TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 1778
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....mants are International volleyball players who have represented India in numerous international championships and tournaments. 3. VFI is a National Sports Federation ("NSF") for Volleyball in India recognised by the Ministry of Youth Affairs & Sports, Government of India. 4. VFI is the exclusive holder of all the rights pertaining to volleyball including commercials associated with it. It exercises full control over the players of volleyball registered or associated with it, with respect to their participation in all sporting events, leagues, tournaments, sale and promotion of their goodwill, reputation, sponsorship, endorsement rights, media and advertising rights and other commercial rights. 5. Baseline is a company registered under the Companies Act, 2013 and is, inter-alia, engaged in providing consultancy services, arranging sponsorships, marketing brands and sports events, brand licensing, including providing consultancy for sports management, celebrity endorsements and management, etc. 6. The ranking of Indian volleyball team is dropping year after year with the present ranking of the Senior Indian Men's and Women's Teams being 131 and 117, respectively. The econ....
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....ts. Being the sole and exclusive authority to regulate and govern the game of volleyball, it enjoys powers including selection of Indian volleyball players, conducting national, open and international tournaments, approving tournaments, placing restrictions on participation of players, hearing appeals and grievance of players, VFI enjoys dominant position in the market for conducting and governing domestic and international volleyball activities for both men and women. VFI holds the right to give necessary permissions and rights for organisation of volleyball leagues. 9. By granting exclusive rights for 10 years to Baseline to organize Volleyball League and by restricting and prohibiting any other person or enterprise from organising a similar Volleyball League for the next 10 years, VFI has abused its dominant position and violated Section 4 of the Act. Further, by entering into this Agreement with Baseline, VFI has placed restrictions not only upon other persons or enterprises who wish to conduct similar leagues in India but also for the players of volleyball in India. Therefore, VFI and Baseline have violated provisions of Section 3 of the Act. 10. VFI has abused its dominant ....
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....d amount to controlling and limiting of the availability of volleyball players for other leagues for the next 10 years; controlling and restricting the volleyball players to participate in any other league of their choice for the next ten years; controlling the market for volleyball players as well as for other enterprises to hold the league; and refusal on the part of VFI to deal with enterprises other than Baseline. As per the Informants, the said Agreement is alleged to be in contravention of Section 3(3)(b) and Section 3(4)(d) read with Section 3(1) of the Act. It has been alleged that by entering into an agreement with Baseline and disallowing the volleyball players to compete at local, national and international level would cause grave prejudice to the interest of thousands of volleyball players who would be deprived of their rights, thereby, causing an appreciable adverse effect on the competition in relation to organizing volleyball tournaments and leagues in India. 14. Finally, the Informants contended that they as well as numerous other international and national players have been denied an opportunity to be part of auctions of Volleyball League being organised by Baseli....
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....in the order dated 11.04.2019, of the Commission that restrictions contained in the Agreement dated 21.02.2018, between OP- 1 and OP-2 are only with respect to conducting volleyball league by the name 'Indian Volleyball League' and there has been no restriction on conduct of any other league of same or similar nature. VFI accordingly filed another affidavit dated 13.06.2019, confirming that there are no restrictions on any other person from conducting similar volleyball league (at domestic, state, national or international level). However, such volleyball league conducted by any person other than Baseline, will not be conducted in association with VFI during the term of its Agreement with Baseline. 19. The Commission considered the affidavit dated 13.06.2019, filed by VFI, in the ordinary meeting held on 19.06.2019. 20. The Commission has given a careful consideration to the information and submissions made during the preliminary conference as also the written submissions filed by the parties and particularly the affidavit(s) dated 17.04.2019 and 13.06.2019 filed by VFI and other material available on record 21. The Commission, in its earlier decisions, namely, Hemant Sh....
