TaxTMI 
TaxTMI 
2013 (5) TMI 962
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....nditions by HI, on players for participation in un-sanctioned prospective private professional leagues resulting in undue restrictions on mobility of players and on prospective private professional leagues leading to denial of entry to competing leagues. 2. Parties to the Case and related parties. 2.1. The Informants in this case are a group of former Olympians and professional Indian Hockey players namely Sh. Dhanraj Pillay, Sh. Gundeep Kumar, Sh. Gurbax Singh Grewal, Sh. Balbir Singh Grewal, Sh. Alloysius Edwards and Sh. V. Baskaran. 2.2. The Opposite Party, Hockey India, is the National Sports Federation of India for the sport of Hockey affiliated to the Indian Olympic Association (IOA), Asian Hockey Federation (AHF) and International Hockey Federation (FIH). 2.3. A related party to HI is FIH. FIH is the international governing body for the sport of Hockey recognized by the International Olympic Committee (IOC). FIH is responsible for integrity of the sport at the international level and to ensure the development of sport throughout the world. 2.4. Indian Hockey Federation (IHF) is the National Sports Federation for the sport of Hockey affiliated to Indian Olympic....
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....s is an exclusive supply agreement and the restrictive conditions included thereunder, constitute a violation of Section 3(4) of the Act. The informants made the following submissions in support of their allegations against HI 3.6. Jurisdiction issue 3.6.1. The informants submitted that HI, which is a society registered under Societies Registration Act 1860 qualifies to be a person as defined under Section 2(l)(v) of the Act. Also, the informant submitted that HI is engaged in activities related to conducting and governing of international hockey tournaments in India, facilitating sponsorship for the team, obtaining training facilities etc. According to the informants, these activities are commercial and HI is an enterprise under section 2(h) of the Act. 3.7. Abuse of dominance 3.7.1. Relevant Market The informants defined the relevant market as, "the market for conducting and governing international hockey activities for both men and women in India". The definition given by informants covered in their view, both demand and supply side substitutability. 3.7.1.1. Demand Side substitutability The informants submitted that the hockey players are the consumers o....
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....on by international Federations and service providers for domestic events cannot shift to international events in the absence of such recognition. 3.7.1.4. On the issue of geographic market the informants submitted that uniformity in the conditions of CoC agreements with players implies the market is pan India. On the possibility of extending the market beyond the boundaries of India, the informants averred that that development of the game, requirement of players and factors relevant for team selection vary from country to country restricting the relevant market to India. 3.8. Assessment of Dominance In their submissions the informants have stated that HI is in a dominant position in the relevant market as defined on account of the following factors: i) Monopoly position of HI as a regulatory body for Hockey in India: Emphasis was laid on the monopoly of HI on account of the pyramid structure of sports governance and consequent endorsement from FIH as the National Association for Hockey in India. HI is the only body empowered to select the national team to represent India in international competition and to enter into CoC agreements with players. These powers ena....
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....ACCC)(Australian Ice Hockey Federation Notification No. N94049, dated 02nd March 2010, Public Register No. C2009/1391, Australian Competition and Consumer Commission) where it was noted that the power of IHA to expel or suspend members of the IHA for participating in unsanctioned events would not only restrict the number of leagues in the market and the overall consumer choice but would also affect the choices available to Ice Hockey players. 3.10. Anticompetitive agreements: Violation of Section 3(4) According to the informants, the CoC agreement which is entered into between HI and the players is a vertical agreement and is in the nature of an exclusive supply agreement as it exclusively ties down the player to HI and restricts their options to participate in other tournaments. 3.10.1. All Hockey players that sign the CoC agreement are entirely dependent on HI's approval to play in any event. HI is in a position to refuse permission even if there is no conflict in the schedule of such event when it is the duty of a player to represent India in an international tournament. Specific clauses of CoC Agreement related to seeking of NOC, disciplinary actions against ....
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....rder under section 33 of the Competition Act restraining HI from abusing its dominant position and entering into anti-competitive agreements. However, the Commission was of the opinion that there is no irreparable or irretrievable harm to the players and the application filed by informants under section 33 was declined. 6. DG Investigation Report The DG investigated the following key issues pertaining to the case: i. jurisdiction of the Commission on HI and FIH and the application of competition laws. ii. delineation of the relevant market in the case iii. assessment of dominance in the relevant market. iv. allegations related to violation of Section 4 of the Act v. allegations related to anti-competitive agreements in violation of Section 3 of the Act. On the basis of investigation carried out, the findings of DG are as under: 6.1. Jurisdiction on HI and FIH and application of competition laws. 6.1.1. On the issue of jurisdiction of the Commission the DG in his report has observed that, while it is true that HI and FIH are non-profit organizations, however, the activities carried out by the HI as well as FIH such as grant....
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....has been concluded in the DG report that FIH falls well within the ambit of Competition Act. 6.2. Delineation and defining Relevant Market 6.2.1. On the aspect of delineation of relevant market, DG agreed with the informants that given the facts of the case, hockey players are the consumers of services rendered by HI. Accordingly, DG considered the supply side substitutability from the viewpoint of HI and demand side substitutability from the view point of Hockey players to define the relevant market. 6.2.2. The DG report recognizes that the conduct and governance of activities for a certain sport is a specialised area of service which involves important responsibilities and crucial functions by service provider. Conducting and governing international hockey activities in India constitute a separate and unique service market and the supply of such service cannot be considered substitutable or interchangeable with any other service. 6.2.3. The market for conducting and governing international hockey is different from market for conducting and governing domestic hockey activities because conducting international hockey activities require fulfilment of additional condition....
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....t the NCAA's role "in the regulation of amateur collegiate sports" has rendered it such a powerful player in areas that touch collegiate sports that "the absence of proof of market power does not justify" anti-competitive behaviour. 6.3.2. To DG, it was the pyramidal structure that leads to creation of regulatory barriers which constrain entry in the relevant market as defined. Equally important fallout of these regulatory powers of HI is that, the hockey players who are the consumers and constitute the demand side of the market, are not in any position to exert countervailing pressures on HI, primarily because of the sole mandate of HI to select the members of Indian National Hockey Team. On the aspect of position of strength of National Associations' vis a vis the players, DG referred to the judgment cited by the informants in the Snooker case, where WPBSA was the regulatory body for professional Snooker where it was held, From the point of view of the player, whether one considers him as seller (of his services) or as buyer (of the services of a tournament organizer), he is dependent on tournament organizers, since without tournaments he will have no opportunity to....
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....e a domestic event which was approved by one of the national associations for hockey in India, the IHF, and observed that the action of HI and the FIH to prevent the national hockey players to play WSH series by issuing a warning letter and forfeiting their right to play in a national hockey team for a period of 12 months is anticompetitive in violations of the provisions of the Act. 6.4.2.4. Based on the statement of Sh. Dhanraj Pillay and the information provided by the Ministry of Youth Affairs and Sports vide their letter dated 05.06.2012, the DG concluded that the Indian Hockey Team which went to London to play 4 nation test matches and 7 nation Azlan Shah hockey tournament in Malaysia, did not include any of the players who participated in WSH. Similarly the Junior team also have not taken any player, who had participated in the WSH. 6.4.2.5. In light of the above mentioned facts, DG concluded, that HI acting through FIH has abused its dominance to maintain their control over hockey sports in India. They have restricted players to participate in any match or event which is not sanctioned by them. Their conduct has also resulted in foreclosure of market for any other ent....
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....ore for preparation and selection of Indian team after the WSH series, none of those players, who participated in the WSH series were included in the 48 core probables. Further, the Indian team which went to London to play four nation test matches and seven nations Azlan Shah Hockey tournament in Malaysia, none of the players who participated in the WSH, and junior players who had participated in WSH were included in the squad. 6.5.5. The DG further observes that the CoC signed by the hockey players required the HI approval to play in any event by way of NOC. As such the pre-condition of not allowing the top hockey players to play unsanctioned event on a threat of not taking them into the national hockey team selected to play international Olympic match is unfair and without any justification, places restrictive conditions on hockey players in India. Further, the action of the HI of not taking any player in the national team who had played WSH in 2012 substantiates the allegation of the IP. 6.5.6. The DG also concluded that, by virtue of the powers vested in the HI vis-à-vis the selection of the national team, HI is able to determine the tournaments in which the player....
