeated misconduct by the Informant despite warnings) justified removal of plugins and banning of the developer; these facts, as presented by the OP and not contested by the Informant, indicate enforcement of platform standards rather than discriminatory treatment (para 18-19). The Commission observed that the guidelines do not appear unfair or unreasonable, have been applied to multiple developers (about 35) for repeated violations, and were not applied in a discriminatory manner (para 19). Allegations that the OP's Jetpack plugin caused deletion of 5star reviews or that delisting was undertaken to benefit Jetpack were rejected because Jetpack and the Informant's plugin serve materially different functions and no legitimate basis for a finding of selfpreferencing was established (para 20). In light of these findings, the Commission concluded that no prima facie case of contravention of Section 4 was made out and therefore there was no basis to grant interim relief under Section 33 (para 21). [Paras 18, 19, 20, 21]No prima facie case of abuse of dominant position was established; the Information is closed under Section 26(2) and the request for interim relief under Section 33 is rejected.Confidentiality of filings under Section 57 read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009 - Whether certain documents filed by the Opposite Party should be granted confidential treatment and the duration of such confidentiality. - HELD THAT: - The Opposite Party filed parts of its submissions in confidential and non-confidential versions and applied for confidentiality under Section 57 read with Regulation 35. Having considered the grounds for confidentiality, the Commission granted confidentiality to the specified documents/data/information in terms of Regulation 35, subject to Section 57 of the Act, for a period of three years from the date of this order, while clarifying that material used in the order is not thereby rendered confidential (para 22). [Paras 22]Confidential treatment granted to specified filings for three years, subject to Section 57; materials used in the order are not deemed confidential.Final Conclusion: The Commission delineated the CMS market and the WordPress-specific plugin directories market in India, held WordPress.org to be dominant in both markets, found no prima facie abuse of dominance by WordPress.org (delisting and related conduct were attributable to guideline violations and not discriminatory self-preferencing), closed the Information under Section 26(2) of the Act, rejected the request for interim relief under Section 33, and granted limited confidentiality to certain OP filings for three years subject to statutory conditions.

2024 (5) TMI 1 - DELHI HIGH COURT Law of Competition

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Mandatory demand notice procedure bars automatic interest on delayed penalty recovery under competition law
Interest on delayed payment of a Competition Commission penalty could not be levied unless the prescribed demand notice in Form I was issued and served in accordance with the recovery regulations. The Court treated the notice procedure as mandatory, because the regulations make the demand notice the basis for identifying default and for triggering interest liability. A penalty order by itself did not create automatic liability for interest; the statutory recovery method had to be followed strictly. The impugned direction levying interest was therefore invalid and the demand for interest was set aside.

Issuance of demand notice in Form I - Interest on penalty payable under Regulation 5 - Mandatory nature of procedural requirements for recovery - Deemed default and recovery proceedings dependent on service of noticeIssuance of demand notice in Form I - Interest on penalty payable under Regulation 5 - Mandatory nature of procedural requirements for recovery - Whether the Competition Commission of India could levy interest on the penalty from 10.12.2018 without first issuing the demand notice in Form I and following the procedure prescribed by the 2011 Regulations - HELD THAT: - The Court examined Regulations 3 and 5 of the Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011 and Form I appended thereto, and concluded that the scheme mandates that a person on whom a penalty is imposed must be informed by service of a demand notice in Form I specifying the amount due and the period within which it is payable. Regulation 3(2) provides thirty days from service of the demand notice for payment, and Regulation 5 makes interest leviable only if the amount specified in the demand notice is not paid within the period specified. Form I expressly warns that failure to deposit within the stipulated period will attract simple interest at the rate specified in Regulation 5. The specific insertion of the interest clause in Form I and the language of Regulations 3 and 5 indicate that issuance of the demand notice and the time specified therein are pre conditions to the liability to pay interest. The Court relied on authorities holding that liability to pay penal interest arises only upon failure to comply with a notice of demand (see Mohan Wahi and State of Kerala v. Joy Varghese ) and on the principle that when power to act is coupled with a prescribed mode, that mode is mandatory. Applying these principles, the Court held that interest cannot be levied from 10.12.2018 unless the demand notice in Form I had been served and the timelines in the Regulations observed. [Paras 14, 15, 16, 22, 23]Interest on the delayed payment of penalty could not be levied from 10.12.2018 in the absence of issuance of the demand notice in Form I and compliance with the procedure prescribed by the 2011 Regulations; the impugned order levying such interest is set aside.Final Conclusion: Writ petition allowed: the order directing payment of interest from 10.12.2018 until payment is set aside for non compliance with the mandatory demand notice procedure under the 2011 Regulations.

2024 (11) TMI 936 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Competition Case Dismissed: No Evidence of Anti-Competitive Agreement Found Under Competition Act, 2002.
The Commission concluded that no anti-competitive agreement existed among the Opposite Parties, leading to the closure of the matter under Section 26(2) of the Competition Act, 2002. The evidence provided by the Informant failed to establish contravention of Section 3(4) read with Section 3(1) of the Act, as commercial considerations primarily influenced purchase decisions. Consequently, the reliefs sought under Section 33, including compensation and permission for promotional activities, were not granted. The Secretary was instructed to communicate this decision to the Informant, effectively concluding the case.

