Competition Commission of India (CCI): In a case filed by the informant under Section 19(1)(a) of the Competition Act, 2002 (‘Act’) against the Federation of Publishers’ and Booksellers’ Associations in India (‘FPBAI’) and its former office-bearers, alleging anti-competitive practices, a 4-member bench of Ravneet Kaur (Chairperson), Anil Agrawal, Sweta Kakkad, and Deepak Anurag (Members), held the FPBAI guilty of contravention of the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act and the President and the Secretary of the FPBAI and the President/Chairman of GOC liable under Section 48 of the Act, thereby imposing penalties amounting to Rs 632954.
BACKGROUND
The informant was the Managing Director of Prints Publication Pvt. Ltd. and a member of FPBAI. The Informant alleged that FPBAI, which is an umbrella body/ association of publishers and booksellers in India, provided its platform to cartelize and dictate, or facilitate, the fixing of prices, and limited and controlled the supply of books and journals within the territory of India. The allegations primarily stated: (i) fixing of inflated currency exchange rates by FPBAI for import/export of books/journals, which rates were higher than the Reserve Bank of India’s (‘RBI’) published rates; (ii) capping of discounts which may be offered by members of FPBAI to Indian libraries/institutions etc.; and (iii) limiting and controlling supply of books and journals in India by fixing terms of supply, regulating credit period, fixing re-sale prices and issuing advisories to libraries and other institutions to not engage in business with vendors/distributors who are not empanelled with FPBAI.
On basis of such allegations, the Commission, vide order dated 23-12-2021, passed under Section 26(1) of the Act, formed an opinion that a prima facie case was made out against FPBAI. The matter was accordingly referred to the Director General (‘DG’) for investigation. The DG submitted its investigation report on 29-11-2022. The investigation concluded that FPBAI’s conduct amounted to price fixation and contravened provisions Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act.
CCI’s Analysis
Issue 1: Fixation of Inflated Foreign Currency Exchange Rates
The Commission noted that the Good Offices Committee (‘GOC’) of FPBAI had been publishing conversion rates for ten major foreign currencies since 1980, calculated by taking into consideration monthly average rates published by the RBI, incorporating a 3% markup over RBI rates.
The Commission perused through the evidence, including emails and statements from the Secretary of FPBAI and Chairman of GOC, and noted that these rates were often insisted upon by importer booksellers. This practice resulted in financial losses for other booksellers who were compelled to purchase at GOC rates but sell to institutions at prevailing bank rates. Further, the Commission noted that the fixation of exchange rates of currency had a direct bearing on the price, as a higher GOC conversion rate meant a higher final price to be paid by the buyer.
The Commission concluded that the fixation of these higher conversion rates amounted to price fixation, in contravention of the provisions of Section 3(1) read with Section 3(3)(a) of the Act.
Issue 2: Declaration of discounts to be offered by member booksellers/ publishers, by GOC, post February 2021
The Commission in International Subscription Agency v. Federation of Publishers’ and Booksellers’ Associations in India, 2021 SCC OnLine CCI 4, had found discount control by FPBAI, anti-competitive in violation of the provisions of Section 3(3)(a) read with Section 3(1) of the Act, and had directed FPBAI to ‘cease and desist’ from indulging in such anti-competitive conduct.
In the present matter, although the DG’s investigation found no discount clauses in physical GOC circulars after February 2021, the Commission observed that older circulars containing discount terms continued to be displayed on affiliated websites. In the event of a delay in receiving physical GOC circulars, the booksellers across the industry access websites for immediate use.
The Commission observed that FPBAI, as the apex association, had the responsibility to ensure compliance and prevent the circulation of such outdated or incorrect directions by its member associations.
The Commission noted that FPBAI had merely informed its members about the order passed by the Commission in International Subscription Agency (Supra), but it did not discuss in detail the nature of its conduct, which was held anti-competitive by the Commission. Moreover, an office-bearer of FPBAI could be seen justifying the discount control policy.
