Competition Commission of India (CCI): In a significant decision, the coram of Ashok Kumar Gupta (Chairperson), Sangeeta Verma and Bhagwant Singh Bishnoi (Members), in view of the negative impact of exclusive and restrictive agreements between online ticketing platforms and single screen cinemas/ multiplexes on the relevant market; held that there is a prima facie case owing to the conduct of ‘BookMyShow’ that requires investigation by the Director General (DG) to determine whether their conduct of has resulted in contravention of the provisions of S. 4 (abuse of dominant position) of Competition Act, 2002.
Background of the case: Showtyme an online movie ticketing portal was launched in November 2021 in order to provide an alternative option to the cine-goers in Hyderabad (later across India) to book their movie tickets online, by paying a convenience fee of ₹11/- per ticket; which is stated to be 40-50% less than the existing players. On the other hand, BookMyShow, a popular online movie ticketing portal, holds at least 90% market share in movie ticket booking industry in India.
The informant in the instant matter, is a social activist and the founder of Showtyme, who alleged that BookMyShow has formed an explicit cartel with multiplexes and theatres and pursuant to which, it has signed exclusive agreements with them in order to thwart any opportunity to other platforms to sell tickets of cinema, even at 50 % lesser convenience fee than that of BookMyShow, thereby controlling the movie ticketing industry and imposing barriers for new entrants like Showtyme.
Contentions
It was submitted the informant that BookMyShow has abused its dominant position under S. 4 of the Competition Act, by imposing unfair and discriminatory conditions on the theatres/ multiplexes i.e., making them sign contracts for sale of 100% tickets on its platform.
It was further submitted that BookMyShow is entitled to charge the consumers convenience fee for online booking of tickets; however, entering into agreements with theatres/multiplexes to not sell the movie tickets online to anyone else; giving lakhs and crores of rupees on loans at zero interest to the Opposing Parties; and selling more than 50% tickets of movies online; such acts leaves no scope for the new entrants to enter into the market and thereby creating a hostile effect upon fair competition.
The informant also put forth before the Commission that he submitted various complaints to licensing authorities and other authorities in the State of Telangana and has also given a representation to the Ministry of Consumer Affairs, Government of India.
Per contra, BookMyShow argued that-
It is an intermediary engaged in the activity of facilitating online booking of tickets for movies, plays, concerts, sports events across India through its mobile application and website and follows a standard form of contract and commercial terms. The duration of the agreements with each cinema/ theatre/ multiplex is negotiated as per their requirement. It is entitled to charge convenience fee from customers for facilitation of booking of tickets through its mobile app and website.
BookMyShow also contended that the informant approached the Commission with “unclean hands” as he filed the information even before the launch of Showtyme’s website. As per BookMyShow, the website should have been in operation for at least a certain amount of time to experience the competition in the market from various players. Thus, the question of causing harm to Showtyme does not arise.
Regarding the allegations of exclusivity, it was stated that BookMyShow is a relatively new entrant in the relevant market; therefore, in order to penetrate this market BookMyShow had to tie-up with certain cinema theatres on an exclusive basis. This exclusivity also benefits the cinema theatres that have tied up with BookMyShow as otherwise they do not have the resources to make the tickets available online through their own website or other modes. It was further contended that allegations of creating entry barrier are misleading as the market is still evolving and volatile in nature. It was stated that various participants like PayTM have entered the market and established a significant presence.
It was stated that BookMyShow does not provide any monetary assistance in return for exclusivity. In certain cases, it only provides some security deposit to adjust the ticket price and revenue share to the cinema theatres.
Observations: Perusing the facts and the allegations levied upon BookMyShow, the Commission duly noted that the grievance of the informant centered around the agreement and arrangement between BookMyShow and certain theatres/ multiplexes in the city of Hyderabad, thereby allegedly preventing him from offering the services of his website Showtyme for online booking of tickets.