Contravention of Section 3(4) read with Section 3(1) of the Competition Act, 2002 - existence of an agreement between vertically related players - appreciable adverse effect on competition - anti-competitive conduct - commercial considerations governing purchase and saleContravention of Section 3(4) read with Section 3(1) of the Competition Act, 2002 - existence of an agreement between vertically related players - appreciable adverse effect on competition - anti-competitive conduct - commercial considerations governing purchase and sale - Whether the Information discloses an agreement or anti-competitive conduct attracting liability under Section 3(4) read with Section 3(1) of the Act - HELD THAT: - The Commission examined the material filed by the Informant, including emails sent to various entities, and found that the communications were solicitations for business and did not disclose any agreement or arrangement of the kind envisaged by Section 3(4). Section 3(4) requires the existence of an agreement between vertically related players that has caused or is likely to cause an appreciable adverse effect on competition. In the absence of any material demonstrating such an agreement or other discernible anti-competitive conduct, the Commission observed that decisions by market players to purchase or sell a product are driven by commercial considerations. The Commission therefore concluded that intervention is not warranted where anti-competitive behaviour is not discernible from the material on record, and no contravention of Section 3(4) read with Section 3(1) has been shown. [Paras 8, 9, 10]No agreement or anti-competitive conduct established; matter closed under Section 26(2) of the Act and no relief under Section 33 arises.Final Conclusion: The Commission closed the Information under Section 26(2) of the Competition Act, 2002, holding that the material does not demonstrate an agreement between vertically related parties or other anti-competitive conduct attracting liability under Section 3(4) read with Section 3(1); consequential reliefs sought were not granted.

2024 (11) TMI 935 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues:
Alleged contravention of provisions of Section 3 and 4 of the Competition Act, 2002 by National Accreditation Board for Testing and Calibration Laboratories (NABL).

Detailed Analysis:

Issue 1: Alleged Violation of Section 4(2)(c) of the Act
The Informant, an association of Indian laboratories, filed an Information alleging that NABL, the accreditation body, violated Section 4(2)(c) of the Act by issuing a circular directing accredited CABs to align with specific forms of entities by a certain deadline. The Informant argued that this directive was discriminatory, favored larger players, and disadvantaged small entrepreneurs. The Informant highlighted challenges faced by small labs in transitioning to new forms of entities, such as lease cancellations, loan transfer issues, heavy GST implications, and the loss of goodwill. The Informant contended that such a move would lead to the closure of several CAB businesses. The Commission noted the Informant's concerns but referred to a previous case where a similar circular was upheld, stating that the structure mandated by NABL was essential for seeking accreditation services and aligning with ISO standards. The Commission found no reason to intervene with the circular, as it did not appear to be abusive or anti-competitive.

Issue 2: Alleged Violation of Section 3 of the Act
The Informant also alleged a violation of Section 3 of the Act by NABL, claiming that the requirement for enterprises to register under the Companies Act, 2013, as part of accreditation compliance, favored larger players and posed challenges for micro and small enterprises. However, the Informant did not provide specific agreements or documents suggesting the existence of anti-competitive agreements. The Commission, after reviewing the facts and circumstances, concluded that no case was made out against NABL under either Section 3 or 4 of the Act. Consequently, the Information was directed to be closed under Section 26(2) of the Act, and no relief under Section 33 of the Act was granted.

In conclusion, the Commission found no merit in the allegations of anti-competitive conduct by NABL and closed the case, stating that the impugned circular did not raise competition concerns and was essential for maintaining accreditation standards. The Commission emphasized the importance of aligning with ISO requirements and upheld NABL's directive as necessary for ensuring trust, accountability, and compliance in the accreditation process.

NABL cleared of competition violations for requiring laboratories to change from proprietorship structure
CCI dismissed allegations against NABL regarding a circular requiring accredited laboratories to transition from proprietorship to other business forms by December 2023. The Commission found no violation of Competition Act Sections 3 or 4, noting the circular merely established structural requirements for accreditation services. No anti-competitive agreement was demonstrated, and the matter was previously examined in Case No. 12 of 2023 with similar findings. The information was closed under Section 26(2) with no relief granted under Section 33.

Abuse of dominant position - anti-competitive agreement - impartiality and non-discrimination in accreditation - accreditation condition as a non abusive eligibility requirement - closure of information under Section 26(2) on prima facie viewAbuse of dominant position - accreditation condition as a non abusive eligibility requirement - impartiality and non-discrimination in accreditation - Whether the circular issued by NABL directing sole proprietor CABs to change their legal form is abusive of a dominant position under the Act - HELD THAT: - The Commission examined the impugned circular in light of the ISO/IEC 17025:2017 requirements and its earlier findings in Prem Prakash (Case No. 12 of 2023). It observed that the circular prescribes the corporate form that a CAB must adopt if it wishes to obtain accreditation and that ISO 17025:2017 (as adopted by BIS) contains requirements regarding the structure of a CAB. The Commission noted that accreditation involves an underlying trust element and that NABL's guidance linking enterprise form to operational reliability and liability separation (e.g., OPC, LLP, company, society/trust) is aimed at reinforcing confidence and compliance. The Commission further recorded that the fact the circular may impose additional expenses or formalities on CABs does not, by itself, make the requirement abusive. Having considered the prior reasoning upholding the circular and the material on record, the Commission found no reason to re examine the circular from a competition perspective and concluded that, prima facie, there was no case of abusive dominance made out against NABL. [Paras 14, 15, 17]No prima facie case of abuse of dominant position; matter closed under Section 26(2).Anti-competitive agreement - Whether there exists an anti competitive agreement attributable to NABL in respect of the impugned directions - HELD THAT: - The Informant did not point to any particular agreement or produce documents suggesting the existence of an anti competitive agreement. In the absence of any material indicating concerted action or an agreement restricting competition, the Commission found no basis to proceed under the prohibition on anti competitive agreements. [Paras 16, 17]No prima facie case of an anti competitive agreement; information closed under Section 26(2).Final Conclusion: The Information filed by AOIL is closed under Section 26(2) of the Act as no prima facie case is made out against NABL under either the prohibition on anti competitive agreements or the prohibition on abuse of dominance; no interim relief is warranted.