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....m. c) there is no system of a regular employment or engagement of players by HI. d) no commercial relationship whatsoever is existing between players and HI at present. The lack of commercial relationship between HI and players nullified the application of Sec 3(4) of the Act and the allegation of contravention of this section. Whether the decision of FIH & HI to impose ban on WSH attracts provisions of section 3(3) of the Act? 6.6.2. The DG stated that the recommendations made by an association are deemed to be arrangement between the members of the association and are covered under the definition of agreement as contained in the Act. 6.6.2.1. It was found that the decision regarding sanctioned and unsanctioned events was taken during the meeting of its executive body during 4th-6th March 2011. Article 18 of the FIH Statute provides the method of amendment or modification in the bye-laws. Article 18 of Statues and Bye-laws of FIH says that. * these statutes may be amended added to or rescinded by a resolution of the Congress passed by a special majority. * no such resolution shall be submitted to the Congress unless the prior notice ....
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.... in the market. The Association collectively decided not to have any dealing with a person who does not agree with the directions of the Association. Thus based on the practice of non-cooperation and imposition of ban on WSH is found to be in contravention of section 3(3)(b) of the Act. Its conduct ultimately impedes competition in the market. 6.6.2.6. As per the DG, the inquiries revealed that the opposite party and FIH has taken decisions as well as given directions to its members to not deal with WSH. The activities of any association should not be intended to restrain competition or to harm consumers. But, the purpose of the association should be to promote competition and to benefit consumers. Neither the association nor any of its committees or activities should be used for the purpose of bringing about or attempting to bring about any understanding or agreement, written or oral, formal or informal, express or implied, between and among competitors with regard to their prices, terms or conditions of sale, distribution, volume of production, territories, customers, or credit terms. Each member of the association is obligated and required to exercise its independent business....
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....lar in approach. The important points made by opposite parties on each aspect of DG's investigation are as under: 7.2. Jurisdiction 7.2.1. HI and FIH stated that their activities fall outside the scope of the Competition Act, 2002. It was submitted that both FIH and HI are acting as a custodian of sport which is a public good, promoting the public interest by organizing, governing and regulating the sport in the way that will allow it to flourish. It was also stated that sports governing bodies are not a commercial enterprise working for profit to generate a return for investors, and its organizational, governance and regulatory role is not an economic activity. 7.2.2. The issue of 'specificities of sport' recognized in number of cases by the European Court of Justice and European Commission was also raised. Emphasis was placed on the fact, that given the specificities of sport, the competition law must be applied with sufficient flexibility to take account of the unique features inherent in sports that distinguish it from other sectors. 7.2.3. The parties cited the decisions of EC in cases such as Walrave (Case 36/74 Walrave and Koch [1974] ECR 1405), Delie....
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....ory role and not an economic function with respect to selection of the national team and training of sportsmen and other activities undertaken for the development of the sport. 7.3.3. On the issue of Relevant Geographic Market, HI submitted that WSH is an international event and Nimbus intended to broadcast the event worldwide and therefore the relevant geographic market cannot be pan India. 7.4. Assessment of Dominance 7.4.1. HI submitted that the pyramid structure for regulation and organization of competitive sport is vital and in line with established sport structure. HI as the National Association of India, is entrusted with upholding the values enshrined in the Olympic Charter. The sole purpose and function of sports governing bodies such as HI is to act as custodian of the sport in promoting the public interest by organizing, governing and regulating the sport in the way that will allow it to flourish. It stated that regulatory functions cannot be assessed against the yardstick of market forces. 7.4.2. As regards DG's findings on regulatory powers being the source of dominance, HI submitted that the responsibility of sanctioning sports events being held in th....
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....nctioned and unsanctioned events. 7.5.3. FIH submitted that the objectives underlying the Regulations are clear, transparent, and entirely proper and legitimate: (i) to protect the integrity of the sport, and the public's confidence in the ability of its governing bodies to take any action necessary to safeguard that integrity; and (ii) to ensure that due priority is given in the sporting calendar to international events (i.e. events between teams representing different nations). 7.5.3.1. FIH also clarified that the rules requiring participants in official ('sanctioned') events not to participate in unofficial ('unsanctioned') events are inherent in and indispensable to the proper organization and conduct of competitive sport. It was submitted that unsanctioned events threaten to undermine the sporting imperatives on account of: (a) Unsanctioned events are not developed as an integrated part of the official sporting calendar and thereby create potential conflicts between different stake holders that could be damaging to the sport. (b) Organizers, participants of unsanctioned events are not accountable for compliance with rules and regulat....
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.... In other words, their ability to priorities the interests of the national representative team, and so their ability to develop the sport in their countries through the success of their national teams (a matter in which Nimbus has no interest), are completely undermined. 7.6.2. FIH added that an act for refusal of sanction, actuated by reasons that are anti-competitive in nature, without countervailing considerations, may be determined to be anti-competitive, but in the instant case, Nimbus never applied to FIH for sanction of WSH. FIH referred to the communications with WSH to highlight its position on the issue. (v) On the regulations being aimed to counter WSH 7.7.1. FIH defended its regulations by stating that even though the regulations were issued after the announcement of WSH, yet they were applied prospectively and the players/officials who entered into binding agreements with WSH before 31 March 2011 were not to be acted against. When FIH announced the regulations, it is stated that these are not to put off outside interest and investment, rather the aim is protecting the integrity and long term interest of the sport and to ensure that athletes give precedence to ....
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....be eligible for participation in the Olympics, "a competitor, coach, trainer or other team official must comply with the Olympic Charter, including the conditions of eligibility established by the IOC, as well as the rules of the International Federation (IF) concerned as approved by the IOC, and the competitor, coach, trainer or other team official must be entered by his NOC." It is therefore, essential for every National Association (NA) to comply with the rules of the concerned IF. In India, Hockey India is the NA affiliated to FIH. In order to maintain its affiliation to FIH, and consequently for India to field its team in international events, it is necessary for Hockey India to comply with all rules and regulations of FIH. Failure to comply with FIH rules by any NA could result in consequences that include suspension or expulsion, thereby precluding India from participating in international events, including events such as the Olympics, Asian Games and Commonwealth Games. 8.2.2. Article 5.4 of the FIH Bye laws (as on 31.03.2011) provides for sanctioned and unsanctioned events. "Domestic Events" have been defined as events that do not involve national representative teams, ....
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....ors were Mr. Harbinder Singh and Mr. Dilip Tirkey, both former Olympians and two government observers. The entire selection process was video recorded as mandated by the Government. The list of 48 probables was released on 25.02.2012 and WSH started on 29.02.2012. Hence, the question of penalizing the players does not arise. 8.3.2. On a related issue of change of dates of the training camps with WSH, HI submitted that the training calendar for the Indian team was prepared and submitted to Sports Authority of India almost a year in advance, well before the announcement of WSH. The schedule for the preparation camp of the Olympic qualifiers was submitted to the Sports Authority of India in early 2011 and was approved by Ministry of Youth and Sports on 07.03.2011. The dates for the preparatory camp were recorded in these minutes as 15th December 2011 to 06th January 2012 and from 16th January 2012 till the Olympics qualifier. On DG's findings of refusal of sanction to WSH 8.4.1. HI submitted that no sanction was sought by the organizers of WSH from HI, and therefore HI had no occasion to refuse such a sanction. It was further submitted that HI is not a sanctioning authori....