While determining “relevant market” for the instant matter, the Commission noted that relevant product market comprises of all those products or services which are regarded as interchangeable or substitutable by consumers, by reason of their characteristic, price and intended use. Therefore, the most important parameter is as to how the consumers or users of products or services perceive substitutability or interchangeability amongst provision of services. The Commission noted that the services of online platforms like BookMyShow are available pan-India and the platform faces similar competitive constraints and homogeneous conditions of competition throughout India. Thus, the relevant market in the present case was that of ‘market for online intermediation services for booking of movie tickets in India’.
The Commission pointed out that BookMyShow had not provided data on its market share for the online intermediation services for booking of movie tickets in India rather they provided the number of tickets sold, indicating total yearly footfalls and not value of tickets in INR crores, which is apparently untenable and inconsistent for computation of market share of BookMyShow even in the wider market proposed by it. The Commission stated that it is not inclined to rely upon such figures.
Regarding BookMyShow’s dominant position, the Commission observed that market share is one of the many factors that are considered in the assessment of dominance. In the instant case, market share of the platform needs to be seen in conjunction with its reach, scale and the network effects that work in its favour, leading to huge consumer footfalls thereby making presence on the platform critical for visibility and competitive ability of cinema theatres. The ability of BookMyShow to enter into exclusive agreements corroborates its position of strength and the various provisions in its agreements with cinema theatres/multiplexes, indicate its superior bargaining power in deciding contractual terms. These factors, taken together, prima facie appear to substantiate the dominant position enjoyed by BookMyShow in the relevant market of online intermediation services for booking of movie tickets in India.
The Commission also pointed out that BookMyShow’s exclusive agreements have the potential to reduce competition in the relevant market, as they may make rival intermediary platforms or new entrants incur significant additional cost to induce the cinemas to give up their exclusive contracts with the leading platform with market power. “The exclusive and restrictive agreements with single screen cinemas and multiplexes, in conjunction, prima facie appear to have the potential of denying market access to competing platforms and potential entrants. The cinema theatres as well as the cinegoers alike are restricted in their choice of alternate ticketing platforms, during the working of the contracts that BookMyShow has with large number of theatres/ multiplex chains”.
Upon perusal of the exclusive agreements with single screen cinemas, the Commission also pointed out that BookMyShow has reserved the right of data collection, ownership and storage; without the cinemas having any right, title, interest to such data; even though in the agreements there is provision for sharing of data.
Decision: With the aforementioned observations, the Commission was of the view that “exclusivity relating to data ownership can increase the bargaining power of the platform over time. Data further strengthens and entrenches the network effects limiting inter platform competition. In a dynamic sense, this would imply that BookMyShow would earn monopoly rents, going forward. The aspect of exclusive ownership of and access to data by a dominant intermediary, merits investigation”.
The Commission was of the view that there exists a prima facie case regarding BookMyShow’s conduct which should be investigated by the Director General under the provisions of S. 26(1) of the Competition Act. The Commission also directed the DG to complete the investigation and submit the investigation report within a period of 60 days from the receipt of this order.
[Vijay Gopal v. Big Tree Entertainment Pvt. Ltd., 2022 SCC OnLine CCI 36, decided on 16-06-2022]
*Sucheta Sarkar, Editorial Assistant has reported this brief.
National Company Law Appellate Tribunal (NCLAT): While deciding the instant appeal filed by Amazon.com NV Investment Holdings LLC challenging the order passed by the Competition Commission of India dated 17-12-2021 [Amazon.com NV Investment Holdings, In re,2021 SCC OnLine CCI 71], wherein the CCI had imposed a penalty of INR Two Hundred Crore upon Amazon due to their failure to notify combination in terms of the obligation cast under S. 6(2) of the Competition Act; the Bench of Justice M. Venugopal (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member) in a 300-page deliberation, upheld the decision taken by the CCI to impose such a penalty. The Tribunal held that Amazon did not make full, whole, fair, forthright and frank disclosure of relevant materials and had furnished only limited details / disclosures, pertaining to its `acquiring strategic rights and interests’ over `FRL’, and executing `Commercial Contracts’ among itself and `FRL’ concerning the ambit and purpose of `Combination’, therefore the penalty imposed is justified. Amazon was directed to furnish the penalty within 45 days from the date of NCLAT’s decision.
