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

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

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

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

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

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

A penalty of INR 6.92 lakhs was also imposed on AICF for indulging into the anti-competitive conduct. A copy of the CCI’s order passed in Case No. 79 of 2011 has been uploaded on the website of CCI at www.cci.gov.in.

Abuse of dominant position restricting player participation leads to sanction and mandated reform of authorisation and disciplinary rules. The Commission found the federation abused a dominant position by restricting player participation in unauthorised events, thereby denying market access and imposing unreasonable vertical restraints in contravention of Sections 4(1), 4(2)(b)(i) and 4(2)(c), and amounting to exclusive distribution and refusal to deal under Sections 3(4)(c) and 3(4)(d). The federation was directed to cease such conducts, adopt fair and transparent authorisation parameters for tournaments, ensure proportional disciplinary processes with demonstrated prejudice, review similar cases, and report compliance within sixty days, with a penalty imposed for the conduct.