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....ctives as sports governing bodies. Analysis of the Commission 9. The scope afforded for restricting competition in sports is a strong possibility when the 'power to sanction' an event and the 'organization 'of the event is vested with a single entity namely the designated National Association. The case pertains to the alleged imposition of restrictive conditions by Hockey India, the National Association for the sport of Hockey, on players in un-sanctioned prospective private professional leagues resulting in denial of entry (permission) to competing leagues. Duality of roles assigned or appropriated by the designated National Association also raises concerns about the possible violation of the Competition Act, 2002. 9.1. The character of sports has evolved over a period of time and the organization of sports events generates significant revenues. The commercial dimension of sports is enormous and according to a recent A.T. Kearney study of sports teams, leagues and Federations, today's global sports industry is worth between ?350 billion and ?450 billion ($480-$620 billion).This includes infrastructure construction, sporting goods, licensed products and....
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....of articles/papers on the aspect of significance of the pyramid structure for successful development of the sport, such as White Paper on Sport issued by EC and international jurisprudence. The Commission took note of most important merits of the pyramid structure which are: i) Pyramid structure helps to ensure that the special requirements of sports, such as uniform rules and a uniform timetable for competitions, are taken into account (Source: Opinion of Advocate-General in MOTOE case). ii) Pyramid structure is essential for organization of national championships and the selection of national athletes and national teams for international competitions. iii) Enforcement of rules that ensure proper organization and prioritisation of international competition as the international competition is recognized to be an essential and valuable feature of sport. (Source: Case 36/74 Walrave and Koch [1974] ECR 1405). iv) Enforcement of rules that protect integrity of the sport and maintain public confidence. What are the potential competition concerns that arise because of pyramid structure? 9.4.3. The structure implies that the organizations responsi....
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....per on Sports issued by EC in Brussels dated 11.07.2007, which states: The Commission acknowledges the autonomy of sporting organizations and representative structures (such as leagues). Furthermore, it recognises that governance is mainly the responsibility of sports governing bodies and, to some extent, the Member States and social partners. Nonetheless, dialogue with sports organizations has brought a number of areas to the Commission's attention, which are addressed below. The Commission considers that most challenges can be addressed through self-regulation respectful of good governance principles, provided that EU law is respected, and is ready to play a facilitating role or take action if necessary. 9.5.3. In context of this case, while the Commission appreciates the relevance and requirement of pyramid structure with the consequence of one National Association per sport, per Member State, it is the duty of the Commission that their functioning and activities must not violate the objectives of the Act. The Commission affirms the right of self-regulation of sports bodies with regard to issues, which are purely sporting, such as selection of teams, formulation ....
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....examined the issue of jurisdiction. The jurisdiction of Competition Authorities has been challenged in some cases in other jurisdiction by sports federations; and in the given case, HI and FIH have also disputed the jurisdiction of the Commission. The issues related to jurisdiction are examined below. What is the scope of jurisdiction of the Act over sports federations? 9.7.1. The Commission considered it appropriate to examine the issue of jurisdiction in detail and considered the international jurisprudence and literature on sports sector to draw relevant broad principles, and also the provisions of the Competition Act. The general arguments of the opposite parties have centred on their non-profit institutional form and their so called non-economic activities. The pleas of sports federations not being subject to Competition laws, given their non-profit form was observed in a case against ELPA (Source-MotosykletistikiOmospondiaEllados NPID (MOTOE) v. Elliniko Dimosio, Case No. C-49/07, THE COURT (Grand Chamber)) (the authority participating in authorisation by a public body of motor cycling events and also responsible for organising motor sports competitions in Greece). It w....
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....ty (Case 36/74 Walrave and Koch [1974] ECR 1405, paragraph 4, and Case C-415/93 Bosman [1995] ECR I-4921, paragraph 73) including those governing competition law (see, to that effect, Case C-519/04 P Meca-Medina and Majcen v. Commission [2006] ECR I-6991, paragraphs 22 and 28)... "[Source C-49/07, REFERENCE ibid.) 9.7.3. The White Paper released by EC on Sports note that post Meca Medina judgment, National sports associations and International Sports Associations may be both undertakings under Articles 81 and 82 EC and associations of undertakings under Article 81 EC. Sports associations are undertakings where they themselves carry out economic activity, e.g., by commercially exploiting a sport event. Sports associations are associations of undertakings under Article 81 EC to the extent they constitute groupings of sport clubs/teams or athletes for which the practice of sport constitutes an economic activity. 9.7.4. The Commission also considered this issue in deciding on the BCCI case, (In Re BCCI Case No. 61/2010). The Commission noted that the Act focuses on the functional aspects of an entity rather than institutional aspects. The scope of the definition on the institutio....
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.... the Commission is of the view that governing activities cannot be a part of market definition, but governing powers can be a source of dominance. Secondly, on the aspect of limiting the market to international and/or domestic events, the Commission considered the related definitions and Bye laws of FIH. As per FIH Bye laws, a domestic event is defined as, "any event that does not involve National Representative Teams." 9.8.2. An International Event is defined as, "an event in which National Representative Teams compete. It includes (without limitation) events staged as part of a multi-sport event such as the Olympic Games." FIH Bye laws in relation to sanctioning of events, provide. Where a proposed Domestic Event would be open only to teams in membership of or affiliated to one National Association, and would be staged entirely within that National Association's territory, then in order for that event to be recognised as a Sanctioned Event it must be organised or sanctioned by that National Association. Where a proposed Domestic Event would be open to more than one National Association's teams and/or Athletes, and/or would be staged by one National Association in....
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....For example, a sports Federation may be a seller of various rights such as media rights, sponsorship rights, and franchise rights associated with each event and correspondingly there would be a separate set of consumers for such rights. Similarly, the ultimate viewers of sports event are consumers of the final product that is a sports event. Also, a sports Federation requires services of players, officials etc. for staging an event which makes sports Federations themselves as consumers. In this multitude of relationships, defining the relevant consumer a priori would enable defining the relevant market. 9.8.8. In the instant case, there are two issues at broader level, the first relates to alleged practices of FIH/HI to foreclose the market for rival leagues by bringing in regulations related to sanctioned and unsanctioned events; the second relates to restrictive conditions imposed by HI on players through the CoC agreement. The allegations of foreclosure of rival leagues, grant of media rights and imposing restrictive conditions on movement of players form the crux of almost all the major antitrust inquiries in the sports sector. In order to properly evaluate the competition c....
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....s. The plaintiff maintained that under Dutch Law this amounted to an illegal price fixing agreement. This view was upheld by the court. The court held that the relevant product market was 'the market for (Dutch) football broadcasting rights: 9.8.13. On the aspect of the intended use, it may be argued that the basic objective of end consumer is entertainment and which would mean and imply that a consumer would consider different entertainment forms as substitutes and therefore a case for broadening the market. The Commission also considered the substitutability of cricket with other entertainment forms in the BCCI case, but is of the opinion that the issue is of more relevance in examination of cases where allegations have an impact on media and broadcasting industry. For a live viewer of the sport, the entertainment from sport may not be regarded as substitutable with other general entertainment forms. 9.8.14. As regards the price factor or defining the relevant market, Considering the basic test of non-transitory relative price rise of 5% to 10% also known as SNNIP test and in considering consumer behaviour towards sport, it is unlikely and difficult to believe that a co....
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....r than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use. 9.8.19. The Commission notes that in this case, HI is hiring the services of Hockey players where the monetary consideration is in the form of match fees etc. which implies that HI is the consumer in this market. The arguments cited by DG and informants based on treatment of hockey players as consumers on the aspects of demand and supply side substitutability with HI being the consumer are valid in so far as delineating the relevant market "market for services of hockey players" 9.8.20. The definition of the informant and the DG pertain to Relevant Market which is significant for analysis of abuse of dominance vis a vis rival leagues only and as such fails to bring out the criticality of arguments which hinge on labour restrictions. More importantly, the governance aspect emphasized by DG and informant as a source of dominance cannot be p....