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....o organise events should be considered from the point of view of final consumer, i.e., the spectators. Given the unique characteristics of volleyball, it is unlikely the consumers will regard any other sport or event as substitutable. Similarly from intended use perspective also, entertainment from sports may not be regarded as substitutable with other forms of general entertainment. Accordingly, the relevant product market to assess restrictions on organisations of the volleyball events will be the "market for organisation of professional volleyball tournaments/events". The Commission further notes that for assessment on restrictions on volleyball players, VFI requires the services of volleyball players for organising volleyball events which makes it a consumer of volleyball players. VFI cannot substitute the service provided by volleyball players with any other service. Accordingly, the relevant product market to assess restrictions on volleyball players will be the "market for services of volleyball players". 25. As regards the relevant geographic market, the Commission is of the view that VFI being the National Sports Federation, governs the game of volleyball by stipulating r....
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.... also empowered to select teams to represent India in International competitions. Being the sole governing body of players of volleyball registered/associated with it, it exercises full control over them with respect to their participation in all sporting events, leagues, tournaments, sale and promotion of their goodwill, reputation, sponsorship, endorsement rights, media and advertising rights and other commercial rights. As a result, VFI is the de-facto regulator and an exclusive body responsible for the conduct and governance of all volleyball events in India. Further, regulatory powers enjoyed by VFI include right to give permission and rights for organising any volleyball league. Thus, regulatory powers coupled with right to carry out economic activity to the exclusion of any other body in the field grants virtual monopoly rights to VFI. 31. In light of the above, the Commission is of the view that being the only national level volleyball federation in India, regulatory powers enjoyed by it under the pyramid structure of sports governance and being the predominant buyer of the services provided by professional volleyball players, VFI, prima facie, appears to enjoy dominant po....
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....hat VFI and Baseline arbitrarily selected players to form pool of players available for auction for Baseline's league. Further, several reputed and high ranked players who have represented India in various tournaments were arbitrarily denied an opportunity to be part of the auction pool without any reason, thereby shutting doors for such players to be part of the Volleyball League or to play in Asian Championship. 36. In this regard, the Commission notes that competition cases relating to sports associations/federations usually arise due to the dual roles, regulatory as well economic, performed by them. In this regard, the Commission, in Hemant Sharma's Case (Supra)in relation to conflict between regulatory and economic activities observed as under: "....the Commission notes that competition cases relating to sports associations/federations usually arise due to conflict between their regulatory functions and economic activities undertaken by them. The Commission is of the view that system of approval under the pyramid structure of sports governance is a normal phenomenon of sports administration. However, rules governing the players and the organisation of sport events/ ....
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.... League to be organised within the territory of India or abroad for a period of ten years as well as even after renewal or extension of the said Agreement. 40. Further, in terms of Clause 2.14 of the Agreement, VFI would ensure that no international or national event of volleyball sports are organised or allowed to be organised for ten years which may have interest conflicting with that of the Volleyball League. The Agreement also contains a non-compete clause whereby VFI would not deal with or engage in any sort of activity or project or leagues or event of same or similar nature in India or abroad. Furthermore, VFI, in the non-compete clause, has undertaken not to allow any person or association to organise any other league at state, district or local level. 41. A collective reading of the above mentioned clauses of the Agreement prima facie suggests that VFI has put a complete bar on organisation of any other volley ball event at international, national, district or local level. This potentially forecloses the relevant market for organization of professional volleyball tournaments/ events in India to other competitors of Baseline who seek to organise events similar to Volleyb....
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.... India has been coming forward to participate in the said Championship. The said Championship is not government Championship and the players participating in the said Championship represent their respective Clubs. All the expenses towards participation in the said Championship are borne by the club. v. Selection of India Volleyball teams for domestic and international tournaments is completely independent of the participation of the players in the League. No special points/consideration is/will be given to the players on account of their participation or performance in the League. 44. The Commission at this stage is of the prima facie opinion that certain clauses of the agreement dated 21.02.2018 as it existed prior to amendment between VFI and Baseline had placed a prohibition on the players who are participating in Baseline's Volleyball League from participation in other similar tournaments for a period of ten years. The restrictions may be extended by more than ten years in case the said Agreement is renewed or extended. Furthermore, the players who would participate in Baseline's Volleyball League are/were not allowed to participate in any national or international e....