2024 (11) TMI 934 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Housing society changes staff allocation and maintenance charges without establishing market dominance under Section 4
The CCI examined allegations of abuse of dominant position under Sections 3 and 4 of the Competition Act, 2002, regarding unilateral changes in housekeeping staff allotment and increased maintenance charges. The CCI determined that the opposite parties qualified as enterprises under Section 2(h) as they undertook commercial activities. The relevant geographic market was defined as Bangalore Metropolitan Region, and the relevant product market as provision of services for development and sale of apartments catering to senior citizens in that region. After analyzing the market delineation and dominance factors under Section 19(4), the CCI found no prima facie case of contravention and closed the information under Section 26(2), rejecting relief claims under Section 33.

Abuse of dominant position - relevant market delineation - relevant geographic market - tie-in arrangement - section 3(4) applicability - enterprise - prima facie closure under Section 26(2)Enterprise - Opposite Parties fall within the definition of 'enterprise'. - HELD THAT: - The Commission held that Opposite Parties, being engaged in commercial activities such as development, sale and provision of services for the project, squarely fall within the ambit of 'enterprise' under the Act. This determination is a preliminary threshold for any analysis under Section 4 and related provisions. [Paras 15]Opposite Parties are enterprises for the purposes of the Act.Relevant market delineation - relevant geographic market - The relevant market is the market for provision of services for development and sale of apartments to cater to senior citizens in the Bangalore Metropolitan Region. - HELD THAT: - The Commission observed that apartments designed for senior citizens possess distinct characteristics (medical emergency facility, food/community kitchen, geriatric gym, nurse/paramedic availability, 24*7 housekeeping, senior-friendly infrastructure etc.) that make them generally non-substitutable with regular apartments, supporting treatment as a separate relevant product. Considering the project's location and distinct conditions of competition, the appropriate geographic market is the Bangalore Metropolitan Region. On this basis, the Commission formed a prima facie view on the relevant market for adjudication. [Paras 16, 17, 18]Relevant product market and geographic market as stated were delineated for the matter.Abuse of dominant position - OP-3 does not hold a dominant position in the delineated relevant market and therefore further examination of alleged abuse by OP-3 is not required. - HELD THAT: - Having identified the relevant market as development and sale of apartments for senior citizens in Bangalore Metropolitan Region, the Commission noted the presence of multiple other developers offering similar services in that region. These competitors (identified from public domain) impose competitive constraints on OP-3. Consequently, OP-3 lacks the requisite strength to operate independently of competitive forces, and there is no need to proceed to examine alleged abusive conduct by OP-3 under Section 4. [Paras 19]No prima facie dominance of OP-3; no further inquiry into OP-3's alleged abuse of dominance.Tie-in arrangement - section 3(4) applicability - The alleged tie-in arrangement is not covered by Section 3(4) because the impugned agreement is between an enterprise and an end consumer. - HELD THAT: - For Section 3(4) to apply, the parties must operate at different levels of the production chain in different markets. The impugned agreement, however, is between the developer (enterprise) and the allottee (end consumer). The Commission applied the established ratio that agreements between enterprises and end consumers do not fall within Section 3(4)'s ambit, following earlier precedent. Accordingly, the factual claim of a tie-in between the developer and the service provider, insofar as it rests on the sale/service agreement with the allottee, does not constitute a contravention under Section 3(4). [Paras 20]Section 3(4) is not attracted to the impugned agreement; no prima facie case under Section 3(4).Prima facie closure under Section 26(2) - There is no prima facie case; the Information is closed under Section 26(2) and interim relief sought is rejected. - HELD THAT: - Weighing the determinations-Opposite Parties being enterprises, the delineated relevant market, absence of dominance of OP-3, and the inapplicability of Section 3(4) to an agreement with an end consumer-the Commission concluded that the Information does not disclose a prima facie contravention warranting further investigation. Consequently, the request for interim relief (formation of a residents' committee and related measures) is unnecessary and rejected. [Paras 21]Information closed forthwith under Section 26(2); no reliefs or interim measures granted.Final Conclusion: The Commission found Opposite Parties to be enterprises, delineated the relevant market as development and sale of apartments for senior citizens in the Bangalore Metropolitan Region, concluded OP-3 is not dominant, held Section 3(4) inapplicable to the agreement with an end consumer, and accordingly found no prima facie case; the Information is closed under Section 26(2) and the sought interim relief is rejected.

2024 (11) TMI 933 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues:
Alleged contravention of provisions of the Competition Act by chess associations leading to suspension of a member for organizing an unauthorized tournament.

Analysis:
The case involved an Information filed under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of the Act by the General Secretary and President of Thoothukudi District Chess Association (TDCA) and the General Secretary of Tamil Nadu State Chess Association (TNSCA). The Informant, a former Joint Secretary of TDCA, organized a friendly chess match that was deemed unauthorized by TDCA. The Informant claimed to have obtained oral consent from the Vice President of TDCA for the match.