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....ty is secured between the various economic operators. To entrust a legal person such as ELPA, the National Association for Motorcycling in Greece, which itself organizes and commercially exploits motorcycling events, the task of giving the competent administration its consent to applications for authorization to organize such events, is tantamount de facto to conferring upon it the power to designate the persons authorized to organize those events and to set the conditions in which those events are organized, thereby placing that entity at an obvious advantage over its competitors. Such a right may therefore lead the undertaking which possesses it to deny other operators access to the relevant market... [Source C-49/07, REFERENCE for a preliminary ruling under Article 234 EC, from the Diikitiko Efetio Athinon (Greece), made by decision of 21 November 2006, received at the Court on 5 February 2007, in the proceedings, MotosykletistikiOmospondiaEllados NPID (MOTOE) v. EllinikoDimosio, THE COURT (Grand Chamber)] 9.9.5. The Commission having due regard to the factors mentioned above and the decision in case of BCCI and of Grand Chamber of ECJ in ELPA case concludes that HI ....
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....ess to rivals, in contravention of Section 4(2)(c) of the Act. (ii) HI is using its dominance in conducting international events in India to enter into the market of conducting a domestic event in India, in contravention of Section 4(2)(e) of the Act. (iii) The CoC Agreement entered by HI with Players is an exclusive supply agreement and the restrictive conditions included thereunder, constitute a violation of Section 3(4) of the Act. 9.10.1. The DG in his report noted that the conditions relating to sanctioned and unsanctioned events were introduced by FIH and implemented in India by HI as an afterthought to the announcement of WSH. DG also pointed out to the actions of HI and FIH issuing warning letters to players from participation in WSH and non-selection of players who played in WSH in the Indian Hockey Team which went to London and Malaysia. According to DG, the restrictions imposed by HI resulted in foreclosure of market for any other enterprise to organize hockey tournaments in contravention of Section 4(2)(a)(i) and Section 4(2)(c) of the Act. 9.10.2. DG further noted the changes made in conditions of CoC Agreement relating to disciplinary action ag....
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....oned and unsanctioned events. Intent and manner of application of regulations 9.11.1. The Commission examined in depth the findings of DG that the manner of application and the timing of these regulations as indicative of abuse of dominance, and is of the opinion that intent/rationale behind introduction of the guidelines as submitted by FIH relating to sanctioned and unsanctioned events needs to be appreciated before arriving at any conclusions. Factors such as ensuring primacy of national representative competition, deter free riding on the investments by national associations, maintaining the calendar of activities in a cohesive manner not cutting across the interests of participating members, preserving the integrity of the sport, etc. are inherent to the orderly development of the sport, which is the prime objective of the sports associations. Moving further, on the proportionality aspect, the Commission opines that proportionality of the regulations can only be decided by considering the manner in which regulations are applied. 9.11.2. It is the manner of applying regulations that raise competition concerns as it may be used as a tool for foreclosing new entrants. Th....
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....hought to WSH' finding by DG. DG considered a letter from FIH dated 04th May 2012 in which according to DG, the FIH had recommended that any person who had participated in the WSH be deemed to have forfeited his eligibility to participate in international events for a minimum of 12 months. The Commission notes that DG did not consider the full contents of the paragraph, which clearly provided that this statement was in context of those players/officials who had committed to play for WSH after the regulations related to unsanctioned events came in force. This implies that FIH was not advocating disciplinary action on those players/officials who entered into binding agreements with WSH before the regulations of FIH were notified. 9.11.7. Thirdly, based on the reply from Ministry of Youth and Sports Affair (MoYAS) on the selection of probables for the Indian team, DG had concluded that none of those players, who participated in the WSH series were included in the 48 core probable and subsequent tours to London and Malaysia. The Commission considered HI's submissions that, the reason behind the players not being selected was their non-participation in training camp, which ot....
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....hip arise if one of the agent on account of its' market power is able to impose unreasonable restraints on the other, that are likely to cause an appreciable adverse effect on competition. In context of this case, HI is the buyer of services of hockey players for the production/organization of any hockey event. This relationship between HI and the players is, hence, tantamount to a vertical relationship where HI and the players are at different stages of the production chain. The standards applied to test the effect of vertical restraints on competition have already been spelt out in the Commission's Order in case no. 24 of 2011, Sonam Sharma vs. Apple Inc. and Ors. 9.12.3. There the Commission held that for concluding that a vertical agreement has caused an appreciable adverse effect on competition, the person imposing the vertical restriction should be in a dominant position and the intent behind the restriction should be foreclosure, without any obvious efficiency justifications. 9.12.4. Given, that the allegations in respect of violation of section 3(4) and 4(2)(c) are arising from the same instrument i.e. CoC agreement, the Commission considers it appropriate to ....
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.... there is an instance of disproportionate bans being imposed on players for small breaches. 9.12.6. The Commission is of the opinion that these restrictive conditions are inherent and proportionate to the objectives of HI and cannot be fouled on per se basis till there is any instance where these are applied in a disproportionate manner, for which there is no evidence at present. The Commission concludes that allegations of violation of Section 3(4) and 4(2)(c) cannot be substantiated. 9.13. After evaluation of the primary issues which were the core of the case, the Commission also considers the findings of DG on the aspect of adoption of FIH bye laws by HI being in contravention of Section 3(3)(b) of the Act. Whether there is any contravention of Section 3(3)(b) of the Act? 9.13.1. The Commission notes and agrees with the submissions of HI on the aspect of hierarchy, and not being entitled to vote at the time of adoption of resolution. Accordingly, the Commission concludes that adoption of Bye laws does not amount to a horizontal agreement in contravention of Section 3(3)(b) of the Act. Order The Commission after considering all the aspects relating to the case c....
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....on Act. Notwithstanding the fact that the Commission did not find a violation of Section 3 or 4 of the Act, it took note of the responsibility enjoined on the Commission by the Preamble and Section 18 of the Act, inter alia requiring, 'to promote and sustain competition and protect the interests of consumers'. The Commission, therefore, felt that it would be appropriate if HI were to put in place an effective internal control system to its own satisfaction, in good faith and after due diligence, to ensure that its regulatory powers are not used in any way in the process of considering and deciding on any matters relating to its commercial activities; and also set up a streamlined fair and transparent system of issuing NOCs to the players for participating in events organized by foreign teams/clubs. In view of the discussion above and the structure of the opposite party being akin to BCCI, having dual role of regulator as well as organizer; the possibility of transgression of the lines shall always remain there. The Commission is alive to this fact and as and when any new facts come to its notice, the Commission shall consider them in the light of responsibilities enjo....
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....nd women's hockey more or less were run separately and the administration of hockey remained as it was before the formation of IHC. FIH was aware of it and after the sting operation FIH decided that hockey should be run by another association. FIH therefore helped the formation of Hockey India which was to be the body to run hockey in India. HI was registered in 2009. It was recognised by the Sports Ministry as well as the Indian Olympic Association. IHF as well as HI have as their affiliates different state associations in India. Thus, hockey like sports is regulated from the grassroots level to international level. In hockey between the national federations and FIH, there are also continental federations. In the year 2010, IHF challenged the jurisdiction of FIH and HI in the Delhi High Court. On the other hand around the same time Ministry of Sports derecognised HI and recognised IHF. The Delhi High Court in its judgment held IHF to be the correct body to administer sports of hockey in India. Further against its derecognition by the Sports Ministry HI filed a writ in the Supreme Court. Both the writ and the SLP filed in the Supreme Court are pending disposal by the apex court....
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....governance structure is mandatory under the Olympic movement and that it was also necessary for the promotion and protection of sports. The reasons for having sanctioned/unsanctioned events have been stated to be (i) uniform application of rules protecting the sport and stakeholders (ii) to hold all participants accountable under the rules (iii) enforcing anti doping rules (iv) enforcing other rules for the benefit of the participants (v) to prevent the integrity of sports in a fair and transparent manner (vi) to organise and conduct the sporting calendar in order to promote sports (vii) further to ensure that the national bodies have their best players available for national duty and that the national bodies were in a position to have players for a preparatory period for international events (viii) players were required to give precedence to national competitions over other events. 17. Regarding unsanctioned events, the bye laws state that they are not developed as an integrated and coordinated part of the sporting calendar and that they may cut across the sporting calendar. The unsanctioned events are stated to undermine the primacy of the national hockey sports body and are n....
