TaxTMI 
TaxTMI 
2018 (4) TMI 916
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....MSOs") who carried the aforesaid channel to persons who watch Cable T.V. A channel placement agreement was entered into, on the same day, between the broadcaster and the MSOs, all of which are stated to belong to the Fast Away Group. By notices of termination dated 19thJanuary, 2011, the aforesaid agreements were terminated by relying on a clause of the said agreements which entitled them to do so on the mere giving of a thirty day notice. This being the case, respondent no.5 complained about the aforesaid termination. The Director General of Investigation looked into the complaint of the broadcaster, investigated the matter, and ultimately delivered its report to the Competition Commission, in which it found that the said MSOs indulged in practices which were violative of Sections 3 and 4 of the Competition Commission Act, 2002. Going by this report, and after hearing the parties to the dispute, the Competition Commission, by its detailed order dated 3rdJuly, 2012, first held that according to it, the relevant market to be looked at for the purpose of Sections 3 and 4 would be the State of Punjab and Chandigarh. Having regard to this market, so far as Cable TV was concerned, a fin....
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.... observes that the argument of spectrum shortage and low TRP is merely an afterthought to justify its conduct. 6.4.11 The conduct of OP has resulted in loss to the informant-broadcaster as well as denial of services to the consumers who want to watch the channel of the informant. As on date the Informant has access to only 56,000 households on the cable TV in the state of Punjab & Chandigarh, where about 45 lacs households are connected on cable network. Thus, the informant has been effectively wiped out from the entire relevant market by the conduct of OPs. 6.4.12 In the light of the facts and circumstances of this case the Commission observes that due to the acts of the OP group the informant has been denied the market access and opportunity to compete and holds that violation of the provisions of section 4(2) (c) of the Act gets established." 2. Given the aforesaid finding, the Commission thereafter imposed a penalty in exercise of its power under Section 27 of the Act of Rs. 8,40,01,141/-. 3. The appeal by the MSOs group to the Appellate Tribunal found favour with the aforesaid Tribunal. Essentially, the Tribunal's finding was that the denial of market a....
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....ent on to add that the TRP ratings of the broadcaster, namely, respondent No. 5, was the lowest by far among all other news channels, getting a rating of only 3.8 as against the lowest rated news channel, which was MH Channel, of 7. This, according to him, was because of an experiment conducted by respondent No. 5 which failed, because it broadcast news in three different languages, and since most of the viewers were not familiar with each of these languages, the channel failed and respondent No. 5 was no longer in business. Therefore, according to him, even though technically speaking, Regulation 4.2 was breached, yet a notice of termination could have been given stating the aforesaid reasons as to why the agreement between the MSOs and the broadcaster was terminated. This being the case it is clear that the termination of the agreement did not take place because of the MSOs dominant position in the market, but because of the factors aforestated. In his view, therefore, this is not a case in which penalty should have been imposed. We have heard learned counsel for the parties. 6. It is important to advert first to the provisions of the Act. The Preamble to the Act reads as u....
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.... shall be an abuse of dominant position under sub-section (1), if an enterprise or a group- (a) directly or indirectly, imposes unfair or discriminatory- (i) condition in purchase or sale of goods or service; or (ii) price in purchase or sale (including predatory price) of goods or service. Explanation- For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or services referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory conditions or prices which may be adopted to meet the competition; or (b) limits or restricts- (i) production of goods or provision of services or market therefor; or (ii) technical or scientific development relating to goods or services to the prejudice of consumers; or (c) indulges in practice or practices resulting in denial of market access in any manner; or (d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or accord....
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....k of such enterprises; (f) dependence of consumers on the enterprise; (g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking or otherwise; (h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers; (i) countervailing buying power; (j) market structure and size of market; (k) social obligations and social costs; (l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition; (m) any other factor which the Commission may consider relevant for the inquiry. Section 27 Orders by Commission after inquiry into agreements or abuse of dominant position- Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in con....
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....provisions of sub-section (2), sections 240 and 240A of the Companies Act, 1956 (1 of 1956), so far as may be, shall apply to an investigation made by the Director General or any other person investigating under his authority, as they apply to an inspector appointed under that Act. Explanation- For the purposes of this section,- (a) the words "the Central Government" under section 240 of the Companies Act, 1956 (1 of 1956) shall be construed as "the Commission"; (b) the word "Magistrate" under section 240A of the Companies Act, 1956 (1 of 1956) shall be construed as "the Chief Metropolitan Magistrate, Delhi". Section 53B Appeal to Appellate Tribunal- (1) The Central Government or the State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order referred to in clause (a) of section 53A may prefer an appeal to the Appellate Tribunal. (2) Every appeal under sub-section (1) shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local aut....
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....ets all over India. Also, a positive role is given to the Commission to inquire, suo motu, into the dominant position of enterprises, and to prohibit anti competitive agreements. Section 60 then gives the Act overriding effect over other statutes in case of a clash between the Act and such statues to effectuate the policy of the Act, keeping in view the economic development of the country as a whole. 8. On the facts of the present case, it is clear that "dominant position" is clearly made out. The Explanation to Section 4 specifically refers to a position of strength that is enjoyed by an enterprise or group thereof in the relevant market, which, as is stated hereinbefore, is Punjab and Chandigarh, in the Cable TV market, which enables respondents no. 1-4 to operate independently of competitive forces prevailing in the relevant market. The Commission has found, on facts, that since the aforesaid MSOs group has 85% of the subscribers share in the aforesaid cable TV market in the State of Punjab and Chandigarh, and that they are able to operate independently of competitive forces prevailing in the aforesaid market. This finding has notbeen set aside by the Appellate Tribunal. Also....