The Informant received a show cause notice from TDCA regarding the unauthorized tournament, to which he responded by explaining the nature of the event and the miscommunication regarding approval. Subsequently, the Informant was suspended from all chess activities for two years by TDCA, leading to his request to TNSCA to set aside the suspension order. The Informant also sought relief for mental agony, financial loss, and damage to reputation caused by the suspension.

The Commission noted that the case primarily involved disciplinary proceedings by the chess associations against the Informant for organizing the unauthorized tournament, which did not raise any competition concerns under the Competition Act, 2002. Therefore, the Commission decided that no contravention of the Act necessitating an investigation was established, and the matter was closed under Section 26(2) of the Act. As a result, no interim relief under Section 33 of the Act was deemed necessary.

The Secretary was directed to communicate the decision to the Informant, indicating that the case did not warrant further investigation or action under competition law. The judgment focused on the disciplinary actions taken by the chess associations against the Informant rather than competition law violations, leading to the closure of the case without further proceedings or relief granted under the Act.

Chess Tournament Dispute Dismissed; No Competition Law Violations Found by Commission.
The Commission concluded that the case, centered on disciplinary actions by chess associations against the Informant for organizing an unauthorized tournament, did not present any competition concerns under the Competition Act, 2002. Consequently, the Commission determined that no contravention of the Act warranted an investigation, leading to the closure of the matter under Section 26(2) of the Act. No interim relief was necessary under Section 33, and the decision was communicated to the Informant, emphasizing the focus on disciplinary proceedings rather than competition law violations.

Disciplinary proceedings - competition concern under the Competition Act, 2002 - no prima facie case for investigation - closure under Section 26(2) of the Act - no interim relief under Section 33 of the ActDisciplinary proceedings - competition concern under the Competition Act, 2002 - no prima facie case for investigation - Disciplinary suspension by a sports association does not, on the material before the Commission, constitute a competition law concern warranting investigation. - HELD THAT: - The Commission found that the core grievance arose from disciplinary action taken by the district and state chess associations against the informant for organising an allegedly unauthorized inter-taluk match. The matter was prima facie of the character of internal disciplinary proceedings under the associations' regulations. Having considered the Information and the correspondence relied upon by the informant, the Commission concluded that the facts as presented do not raise issues cognisable under the Competition Act, 2002 and therefore do not justify initiating an investigation under the Act. The Commission treated the allegations as lacking the requisite nexus to competition law and did not find material prima facie evidence of contravention of the Act. [Paras 15]No case of contravention warranting investigation was made out; the disciplinary matter does not amount to a competition concern.Closure under Section 26(2) of the Act - no interim relief under Section 33 of the Act - Appropriate procedural disposition of the Information before the Commission. - HELD THAT: - In light of the conclusion that no competition law contravention was prima facie established, the Commission exercised its power under Section 26(2) to close the matter forthwith. Consequentially, the Commission held that there was no basis for granting any interim relief under Section 33, since no investigation would be directed to proceed. [Paras 16]Information closed under Section 26(2); no interim relief granted under Section 33.Final Conclusion: The Commission concluded that the informant's complaint relates to internal disciplinary action by chess associations and does not raise a competition law issue; the matter is closed under Section 26(2) of the Competition Act, 2002 and no interim relief under Section 33 is warranted.

2024 (4) TMI 1194 - CALCUTTA HIGH COURT Law of Competition

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Issues: (i) Whether a writ of mandamus could be issued directing the regulator to commence or hasten adjudication on the petitioners' complaint when the statutory process was already underway; (ii) Whether the petitioners made out a prima facie case for restraining the respondents from insisting on the disputed payment arrangement and from taking delisting or other coercive steps.

Issue (i): Whether a writ of mandamus could be issued directing the regulator to commence or hasten adjudication on the petitioners' complaint when the statutory process was already underway.

Analysis: The complaint had been lodged only shortly before the writ petition, and the regulator had already issued notice and commenced consideration of the matter. The statutory scheme under the Payment and Settlement Systems Act, 2007 entrusts the regulator with supervisory and adjudicatory functions, including dispute resolution between system participants and system providers. In that setting, the Court held that no cause of action for a mandamus to trigger or accelerate adjudication was disclosed, and no legitimate apprehension was shown that the regulator would keep the matter pending indefinitely.

Conclusion: The request for a mandamus to compel or hasten regulatory adjudication was not maintainable and was rejected as premature.

Issue (ii): Whether the petitioners made out a prima facie case for restraining the respondents from insisting on the disputed payment arrangement and from taking delisting or other coercive steps.

Analysis: On the agreements and payment architecture placed before the Court, the charges appeared to be service charges for hosting and distribution facilities rather than a system of end-to-end payment aggregation. The material showed that multiple payment modes were available on the platform and that the disputed questions were at best arguable, requiring adjudication by the competent statutory fora. The Court therefore declined to enter the merits at the interim stage and refused to grant protective relief against the alleged payment model or consequential coercive action.

Conclusion: No prima facie basis was found for the requested restraint, and interim protection was refused.

Final Conclusion: The writ petition was found to be premature and unsupported by a sufficient interim case, while leaving the merits of the statutory disputes to be decided by the competent regulators and forums.

Ratio Decidendi: Where a specialised statute vests adjudicatory power in a designated regulator that has already commenced consideration of the complaint, a writ court will not ordinarily compel expedition or grant interim restraint on disputed commercial arrangements absent a clear prima facie entitlement.