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....for sanctioning a particular event has been laid down in the byelaws. It has also been stated that the sanction of the domestic events would be open only to the teams affiliated to the national association and it had to be staged entirely within the national association's territory. The event had to be organised or sanctioned by a national association i.e. in the case of India, Hockey India. If the participants in the domestic event are from other countries then the participants had to take permission of the Continental Federation or the national association of the country where the person resides. It has been stated in the byelaws that they are to be followed by all the national associations or they can be penalised. 21. The informants have submitted a copy of the letter of FIH dated 1st June, 2011. In the said letter it is stated that FIH and Hockey India are in the process of organising a professional hockey league in India in 2013. It has also been stated in the said letter that a World Series Hockey was being organised by a private promoter namely Nimbus Sports in collaboration with the Indian Hockey Federation which was not a member of recognised by FIH. It was also st....
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.... the fundamental principle of autonomy of sports movement in accordance with the Olympic Charter. Incidentally in this letter, FIH has mentioned the facts which are mentioned as the objects of the byelaws. It has also been mentioned that unsanctioned events were not subject to the jurisdiction of International Federation and its national members. In a sense by this letter dated 8th February, 2011, the World Series Hockey was an unsanctioned event even though till 11th March, 2011 there was no mention of unsanctioned events in the byelaws of FIH. It is therefore clear that in February 2011 FIH had decided not to approve the World Series Hockey though the byelaws were framed subsequently. Information providers also submitted a copy of FIH statutes. 24. In the backdrop of the material submitted, the information providers stated that Hockey India and FIH wanted to suppress competition for other organisers of hockey in India including WSH and that they were using their monopoly of conducting international events in India to ensure that hockey players were forced to participate in the league that it planned to conduct in 2013. The complaint was submitted before the start of the WSH ho....
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....equired by the service provider from international sporting associations like IOC, FIH etc. It was stated that the market for international hockey and domestic hockey are different markets and are not interchangeable. Reliance was also placed on the decision in Europe in the case of professional snooker tournaments i.e. Hendry v. The World Professional Billiards & Snooker Association Ltd. (WPBSA), [2001 EWCA Civ 1127]. It was stated that a player was dependent on the tournament organizers because without tournaments a player would have no opportunity to show his skills for profit. It was again stated that the players who constituted consumers do not consider domestic activities in sports as interchangeable and substitutable international sport activities. As far as the geographical market was concerned it was argued that it was a pan India market. 27. It was argued that in the market for conducting of hockey activities the players were consumers. Hockey activities also decide the remuneration of the players as well as the expenditure involved on the training and equipments for the training of players. It was stated that different countries would constitute different relevant geo....
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.... could be taken against a player who participated in an unsanctioned event. If a player has been selected for the national team but if he participates in an unsanctioned event, he can then be disqualified from the national team. It was stated that HI was the only body in India to sanction domestic events in India. According to FIH's guidelines the factors required to be examined before sanctioning a tournament are (i) capacity of an organizer to make a binding, unqualified, unconditional and legally enforceable commitment to stage a particular event (ii) the maintenance and promotion of health (iii) safety and welfare of players (iv) prevention of calendar clashes with existing events and (v) a meaningful role in the in the promotion and development of the sport. It was thus stated that the COC agreement was an exclusive supply agreement for playing hockey by both men and women in India. 30. It has also been mentioned in the complaint that each COC agreement causes AAEC in India in violation of section 3(4) of the Competition Act. To strengthen the arguments the informants have led stress on the conditions laid down in section 19(3) of the Competition Act. It was stated that....
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....o be held in 2013. The information providers further stated that the non-sanctioning of the event would result in big losses for the sponsors, members, sports fraternity as well as other persons. It was therefore stated that the impact of the COC agreement would be felt in all kinds of hockey activities such as organization, sponsorship, broadcasting etc. Thus the COC agreement implemented by HI would result in driving the existing competitors out of the market for conducting hockey activities in India. 33. It was also argued that as a result of the restrictions imposed under the COC agreement if a hockey player played in unsanctioned events he was likely to suffer severe disciplinary actions including being barred from representing the Indian team in any international event. It was stated that in economic terms imposing restrictions on players would cause severe adverse affects in the market for providing hockey playing services. By the COC agreement HI had denied the following benefits for players (i) important source of remuneration (ii) important source of additional support for players (iii) important source of practice and training and (iv) development of infrastructure su....
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.... constitute the demand-side in the service market for conducting and governing all international hockey events in India. It was stated that hockey players could not force any countervailing pressure on the service providers i.e. HI because they were totally dependent on HI. It was stated that playing hockey constitutes an economic activity and that playing professional hockey at national level was the only source of livelihood for many players. It was therefore stated that without being selected for the national team or without obtaining permission to play hockey events, a hockey player would have no opportunity to exercise his skills for profit as well as pride. In this connection reliance was placed on the decision in the Snooker Case (supra). 37. It was then argued that HI was abusing its dominant position in the market of regulating international hockey activities for men and women in India and that this abuse was hit by the provisions of Section 4(2)(e) of the Competition Act. Section 4(2)(e) is applicable only if an enterprise is dominant in one market and tries to enter into, or protect, other relevant markets. It was argued that international hockey activities in India w....
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....recloses the market or defers entry of new players in the market then it would constitute a denial of market access and would fall foul of the provisions of the Competition Act. It was further argued that HI had regulatory powers which allowed it to sanction or not sanction hockey tournaments in India. HI also had powers to take disciplinary action against players and officials who participated in unsanctioned events. It was again stated that HI had not sanctioned WSH in order to secure a market for a league which it proposed to launch in 2013. It was stated that by sanctioning tournaments in order to protect its rights, HI made it virtually impossible for competing tournament organisers to stage an event. Such action by HI also denied many hockey players to participate and show their skills. They acted as a barrier for the entry of many players in the field of hockey. The informants have stated that this had foreclosed the market for the conduct of domestic hockey tournaments in India. In this manner market access was not allowed to (i) Indian hockey players for not competing in other tournaments (ii) for other tournament organisers for conducting world class hockey tournaments an....
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....herefore argued that by not sanctioning WSH, HI made the organization of tournaments not commercially viable and it also made hockey players and officials lose money. HI by creating restrictions has not allowed participation of players in domestic tournaments organised by other organisers. It was stated that such tournaments gave a platform to the players to show their skills. Participation in such tournaments would bring more players in the field of hockey and would lead to competitiveness in sports. It is the ultimate aim of hockey players to don the national colours in the international arena. But by introducing the concept of sanctioned/unsanctioned events, HI had barred players from participating in such tournaments. 41. The information providers have stated that with the economic development in India, sports industry was growing fast and having larger exposure to broadcast media, television and internet. Hockey is the national sports of India but there has not been much investment in hockey especially in training, infrastructure and equipments. It was stated that HI would be causing a loss to the promotion and development of sports in the country. If such anticompetitive p....
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....t least 90 days notice, this is duly published; and (v) Any other order that the CCI may consider necessary in the present case. B. Relief sought: (i) The information Providers further request this Hon'ble Commission to pass the following orders under Section 27 of the Competition Act: (ii) Direct that the COC Agreement be modified to the extent that it is in contravention of Section 3(1) read with Section 3(4) of the Competition Act; (iii) Direct that HI discontinue their practice of abusing their dominant position in the market for 'governing and conducting international hockey events in India' in contravention of Section 4(1) read with Section 4(2)(c) and (e) of the competition Act, by engaging in conduct which includes: a. Warning hockey players with non-selection into the Indian national team if they participate in the WSH and/or if they sign the Players Contract; b. Warning hockey players with disciplinary action if they participate in the WSH and/or if they sign the Players Contract; (iv) Direct HI and FIH acting through HI to public a scheduled calendar of international events including training i....