The Commission took note of the contention of FPBAI that no specific direction was given in the order to give wide publicity to the final order, and stated that pursuant to the issuance of its decision finding certain conduct to be anti-competitive, it was upon the wisdom of the contravening party to determine how the order of the Commission had to be implemented in letter and spirit. The failure of FPBAI to give wide publicity to the directions contained in International Subscription Agency (Supra) amongst its members defeated the very objective of the direction of ‘cease and desist’ from controlling discounts.
The Commission, acknowledging a perceived ambiguity in the previous order’s specific directions, refrained from initiating proceedings under Section 42 of the Act and directed FPBAI to undertake awareness measures regarding anti-competitive conduct.
Issue 3: Issuing terms and conditions with respect to credit period, interest rate and verification of prices
The Commission, after perusing through the terms and conditions contained in the GOC circulars mentioning credit period, interest rate, verification of prices, etc., found them not to be just recommendatory in their spirit.
The Commission observed that their widespread circulation every month had reinforced and integrated them into the industry practice over the years, leaving little or no room for negotiations or innovation. It was pointed out that the stipulation of these commercial terms has the potential of taking away the commercial wisdom or liberty of the parties to a transaction, i.e. member bookseller and the purchasing institution, as commercial terms need to be negotiated/ decided by the parties to the transaction themselves and need not be superimposed by an industry association.
The Commission thus found stipulation of commercial terms to have the effect of limiting or controlling the market for book trade, in contravention of the provisions of Section 3(1) read with Section 3(3)(b) of the Act.
Issue 4: Issuing Advisories/ Appeals to libraries, booksellers and/ or institutions pertaining to procurement from FPBAI
The Commission noted that FPBAI had previously issued appeals urging libraries to procure books exclusively from registered members of GOC and FPBAI. Although the FPBAI ceased issuing new appeals or advisories, it had not withdrawn the advisories issued earlier. The Commission further noted that the presence of earlier advisories, coupled with the circulation of approved vendor lists from time to time, had the effect of communicating to the buyers to purchase from the list of approved vendors only, thereby interfering with the independent choice of buyers. The Commission found this conduct as distortion of the level playing field and foreclose opportunities for participation of non-members, contravening Section 3(1) read with Section 3(3)(b) of the Act.
Appreciable Adverse Effect on Competition (‘AAEC’)
The Commission noted that Section 3(3) of the Act presumes an AAEC for practices such as price determination and market control, with the burden of rebuttal on the contravening party.
The Commission noted that given FPBAI’s significant market presence and influence, its practices had a wide-ranging impact. The fixation of conversion rates resulted in either higher prices for end-consumers or financial losses for booksellers. The combination of unwithdrawn advisories and approved vendor lists created entry barriers and posed a risk of driving existing competitors out of the market. The Commission found that FPBAI failed to rebut this presumption by demonstrating any pro-competitive effects in terms of the factors enumerated in Section 19(3) of the Act.
Liability under Section 48
The Commission held the President and the Secretary of the FPBAI and the President/Chairman of GOC liable under Section 48 of the Act. The Commission opined that these individuals held active roles in the formulation and enforcement of the established anti-competitive practices and failed to demonstrate that the contravention occurred without their knowledge or that they exercised due diligence to prevent its commission.
CCI’s Decision
In light of the afore-stated reasons, the Commission held the FPBAI guilty of contravention of the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act and the President and the Secretary of the FPBAI and the President/Chairman of GOC liable under Section 48 of the Act imposing penalties of Rs. 2,56,649, Rs. 1,76,305, Rs. 1,00,000 and Rs. 1,00,000, respectively (total: Rs 632954).
Additionally, in terms of Section 27(g) of the Act, the Commission issued comprehensive directions requiring FPBAI to circulate and upload the copy of the present order to all its members, withdraw all circulars and advisories which contravened the provisions of the Act, provide summary of both the orders specifying its anti-competitive conduct and organize competition awareness and compliance from time to time.
[Pranav Gupta v. Federation of Publishers’ and Booksellers’ Association in India, 2025 SCC OnLine CCI 59, decided on 01-07-2025]