Specialised statutory adjudication bars mandamus to hasten regulator action and interim restraint on disputed payment arrangements.
Where a specialised statute vests dispute resolution in the regulator and the complaint process has already begun, a writ of mandamus to compel or hasten adjudication is premature and will not ordinarily lie. The Court noted that the regulator had issued notice and was already considering the complaint, so no basis existed for alleging indefinite delay. It also declined interim restraint against the disputed payment arrangement or coercive steps, as the contractual and commercial issues were still arguable and required determination by the competent statutory fora. The writ petition was therefore treated as premature, with the merits left to the designated regulators and forums.

Payment Aggregator - Regulatory and adjudicatory jurisdiction of the Reserve Bank of India - Primacy of sectoral regulator in adjudication of payment systems disputes - Interim restraint on delisting and coercive measures pending regulatory adjudication - Prima facie case threshold for exercise of writ jurisdictionPayment Aggregator - Prima facie case threshold for exercise of writ jurisdiction - Whether the Google group of companies (other than the entity incorporated and authorised in India) are, on the materials before the Court, operating as unregistered Payment Aggregators and whether a writ court should grant interim relief on that basis. - HELD THAT: - The Court examined the definition of Payment Aggregator in the 2020 RBI Guidelines and the contractual framework between the petitioners and various Google entities. The development/distribution agreement and related material showed that Google (as platform) charges service fees for hosting and facilitating distribution, and that one group entity (respondent no.6) is incorporated and authorised in India to operate as a PA. On the material before it the court found that the petitioners' contentions were at best arguable but not palpable or ex facie established to show that the Google group (other than the authorised Indian entity) is operating as a PA without registration. The questions raised were therefore held to be triable matters properly within the regulatory adjudicatory mechanism established under the PSS Act and not fit for determination by the writ court at this interlocutory stage. [Paras 24, 26, 27, 29, 30]The Court refused to hold, on the materials before it, that the Google group of companies (other than the authorised Indian PA) were acting as unregistered PAs and declined to enter into merits; the matter is to be considered by the RBI.Regulatory and adjudicatory jurisdiction of the Reserve Bank of India - Primacy of sectoral regulator in adjudication of payment systems disputes - Whether the writ court should direct the Reserve Bank of India to initiate or conclude adjudicatory proceedings immediately on the petitioners' representation. - HELD THAT: - The Court recognised that the RBI is the statutory regulator and adjudicator for payment systems under the PSS Act and that it has the ecosystem to investigate and adjudicate contraventions. The petitioners filed their representation on February 19, 2024 and issued this writ the next day; the Court found no cause of action to compel immediate adjudication within 24 hours. The RBI had already taken steps, including issuing notice and holding meetings. Given the nature of issues and the need for enquiry and opportunity of hearing, the Court held that it would be inappropriate to usurp the RBI's function and that the RBI should be permitted a reasonable timeframe to conclude its process. [Paras 14, 15, 16, 19, 31]The Court declined to direct the RBI to initiate or complete adjudicatory proceedings immediately and accepted that the RBI may take up to a reasonable period to decide the matter.Interim restraint on delisting and coercive measures pending regulatory adjudication - Prima facie case threshold for exercise of writ jurisdiction - Whether interim reliefs restraining respondents from enforcing payments and from delisting the petitioner from Google Play Store pending regulatory adjudication should be granted. - HELD THAT: - The Court analysed the reliefs sought and concluded that the substantive reliefs (restraint from enforcing payment mechanisms and from delisting) were the true object of the petition and were contradictory to the primary reliefs seeking RBI action. Given that the merits were not convincingly established on the record and the designated regulator (and other fora such as the CCI) were seized or available to adjudicate, the Court found it would be premature to grant the injunctive reliefs sought. The Court therefore refused to grant interim protection against payment enforcement or delisting. [Paras 17, 18, 20, 30, 31]The Court refused to grant the requested interim restraints and dismissed the petition on contest.Final Conclusion: Writ petition dismissed on contest. The High Court declined to decide the merits on whether non Indian Google entities act as unregistered Payment Aggregators, refused to grant interim restraint against payment enforcement or delisting, and left the issues to be adjudicated by the Reserve Bank of India (and other competent fora), expressing the hope that the RBI will endeavour to decide the matter preferably within 12 weeks.

2024 (4) TMI 176 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI Law of Competition

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Issues:
The appeal filed u/s 53B of the Competition Act, 2002 against an order dated 10.07.2020 in Reference Case No.03/2016 involving contravention of Section 3(3)(a), 3(3)(c), and 3(3)(d) read with Section 3(1) of the Competition Act.

Issue 1: Allegations against Appellant No.1
The learned counsel argued that the Commission erroneously found Appellant No.1 guilty of contravention of the Competition Act without proper evidence or admission. It was contended that Appellant No.1 was wrongly clubbed with the cartel members without any valid basis, and fundamental principles of competition law were not followed. The submissions on behalf of Appellant No.1 were not considered in the impugned order, despite disproving the allegations against it.

Issue 2: Defense of Appellant No.1
The main contention was that Appellant No.1 only submitted bids for tenders without discussing them with other cartel members. The admissions made by an employee of the appellant were argued to be unauthorized and not binding on the company. Witness statements from other individuals also supported the defense that Appellant No.1 was not part of the cartel.