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....e WSH. HI was not aware that it was going to organize a league in 2013. HI also stated that the system of sanctioned and unsanctioned events existed in various sports such as cricket, soccer and rugby. 49. On the other hand, FIH's representative stated that FIH does not fall within the jurisdiction of CCI and that CCI cannot compel FIH to submit information. FIH also stated that FIH was not an enterprise under the Competition Act. It was stated that FIH was a non-governmental, not for profit organization recognized by IOC as the sole international federation of hockey. It was stated that HI and FIH were performing public functions for public good so that hockey as sports could flourish all over the world. FIH was stated to be not a commercial body and its activities were not economic. For this proposition reliance was placed on the decision of the Supreme Court in the case of Cricket Association of Bengal 2 SCC 161. 50. The representative of FIH also argued that as the Indian Competition Law was based on European Competition Law and therefore the guidelines laid down by the European Commission would apply. In this connection, reliance was placed on 2007 White Paper of EC ....
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....e. It was stated that rules requiring participants not to play in unsanctioned event was inherent and indispensable to the proper organisation and conduct of competitive sports. But the reason for this statement was not submitted. 53. It was argued that FIH was not a commercial enterprise and generates no profit from its activities. Its job was the development of sports which was in public interest. The money which sports of hockey generated was used to improve infrastructure and develop hockey. In order to develop sports, FIH granted priorities to international events giving national associations full access to their players and complete freedom for national representative competition. 54. Speaking again of the pyramid structure it was stated that such a structure was necessary for the uniform application of rules and comparable playing conditions. It was stated that having a system of sanctioned and non sanctioned events was necessary for the objectives of the game. It was stated that the concept of sanctioned/unsanctioned event arose from the concept of pyramid structure. It was stated that a governing body would be simply unable to exercise authority and oversight over th....
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....icular case the English High Court held that the game should be properly organised and administered. The High Court approved the prospective disqualification of the cricket players who would thereafter contract to play with World Series Cricket or other unapproved private promoters. It was therefore stated that the system of sanctioned/unsanctioned events have been borrowed from the field of cricket. 58. Regarding the reliance of the IPs on the case of Hendry (Supra) it was stated that it was not a proper precedent. It was therefore argued that it would be proper for a sport governing body to restrict player freedom to play in unsanctioned events. It was stated that it was necessary to protect an investment in the training of players, to protect the commercial terms which financed that investment and to ensure that those revenues were distributed in a manner that benefited not only professional players but sports as a whole. Reliance was also placed on another decision rendered by the High Court in England, the case Hall vs. English Cricket Board. It was stated that in this case the High Court held that for a country player playing for Indian Cricket League in India was detrimen....
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....r the players to sign the Code of Conduct and if any player failed to sign the Code of Conduct, would it result in disciplinary action from HI. FIH stated that the regulation on this aspect was mentioned in Article D1 of the regulations. It was left to the national association to implement the mandate of the regulation. Regarding running of a league in India it was stated that FIH and HI had been discussing running a professional league of hockey in India. Ultimately HI and FIH agreed to start a professional hockey league in partnership w.e.f. January 2013. All the players who would play would have to meet the regulatory requirements for playing in the league. FIH also stated that Hockey India was taking permission for organizing various events in India. 62. The DG also examined Indian Hockey Federation (IHF). It was stated on behalf of IHF that it was original national association which was running hockey in India and that various associations and institutions were affiliated with it. It was stated that in 2008 FIH disaffiliated IHF though IHF was still recognised by IOA. It was stated that the domestic tournaments were sanctioned by IHF whereas the international tournaments we....
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.... the Act. f) Whether the OP has violated provisions of Section 3(4) of the Act. g) Whether the decision of FIH and HI attracts provisions of Section 3 of the Act. 66. Regarding the issue as to whether HI and FIH were enterprises under the Competition Act, the DG held that the activities carried out by HI as well as FIH in respect of grant of franchise rights, media rights, TV rights, sponsorship rights and various other rights yielded revenue which are different from a charitable non-profit activity because the revenues were in the commercial field. Further HI and FIH fall within the meaning of person defined under section 2(l) of the Act. Thus the economic activities carried out by HI and FIH bring it within the ambit of the definition of enterprise as defined in the Act. To further support his findings the DG relied on the decision of the Delhi High Court in the case of Hemant Sharma & Ors. vs. Union of India & Ors. Therefore the DG held that both HI and FIH were enterprises. As far as FIH is concerned it was a society registered outside India but it was a person under the Competition Act and the DG held that in view of the provisions of Section 32 of the Com....
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....e DG held that FIH also had a monopoly power at international level for the promotion of hockey worldwide. 69. The DG then examined whether HI could create barriers to entry to other participants. In his view as HI was the sole regulator of hockey in India and as hockey required high investment, it constituted a significant barrier to entry. Further as HI was a member of FIH and was recognized by FIH and as the FIH did not recognise the claim of any other body to govern hockey in India, according to the DG, HI was in a position to create barriers of entry to other players. 70. The DG then took up the issue of market structure for the pyramid structure of sports and because FIH had granted recognition to HI. Thus HI was in a position to make itself a dominant player in the field of hockey mainly because of the pyramidical structure. 71. The DG then took up the role of FIH. According to the materials available with the DG, FIH was a non-profit association in Switzerland and its main aim was to encourage, promote and develop and control hockey at all levels throughout the world. In accordance with Olympic Charter, as national governments did not have any role to play in the r....
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....India was required to sort out the disputes between HI and IHF so that only one national body existed to run hockey in India. 73. A settlement was arrived between the Secretary General of HI who had no objection to the organisation of the WSH tournament by IHF. But FIH rejected the Sports Ministry brokered peace agreement between Hockey India and Indian Hockey Federation (IHF). A media report states that FIH threatened the Indian government that the Indian team would not be able to participate in the Olympics if the agreement between HI and IHF was implemented. The objections of FIH were that there should be no agreement between HI and IHF and Government of India should recognise Hockey India and allow it exclusive authority to govern men's and women's hockey in India in respect of both national and international competitions. FIH also dictated to the Indian Government that it should not fund or support any hockey event which was not sanctioned by FIH or Hockey India. It also wanted the Government for the withdrawal of all the lawsuits and ensure HI was the only national body to run hockey in India. 74. Though in July 2011 the Secretary General of Hockey India had no ....
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.... reports that the WSH series tournament was a popular tournament and 150 hockey players were inclined to join the same. Even the hockey players and technical staff were eager to join the league as they would make some money. Further the hockey nations did not have a system of annual contracts and for this reason the career of hockey players was never secure. For this reason the WSH league gave a hope not only to the officials but also to the players of hockey for earning money. 76. The DG did not accept the claim of FIH that it was trying to popularise hockey world over and especially Indian hockey. Further he observed that the hockey fans were deprived of regular competitive hockey tournaments. Therefore in the opinion of the DG, FIH and Hockey India restricted the development of hockey by not allowing a league like WSH. He found that efforts were made by FIH and Hockey India to stall the league. This was done by not allowing the players to participate in the WSH league. The DG also found that in other sports like football or cricket players from different countries participate in the domestic leagues organised at national level but in the case of WSH league, FIH did not permit....
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....wn league after the launch of the WSH series. In view of the DG this amounted to foreclosing the market for others and controlling the market for itself. According to the DG this amounted to a contravention of Section 4(2)(c) of the Act. 79. The DG then examined Article D.1 of the FIH regulation. (i) Not participate in any way in any unsanctioned event. (ii) Prohibit the participation by organization, athletes, technical official, umpires, coaching or management staff, and other individuals under its jurisdiction in any unsanctioned events. (iii) Take disciplinary action against any organization, athletes, technical official, umpires, coaching or management staff, and other individuals under its jurisdiction who fails to comply with the prohibition, (iv) Recognized and give effect within its own jurisdiction to any restriction, exclusion or ineligibility imposed on an organization or individual by another national association for failure to comply with that prohibition, and (v) Make it a condition of eligibility to participate in events played under its jurisdiction that the organization or individual in question has not participate i....