Background: In a recapitulation of facts; the matter revolved around the appellant’s [Amazon] acquisition of 49% shareholding in Future Coupons Private Limited (FCPL). FCPL filed an application stating that Amazon had initiated arbitration proceedings in relation to transfer of assets of FRL, a company in which FCPL holds 9.82% of the shareholding and there are related litigations pending before the constitutional courts. It was alleged that Amazon took completely contradictory stands in the arbitration proceedings and constitutional courts with respect to its investments in FCPL as compared to the representation and submissions made before the Commission. Such contradictions were said to establish false representation and suppression of material facts before the Commission.
Contentions by Amazon before the NCLAT
The counsels appearing for Amazon put forth many contentions before the Tribunal, primary among them are as follows-
The `Investor Affiliate’, `Amazon Seller Services Private Limited’ (`ASSPL’) was not acquiring any `Shares’ or `Voting Rights’ or `Assets’ or `Control’ in `Future Retail Limited’ (`FRL’) and as such, therefore S. 5 of the Competition Act, 2002 was not attracted in the instant case. It was contended that the `proviso to S. 20 (1) of the Competition Act, bars the CCI from enquiring into a consummated transaction, more than one year, after the said transaction had taken effect.
The date on which the combination took effect is considered to be the date of payment and that the payment was effected on 26.12.2019 and that `FCPL SHA’ came into effect on 26.12.2019 and that the limitation under S. 20 (1) of the Competition Act, 2002 for the CCI to `inquire’ into the notified Combination, expired on 25.12.2020, being a `Holiday’, the `Limitation’ came to an end on 26.12.2020.
As per the appellant, Competition Act does not empower revisiting or reopening the `approvals’ granted after 210 days in case a notification is filed under S. 6 (2) of the Competition Act or one year from the date on which a combination took effect, in respect of cases covered under `S. 20 (1) of the Competition Act, 2002.
The appellants also contended that the impugned order by the CCI is bad in law because of the fact that it was passed in the absence of a `Judicial Member’, completely disregarding the observations made by the Supreme Court in State of Gujarat v. Utility Users Welfare Association, 2018 (6) SCC 21.
It was also argued that there was no fraud in the present case and in reality, the `Finding of Fraud’ necessarily requires a decision that the information/documents purportedly `suppressed/undisclosed’ as a `material impact’ on the assessment of the Combination; i.e., mere mentioning and using the word fraud/ fraudulent without any material particulars, would not amount to pleading of Fraud.
Contentions by the Respondents
The respondents contended that during the time of `notifying the Combination’, the appellant had stated that the intended ambit and purpose of the `Combination’ vis-a-vis, its investment in `FCPL’ (2nd Respondent) was in view of `FCPL’s potential’ for `Long Term Value Creation’ and providing `Returns’ on its `Investment’; and also, with a view to strengthen and augment the `Business of `FCPL’ that `it does not have any direct or indirect Shareholding’ in `FRL’ and further that it would not acquire directly any rights in `FRL’ and was only acquiring `Limited Investor Protection Rights’ via `FCPL’ (2nd Respondent) with a view to protect the value of its investment in `FCPL’. It was thus contended that the whole attention, as represented, during the time of notifying the `Combination’ was “FCPL and its ‘business’ with ‘rights’ in `FRL’ being reflected as mere `Investor Protection Rights’”.
It was brought to the notice of the `Tribunal’ that the CCI in regard to the considerations for the `Appellant’s Investment’ in `FCPL’, the nature and rationale of the rights, in respect of the `Appellant’ under `FRL SHA’, raised some queries and that the `appellant’ through letter dated 15.11.2019, once again emphasized `FCPL’ to be the `attention of the Combination’.