Issue 3: Evidence of Cartel Activities
Confessions of cartel members, including creating email accounts for communication, sharing bid prices, allocating quantities, and coordinating on tender bids, were presented as evidence. The statements of various witnesses implicated the appellant company in cartel activities, despite attempts to disown employee statements. Emails exchanged among cartel members further demonstrated the coordination and sharing of sensitive information.

Issue 4: Membership in the Cartel
The argument that mere receipt of information without active participation does not establish cartel membership was refuted. The evidence of cartelization, including consistent statements and email exchanges among members, indicated the appellant's involvement. The strict rules of evidence were deemed not applicable in competition proceedings, and even attempts to rig bids were considered sufficient to attract legal provisions.

Issue 5: Dismissal of Appeal
In light of the evidence presented, including the continuous receipt of emails without objection and access to shared email accounts, the appeal and all pending applications were dismissed. The exchange of information among cartel members, even without active participation from the appellant, was deemed sufficient to establish involvement in anti-competitive conduct.

This summary provides a detailed breakdown of the judgment, highlighting the key arguments, evidence, and conclusions related to the issues raised in the appeal.

Appeal dismissed as company's five-year receipt of cartel emails without protest proves participation in bid rigging under Competition Act Sections 3(3)(a), 3(3)(c), 3(3)(d)
The NCLAT dismissed an appeal challenging cartelisation findings under Competition Act Sections 3(3)(a), 3(3)(c), and 3(3)(d) read with Section 3(1). The appellant argued it was wrongly included in the cartel without proper consideration by the Commission. The NCLAT held that strict evidence rules don't apply in competition proceedings. The appellant received cartel emails for five years without protest or requesting cessation, indicating meeting of minds. Evidence showed all parties had access to a shared email account. The tribunal found that mere information exchange suffices for bid rigging cases, and continuous receipt of emails without objection demonstrated participation in anti-competitive conduct.

Contravention of Section 3(3) and Section 3(1) of the Competition Act - Cartelisation - Bid rigging - Exchange of information between competitors - Receipt of information versus exchange of information - Admissions and confessions of company employees - Holistic evaluation of evidence in competition proceedings - Strict rules of evidence not applicable in competition proceedings - Attempt to rig a bid as sufficient to attract Section 3Cartelisation - Bid rigging - Contravention of Section 3(3) and Section 3(1) of the Competition Act - Appellant was a participant in the cartel and liable for contravention of Section 3(3) read with Section 3(1) of the Competition Act. - HELD THAT: - The Tribunal accepted the Commission's finding that contemporaneous admissions by various cartel members, contemporaneous emails allocating tender quantities and pricing, and the confessions of appellant's managerial personnel cumulatively establish the appellant's participation in cartel activity. The internal emails and spreadsheets showing allocation of quantities and coordinated pricing, together with oral confirmations by multiple parties, were treated as probative of an agreement to rig bids. The fact that some witnesses exonerated the appellant did not outweigh the consistent evidence implicating the appellant, including statements by the appellant's own employees that they received and acted upon the communications. Given this matrix of evidence, the appellant's contention that it merely submitted independent bids was rejected and liability under Section 3(3) read with Section 3(1) was upheld. [Paras 11, 13, 14, 15, 19]Appellant held to be part of the cartel and guilty of contravention of Section 3(3) read with Section 3(1).Admissions and confessions of company employees - Receipt of information versus exchange of information - Exchange of information between competitors - Statements/confessions of the appellant's employees and receipt of cartel communications were sufficient to attribute cartel participation to the company; mere receipt of information without overt sending was not a defence where evidence shows continued reception and access consistent with participation. - HELD THAT: - The Tribunal rejected the submission that an employee's statements were unauthorised and therefore non-binding, observing that managerial-level admissions and contemporaneous conduct (receipt and use of emails, passing messages to seniors, and lack of protest) indicated corporate knowledge and involvement. The court held that prolonged receipt of coordinated communications without objection, and evidence that parties had access to the cartel e-mail account, supported an inference of mutuality and meeting of minds. Consequently, the narrow pleading that the appellant only received and did not exchange information was insufficient to discharge its statutory liability. [Paras 11, 12, 21]Employee confessions and prolonged receipt of cartel communications were held sufficient to attribute participation to the company; mere receipt did not absolve liability.Holistic evaluation of evidence in competition proceedings - Strict rules of evidence not applicable in competition proceedings - Attempt to rig a bid as sufficient to attract Section 3 - Competition proceedings permit a holistic appraisal of oral and documentary material and are not constrained by strict rules of evidence; an attempt to rig bids falls within the definition of cartelisation. - HELD THAT: - Relying on precedent and statutory scheme, the Tribunal reiterated that proceedings under the Competition Act call for holistic scrutiny of oral statements and documents and do not demand adherence to strict evidentiary formalities applicable in other fora. The Tribunal accepted that consistent oral confessions and contemporaneous documentary records, taken together, can establish anti-competitive conduct. Further, the Tribunal emphasised that an attempt to rig bids is sufficient to attract the prohibition on cartelisation, so that evidence of pre-award coordination and allocation of quantities was determinative even if full implementation varied. [Paras 19, 20, 21]Holistic assessment of oral and documentary evidence is permissible and an attempt to rig bids suffices to establish contravention under Section 3.Final Conclusion: The appeal and all pending applications are dismissed; the Tribunal upheld the Commission's finding of cartelisation and liability of the appellant under Section 3(3) read with Section 3(1), applying a holistic evidentiary approach and treating employee confessions and sustained receipt of cartel communications as sufficient proof of participation.