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....ase of hockey in India. The DG therefore concluded that HI had a contravened sections 4(2)(a)(i) and 4(2)(c) of the Competition Act. 80. The DG found that not only the hockey players were denied an opportunity to compete but was also denied the opportunity to make a career out of sports. This action of HI and FIH led to a denial of market access to hockey players. According to the DG that by making it virtually impossible for competing organizers, sponsors and broadcasters, it amounted to a foreclosure of market for them. Thus in the opinion of the DG this also constituted a denial of market access under Section 4(2)(c) of the Competition Act. 81. The DG then placed reliance on a decision of the European Competition Commission. In this case the issue was of FIA Formula One World Championship. In the Commission press release IP/99/434 dated 30.06.1999 it was stated the Commission had ordered that there should be a complete separation of commercial and regulatory functions in relation to FIA Formula One World championship. Incidentally in this case also FIH and Hockey India being the regulators had a conflict of interest because they proposed to have their own league by banning....
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....hese Statutes may be amended added to or rescinded by a resolution of the Congress passed by a Special Majority. No such resolution shall be submitted to the Congress unless the prior notice prescribed by the Byelaws has been given to all NAs. Any modification of the Statutes must be proposed by a Member or by the Executive Board. The proposal must reach the CEO not later than three (3) months before the date fixed for the ordinary meeting of the Congress. In this case it appears that the amendment made by FIH regarding sanctioned and unsanctioned events were not done in accordance with the provisions of article 18 as it was done in haste to counter the forth coming WSH series only. The executive body comprises of the representatives of various national associations. Thus the FIH is basically the Association of different national associations/federations who are engaged in the activity of governing and controlling the sports of Hockey in their respective country. 85. The DG also examined the Olympic Charter and found that the Olympic Charter did not suggest that the control of the domestic league should be with the national association. According to the DG, FIH had assumed the r....
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....there was also violation of the Competition Act by Hockey India. 87. After the receipt of DG's report, the Commission took the view that though the information was only against the anticompetitive behaviour of Hockey India, to consider the anticompetitive behaviour in the field of hockey it was necessary to make FIH also a party. Therefore copies of DG's report were sent to Hockey India and FIH and their submissions were obtained. The Commission took oral hearings of HI, FIH and the informants. 88. On behalf of HI it was argued that HI was involved in purely sporting activity and therefore an economic law like the Competition Act does not apply to it. It was stated that HI operates through the international Olympic body (IOC). It was argued that FIH was recognised as the international body governing hockey world over and is recognised by the IOC under the pyramidical structure which exists in all sports. It was stated HI works within the regulations framed by FIH and that it was the only association which was recognised for hockey in India. Its main function was selecting teams for international events and selection of teams cannot fall within the ambit of competition....
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....ition analysis this fact needed to be examined. 90. It was stated that the DG had not stated that the regulations were framed by FIH with unlawful objectives. The restrictions in the regulation were with the object of the achievement of such objectives. It was argued that the objectives, as held by the DG, were for the purpose of promoting HI's economic interests by finishing off all competition for HI's league. It was stated that this finding was erroneous as the regulations were not framed for the purpose of HI's league but for proper running of sports. It was stated that just because regulations impinge on player's freedom it does not mean that they violated competition law. It was stated that a regulation would fall foul of the competition law if it was for illegitimate purposes or were not proportionate to the pursuit of the objectives. To support this proposition reliance was placed on the decision of the European Court of Justice in the Mecca Medina case (supra). It was stated that the European Court had accepted that restrictions on athletes were necessary in the regulations for sporting events. It was stated agreements and decisions taken which restrict ....
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....ns did not have the exclusive right to hold sports events. It was stated that in such a case the integrity of sports may be compromised as the national associations did not have the right to oversee the tournaments. It was therefore the view of FIH that in order to maintain the integrity of sports, it was necessary that a player should play only in sanctioned events. It was therefore stated that for these reasons players were not allowed to play in unsanctioned events. 94. The arguments regarding WSH being a private entrepreneur and free riding were again advanced. It was also argued that players reached the elite class because of the investments made on them by FIH and the national associations and therefore players owe something to sports in turn. It was stated that no player/athlete could participate in sanctioned tournaments if he had played in unsanctioned events. It was also stated that no competition regulator had held the regulations framed by FIH to be anticompetitive. It was also argued that IHF had exactly the same rules in its agreements with the players. In the said agreements IHF had contended that during the course of the agreement, the players would not participa....
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....ban on WSH league was imposed and therefore the provisions of Section 3(3) of the Act were not attracted. It was argued on behalf of FIH that FIH regulated only those athletes who submitted themselves to the regulations adopted by FIH. It was also stated that FIH had not prevented any player from joining the WSH league. 100. It was further argued that there was no material with the DG to conclude that the regulations dated 11.03.2011 was brought about with the idea of preventing WSH from running its league. It was argued that it was only a presumption and that there was no material with the DG to come to such a conclusion. It was stated that the regulations were made with the intention of the preservation of the sanctity of the game of hockey. It was further stated that the regulations did not have retrospective applications and they were to apply to events happening after 31st March 2011. It was conceded that the regulations applied to both sanctioned and unsanctioned events as far as the restrictions were concerned. It was also argued that events were organised in one country with the sanction of the said national association. It was stated that FIH wanted the organisers to wo....
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....er the player or official in issue committed to participate in the 'World Series Event' before or after the date on which the national association's regulations implementing the FIH Regulations came into force. (That date should be 31 March 2011-see Article A.4 of the FIH Regulations-but some associations may have implemented the FIH Regulations after that date). If the player's/official's commitment to the 'World Series Hockey' event was made before the date the member's regulations implementing the FIH Regulations came into force, then no action should be taken against the player or official under those regulations. (Instead, the member should determine whether any action can be taken against him under any other regulations that it did have in effect at the time). It was stated that if a player participated in WSH league he was ineligible to represent his country in international events but was eligible to play in domestic events. It was argued that no action was taken against any player who participated in WSH and but had signed the contract with WSH prior to 31.03.2011. 104. It was also argued that the DG had erred in his analysis by not co....
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.... hockey players from participating in any tournament not sanctioned by it or the FIH. It was stated that such a condition had a significant impact on the sport of hockey at the domestic level and it also tinkers with the freedom of trade and right to earn a living. It was stated that the HI had issued a statement debarring players from representing the Indian national team if they played in the WSH league. It was therefore stated that HI which was operating at international level and had full control of the domestic hockey which falls in the ambit of IHF. HI therefore interferes with the smooth functioning of the sport of hockey at the domestic level in India. 107. Regarding the underlying economic activities to the definition of the relevant market by the DG it was stated that the commercial activities involved in this sport of hockey had been appreciated by the DG and that it forms an indispensable part of any sporting activity including but not limited to hockey. 108. Regarding the application of Section 3(4) of the Act it was held by the DG that as no commercial relationship existed between HI and the players, Section 3(4) was not applicable to the facts of the case. The ....
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....rther stated that under the COC agreements the power to ban players from international tournaments arose if players participated in unsanctioned events. It was submitted that such restrictions were contrary to Olympic Charter, unreasonable, arbitrary and interfere with the right to earn a living. It was stated therefore that the COC agreements were an exclusive supply agreement and that they were of vertical nature. The COC agreements created barriers to entry of new players. This works in two manner i.e. it has the effect of imposing a blanket prohibition on players from participating in any unsanctioned event and secondly staging the tournament becomes commercially unviable since it becomes difficult for an adequate number of players to participate as multiple levels of permissions were required even for the domestic tournament. It was further stated that this COC agreements drive existing competitors out of the market. It was again stated that the hockey league organised by FIH and HI proposed to wipe out the existing competition. It was stated that HI had not provided any valid reason for not sanctioning the league of WSH in India. It was also argued that the whole system of sa....
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....of this COC agreement prevent players from participating in any unsanctioned event. In economic terms imposing restrictions on players who participated in unsanctioned events cause severe adverse effects in the area of hockey playing services. By having a system of sanctioned tournaments the following benefits were denied to the hockey players. * Important source of remuneration * Important source of additional support for players * Important source of practice and training by training with world class coaches and playing alongside the best players in the world * Development of infrastructure It was also stated that lesser participation by players thus reduced competition in sports. To support their contentions reliance was placed on the decision of the Australian Commission the case of Ice Hockey (supra). 113. Regarding the finding of the DG that FIH and HI had entered into an agreement in violation of Section 3(3)(b) of the Act, it was stated that the findings of the DG were correct. Similarly restriction imposed on the technical staff by FIH was also stated to be anti-competitive. It was stated that the draconian rules and regulations fr....
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....ockey League was organized in India during the period 2005 to 2008. This tournament was organised by ESPN in collaboration with IHF and that no permission from FIH was sought. It was argued that HI with the active support of FIH had abused its dominant position in the relevant market in India and gained the control of the entire sports in India. It was argued that the actions of HI in targeting a player who played in the WSH for selection in the national team substantiates the allegations of the information providers. It was stated that FIH had claimed that the regulations were only recommended to the national associations was not established by facts. It was stated that as HI was dominant in international hockey activities, it used this dominance to obtain dominance in the field of domestic hockey activities in India and for this reason the provisions of Section 4(2)(e) were applicable. This was done in order to ensure that the league promoted by FIH and HI was successful from the commercial angle. It was argued that HI was using its powers with the object of promoting its league in collaboration with FIH. It was therefore stated that the action of HI was totally abusive. 115. ....
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....aws have already been discussed above and there is no need to discuss them again. Under clause 4.5 of the byelaws it has been mentioned that the interests of the commercial partners of FIH, continental federations and national associations have to be protected. In fact these commercial partners may require assurances that competing events would neither be organised nor sanctioned without their approval. It has been stated that this was necessary for the generation of commercial income for the development of the sport. In the byelaws, it has also been mentioned that the national associations shall act in accordance with the obligation as custodian of sport and shall comply with all applicable laws relating to proper exercise of the regulatory powers by a sports governing body. Procedure has been laid down in the byelaws for the issue of a no objection certificate. If the national association has taken a stand on some issue then FIH could overrule the national association. The byelaws also prescribe that the national associations should not participate in any unsanctioned event and it should also prohibit participation by organisations athletes, technical officials, umpires, coaching....
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....nt public or private organisations and authorities. The Olympic movement also opposes any political or commercial abuse of sport and athletes. The Olympic movement also encourages and supports the efforts of sports organisations and public authorities to provide for the social and professional future of athletes along with the encouragement and support to the development of sport and the promotion of environmental issues. It has also been mentioned in the charter that international federations within the Olympic movement should be in conformity with the Olympic Charter including the implementation of the anti-doping code. The Charter gives a duty to the International Federation for the development of sports throughout the world and to provide technical assistance in the implementation of Olympic Solidarity program. There is also a concept of National Olympic Committees who could recognise only one national federation for each sport in their jurisdiction. Thus the Olympic Charter has laid down the guideline as to how the sports entities should run sports all over the world and how the interests of the athletes were to be protected. 119. It is also necessary to examine hockey as a....
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....on through a system of sanctioned/unsanctioned event. If a national association did not accept the byelaws of FIH they could be penalised or expelled from the FIH. 122. The idea of sanctioned/unsanctioned events for hockey were probably borrowed from cricket. The system of sanctioned/unsanctioned events was introduced in cricket by the International Cricket Committee after the Packer episode in the late 1970s. The Packer episode brought money for the players in the game of cricket. Subsequently, the Indian Premier League in India was started in India in 2008 and the league was a money spinner. The Board of Cricket Control of India had started the IPL but prior to IPL, TV broadcaster Zee Telefilms had started a similar league known as the Indian Cricket League. BCCI had seen to it that ICL as a league flopped so that its league IPL was a success. 123. In the sport of hockey, Nimbus another T.V. broadcaster with the blessings of IHF which is also a national association of hockey in India but not recognised by FIH thought of starting a league known as WSH. The announcement was made in December 2010. Nimbus signed 160 players for its league but found that many of the internationa....
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.... before the Commission where it stated that its actions were in accordance with the directions of FIH. Thus it is the behaviour of FIH which requires scrutiny under the Competition Act. And as HI was acting together with FIH its actions also require to be inquired into. 127. But before proceeding further it is necessary to consider as to who were the affected parties. The ultimate consumers are the hockey loving fans who enjoy the game of hockey. The intermediate consumers are the athletes without whom no game can be held. The other persons involved are the regulators who lay down the rules of the game and enforce the anti-doping code and the organisers who provide the arena and the officials for the organisation of the game. The ultimate consumers, the intermediate consumers, the regulators and the organisers are necessary for running a league. The other persons involved are the radio/TV broadcasters, sponsors, advertisers etc. without whom the league cannot be successful. 128. For the ultimate consumers, it is entertainment which is necessary and the entertainment increases when famous national and international stars perform. If such stars play in the hockey league, the ga....
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....e for the national team. 132. As far as the organisers, broadcasters, advertisers etc. are concerned, by reducing the number of games played FIH and HI cause economic harm to them. By not allowing international level players from playing in unsanctioned events as the value of the tournament decreases, economic harm is caused to the organisers, broadcasters, advertisers etc. 133. In the same manner by debarring officials, umpires etc. from unsanctioned tournaments, economic harm is caused to them in the form of earnings. It has been conceded on behalf of FIH that a private organiser would give more money to the players, umpires etc. because it would not invest any amount in the development of hockey. But the question is whether FIH/HI have invested amounts in the development of the game. The players say that they have not got proper remuneration and there is no evidence that any amount was spent by FIH, IHF or HI in the development of the game. In fact, Govt. of India is funding the development of hockey. 134. There is nothing wrong in having a system of sanctioned/unsanctioned events. But what has to be seen whether it causes any economic harm to the others in the game of ....
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....s taken place outside India; or (e) any party to combination is outside India; or (f) any other matter or practice or action arising out of such agreement or dominant position or combination is outside India, Have power to inquire [in accordance with the provisions contained in sections 19, 20, 26, 29 and 30 of the Act] into such agreement or dominant position or combination has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India [and pass such orders as it may deem fit in accordance with the provision of this Act.] In view of this provision under the Competition Act if the activity of an enterprise located outside India has effect on competition in India, it falls within the jurisdiction of the Commission and the Commission has full authority to take action against an enterprise located outside India. Thus the arguments of FIH on this issue is without any basis. 138. No analysis would be complete without reference to Section 18 of the Act which read as follows- 18. Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on com....
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....ctices and it is the duty of the Commission to eliminate them and also to ensure that a competitive environment exists in the market of hockey services. The Commission has to ensure that the interests of the consumers have got to be protected. The end consumers in this case are spectators whereas the players are also consumers but are in the nature of intermediate consumers. It has already been held that by having a system of sanctioned and unsanctioned events leads to erosion in the number of matches and thus reduced viewership. It effects the players as it reduces their remuneration and their right to play for their country. It also leads to lower earnings for the organisers, broadcasters, officials, umpires etc. Thus the system of having a system of sanctioned/unsanctioned events leads to anticompetitive effects in the market of hockey. 141. In view of Section 18 of the Act it has to be seen whether the agreements entered into by HI with the players as code of conduct amounted to a violation of Section 3 or Section 4 of the Act. The DG has held that it amounts to a denial of market access under Section 4(2)(c) of the Act as it results in the denial of the market access. There....
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.... association HI and the relevant market for it is running of services in hockey in the entire territory of India. Hockey India acted at the behest of FIH and is bound by the directives of FIH. HI's activities would be suspended if the directives of FIH are not followed by it. FIH also has the ability to act in a manner so as to affect the consumers and the entire market in its favour. The factors mentioned in Section 19(4) of the Act such as the dominant position as mentioned in Section 19(4)(g) is applicable. Further the factor in Section 19(4)(f) is applicable. Thus FIH is dominant in the relevant market of hockey services in India. 144. As far as HI is concerned, by the order of the Supreme Court and the recognition granted by FIH, it has got the right to run hockey events in the international events in India and abroad. There is no other player in this market. As a consequence HI was able to act independently of the market forces and affect the consumers in its favour. Thus HI was able to enforce the code of conduct for the players. It made HI dominant in the field of international hockey market in India. The dominance is also established by considering the factors (f) a....