2024 (11) TMI 932 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Issues:
1. Interim relief prayers under Section 33 of the Competition Act, 2002 against Google.
2. Nexus between relief sought and issues under investigation.
3. Criteria for granting interim relief as per legal principles.

Analysis:
The judgment pertains to interim relief prayers filed against Google under Section 33 of the Competition Act, 2002. The Competition Commission of India had earlier found a prima facie case of contravention of Section 4 of the Act against Google and ordered an investigation. The Informants, including People Interactive India Private Limited (PIIPL) and Indian Broadcasting and Digital Foundation (IBDF), sought various interim reliefs related to Google's payment policies and app store guidelines. The Commission considered the relief prayers in light of the statutory scheme and legal principles governing the grant of interim relief.

The Supreme Court's guidance in Competition Commission of India v. Steel Authority of India Ltd. emphasized that interim relief should be granted sparingly and under compelling circumstances, with a high degree of satisfaction that contravention of the Act has occurred or is about to occur. The Commission noted the need for a clear nexus between relief sought and issues under investigation. It found that some relief prayers did not align with the specific issues outlined for investigation, and therefore, could not be granted.

Regarding the relief sought to restrain Google from collecting fees for transactions, the Commission acknowledged concerns about Google's fee structure but also recognized the costs associated with maintaining app stores. It highlighted that requiring Google to offer its platform for free could have unintended consequences and impact the platform's functionality. The Commission concluded that the Informants had not demonstrated a strong case for complete restraint on Google from fee collection.

Furthermore, the Commission found that the Informants failed to meet the criteria for granting interim relief as per legal principles. They did not establish a higher level of prima facie case or show irreparable harm that could not be remedied through compensation. The balance of convenience was also not in favor of the Informants. Consequently, the Commission dismissed the applications for interim relief, emphasizing that the order did not express a final opinion on the case's merits, and the investigation by the Director General would proceed impartially.

In conclusion, the judgment provides a detailed analysis of the interim relief prayers, emphasizing the need for a strong nexus between relief sought and issues under investigation, adherence to legal principles for granting interim relief, and consideration of the broader implications of relief measures on the market dynamics.

CCI dismisses interim relief applications against Google under Section 33 for alleged Section 4 violations due to insufficient prima facie case
CCI dismissed applications for interim relief against Google under Section 33 of Competition Act, 2002 for alleged Section 4 violations. The Commission held that informants failed to establish prima facie case, irreparable harm, or balance of convenience favoring interim relief. CCI noted lack of nexus between relief sought and investigation issues, finding no corresponding investigation directions for several prayers including data collection and UI/UX interface matters. The Commission emphasized need for proportionate measures to preserve platform ecosystem integrity while protecting competition.

Interim orders under Section 33 - Prima facie finding under Section 26(1) - Abuse of dominance under Section 4 - Relevant market delineation - Requirement of nexus between interim relief and investigation issues - Test for grant of interim relief requiring higher satisfaction, necessity, irreparable harm and balance of convenience - Proportionality of interim measures and adequacy of monetary compensationRequirement of nexus between interim relief and investigation issues - Interim orders under Section 33 - Interim reliefs which do not correspond to the issues directed for investigation cannot be granted - HELD THAT: - The Commission held that Section 33 permits temporary restraint only where the Commission is satisfied that the act in question has been or is about to be committed and such restraint is necessary. A fundamental principle for granting interim relief is a clear nexus between the relief sought and the issues on which investigation has been directed. The Commission examined the prayers and the scope of the DG's mandate and found several interim prayers (for example, relating to collection of data and UI/UX requirements) had no corresponding direction for investigation. As such, those reliefs cannot be granted at the interim stage because they fall outside the subject-matter of the inquiry prescribed by the prima facie order dated 15.03.2024. [Paras 14, 17]Interim prayers that lack a direct nexus with the issues under investigation are declined.Test for grant of interim relief requiring higher satisfaction, necessity, irreparable harm and balance of convenience - Proportionality of interim measures and adequacy of monetary compensation - Prayer to restrain Google from collecting fees/commissions for in app purchases or paid downloads is refused - HELD THAT: - Applying the principles in Competition Commission of India v. Steel Authority of India Ltd., the Commission noted that the power under Section 33 must be exercised sparingly and only upon a high degree of satisfaction that contravention has been committed or is about to be committed, that restraint is necessary, and that irreparable harm or adverse effect on competition would occur. The Informants failed to demonstrate such a heightened prima facie case, irreparable harm not remediable by monetary compensation, or that the balance of convenience favoured a complete restraint on Google's fee collection. The Commission also observed the practical and economic implications of requiring Google to provide the Play platform free of consideration and recorded that no other forum has granted comparable relief. Consequently, a complete prohibition on Google's collection of fees or commissions was not warranted as an interim measure. [Paras 12, 15, 16, 17]The prayer to restrain Google from levying fees/commissions on in app purchases or paid downloads is rejected.Final Conclusion: The Commission dismissed the interim relief applications in their entirety: prayers lacking nexus with the scope of investigation are declined, and the request to restrain Google from collecting fees/commissions on paid or in app transactions is refused for want of the heightened satisfaction, necessity, irreparable harm and balance of convenience required under Section 33; the DG investigation will proceed unimpaired and the order does not express any final view on merits.

2024 (11) TMI 999 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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Mall management company cleared of competition law violations over maintenance charges and common area disputes
CCI dismissed allegations against mall management company and maintenance agency under Sections 3 and 4 of Competition Act, 2002. Retail shop owners complained about mall management practices, high maintenance charges, and unauthorized sale of common areas. CCI found no prima facie case of abuse of dominant position or cartel formation, ruling that grievances were contractual/civil disputes rather than competition law violations. Matter closed under Section 26(2) with no relief granted under Section 33.

Abuse of dominant position - Appreciable adverse effect on competition (AAEC) - Cartel / anti-competitive agreement - Relevant market delineation - Prima facie case for investigation under Section 26(2) - Competition Commission jurisdiction to distinguish contractual/civil disputes from competition concernsAbuse of dominant position - Appreciable adverse effect on competition (AAEC) - Allegations of abuse of dominant position causing AAEC under Section 4 of the Act - HELD THAT: - The Commission examined the informants' allegations that OP-1 and OP-2 exercised control over the Mall and charged inflated maintenance and electricity charges, encroached and sold joint common areas, and used coercive measures against shop owners. The Commission observed that the Mall is not the only mall in Gurugram and declined to adopt a narrowly delineated relevant market. Further, the core grievances (maintenance and electricity charges, entitlement to common areas, disputes over management) were characterised as contractual or civil disputes rather than competition law concerns. On the material before it the Commission did not find prima facie evidence that the conduct complained of produced an appreciable adverse effect on competition in a relevant market or constituted abuse of dominance requiring investigation under Section 4. [Paras 20, 22]No prima facie case of abuse of dominant position causing AAEC under Section 4; matter not maintainable under Section 4 on available material.Cartel / anti-competitive agreement - Relevant market delineation - Allegations of anti-competitive agreement/cartel in contravention of Section 3 of the Act - HELD THAT: - The informants alleged that the OPs acted in concert as a cartel to limit services and charge inflated fees. The Commission noted that the informants failed to demonstrate the requisite horizontal relationship or to specify the similar trade or activity necessary to establish an anti-competitive agreement under Section 3(3). Given the nature of the allegations and absence of material establishing concerted action in trade between competing enterprises, the Commission found no merit for examination under Section 3 (including Section 3(4)). [Paras 22]No prima facie case of contravention of Section 3; allegations of cartel/anti-competitive agreement not substantiated for investigation.Prima facie case for investigation under Section 26(2) - Competition Commission jurisdiction to distinguish contractual/civil disputes from competition concerns - Whether the matter should be investigated or closed under Section 26(2) of the Act - HELD THAT: - Having considered the scope of the complaints, the existence of alternative civil proceedings, and the absence of material demonstrating competition law contraventions, the Commission concluded that the present information did not disclose a prima facie case under Sections 3 or 4 warranting investigation by the Director General. The Commission emphasised that its order was confined to the lens of the Competition Act and did not express any view on the merits of civil litigation pending between the parties. [Paras 23, 24]Matter closed forthwith under Section 26(2); no direction for investigation; reliefs sought under Section 33 not considered.Final Conclusion: The Commission found no prima facie contravention of Sections 3 or 4 of the Competition Act on the material before it, treated the core grievances as contractual/civil disputes not raising competition concerns, and accordingly closed the matter under Section 26(2) without directing an investigation.

2024 (11) TMI 931 - COMPETITION COMMISSION OF INDIA (LB) Law of Competition

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No Evidence of Collusion Found in Tender Process; Case Closed by Competition Commission.
The Competition Commission of India concluded that there was no prima facie evidence of contravention of Section 3 of the Competition Act, 2002, regarding alleged cartelization in a tender process by the accused parties. After reviewing the submitted documents, the Commission determined that the evidence did not substantiate claims of collusion or bid rigging. As a result, the Commission decided to close the case under Section 26(2) of the Act, instructing the Secretary to notify the informant of this decision.

Cartelisation - Collusive bidding - Bid rigging - Contravention of Section 3 of the Competition Act, 2002 - Prima facie case for investigation under Section 26(2)Cartelisation - Contravention of Section 3 of the Competition Act, 2002 - Collusive bidding - Allegations that the Opposite Parties colluded to cartelise the Tender and thereby contravened Section 3 of the Act were not substantiated on the record - HELD THAT: - The Informant furnished documents including manufacturer authorisation letters, MSME certificates, lists of consumables, certain purchase orders and experience/performance certificates. The Commission examined these materials and concluded that, on a prima facie basis, they do not substantiate the allegation of collusion or bid rigging in the Tender. The available material does not prima facie indicate coordinated bidding behaviour or concerted action among the Opposite Parties that would constitute a contravention of Section 3(1) read with Section 3(3)(d). [Paras 7, 8]No prima facie case of cartelisation or collusive bidding under Section 3 was found on the material placed before the CommissionPrima facie case for investigation under Section 26(2) - Investigation under Section 26(2) - Whether the matter warranted an investigation under Section 26(2) of the Act - HELD THAT: - Having found that the documents and material provided by the Informant do not prima facie establish bid rigging or collusive conduct, the Commission applied the threshold for opening an investigation under Section 26(2). In the absence of prima facie evidence of contravention of Section 3, the statutory threshold for initiating an inquiry is not met. Consequently, there is no basis to proceed with an investigation into the allegations made. [Paras 8, 9]The matter did not merit investigation and was closed under Section 26(2) of the ActFinal Conclusion: The Commission held that the material on record does not prima facie establish cartelisation or collusive bidding in relation to the Tender; accordingly, no case for investigation under Section 26(2) of the Competition Act, 2002 was made out and the Information was closed, with directions to communicate the closure to the Informant.

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