The respondents submitted that the `Combination Approval Process’ requires the `notifying person’ to submit the true, correct and complete information as regards the actual `Combination’ pursued by the `parties’ and to meet the requirements of the `Competition Act, 2002 and Regulations prescribed thereunder. Only then, the CCI will evaluate the effects of a `Combination’ in a proper perspective.
It was argued that CCI had no possibility for to conduct `Combination Assessment’ from the `point of Strategic Alignments’ between `FRL’ and `Amazon group’. Since the effect of Commercial Contracts entered into between `FRL’ and `Amazon group’ entities in their normal course of `Business’ would be considerably different from `parties’ envisaging `Strategic Alignments’ between their `Business’ though `Strategic Investments’. Therefore, the `Regulatory Process’ of `Notification’ and the nature of `Economic’ and `Legal’ enquiry would differ in the two situations.
As per the respondents, Amazon had failed to submit Key Internal Documents and instead, provided the documents relating to the Coupons and Payments Business of `FCPL’. The appellant was also required to clarify `Economic’ and `Strategic Purpose’ (Rationale) of the `Proposed Combination’ however, the appellant, had stated that its rationale as FCPL’s potential for long term value creation, returns on investment and to strengthen FCPL’s business of loyalty, gift and reward cards.
The appellant repeatedly asserted that its decision to invest in `FCPL’ was based on the `Long Term Potential’ of `FCPL’ and it was submitted that appellant had misrepresented the scope and purpose of the `Proposed Combination’. The `Appellant had deliberately strived to `Misrepresent’ and `Suppress’ material particulars and documents vis-à-vis the `Proposed Combination’ and in short, the `Appellant’ had repeated the same false statements in relation to ambit and purpose of the `Proposed Combination’, etc., even after being asked with the pointed follow up questions.
Observations- In deciding the appeal, the Bench perused the concerned provisions of the Competition Act, 2002 [definitions of ‘agreement’, ‘market’, ‘relevant product market’, ‘combination’ etc.] and Combination Regulations, 2011. The Bench noted that Competition Commission of India has a duty to “institute a system of undistorted competition which is commensurate to the promotion of the interest of the Consumers”. The Bench delved into the scope of CCI’s authority as enshrined in the 2002 Act- “CCI can take `suo moto cognisance’ of the case based on an anonymous complaint. But the Commission must be satisfied that there exists a prima facie case for ordering into the allegation of violation of S. 3 (1) or S. 4 (1) of the 2002 Act”. The provisions concerning ‘combinations’, ‘penalty to be imposed by CCI [Ss. 44 and 45] were also perused. The Bench also observed that it is up to the CCI after considering the facts on records, (details provided in `Notice’ and `Response’ filed by the `Parties’) may form a prima facie opinion that the `Proposed Combination’ is likely to cause an Appreciable Adverse Effect within `relevant market’ in India.
Examining the transactions that were involved in the Amazon-Future Deal, the Tribunal noted that Amazon’ had mentioned that it does not have any direct or indirect shareholding in `FRL’ and further it would not acquire directly any rights in `FRL’ based on which CCI’ had issued the `Approval Order’ on 28.11.2019 as per S. 31 (1) of the Competition Act based on the `Competition Assessment’ arriving at the opinion that the `Combination’ is not likely to cause any appreciable adverse effect on `competition’ in India. However, all that changed when FCPL in its letter dated 25-03-2021 raised major issues with the deal. “It cannot be brushed aside that if an individual had entered into or intended to enter into any `Transaction’ being a `Combination’, within the `purview of S. 5 of the Competition Act, 2002’, then that `person’ compulsorily enjoined to file a `Notice’ as per S. 6 (2) of the Competition Act, 2002 coupled with the concerned `Combination Regulations, 2011’. No wonder, an individual who had not notified a `Combination’ as per the ingredients of S. 6 (2) of the Competition Act, 2002, cannot press into service the ingredients of S. 6 (2-A) of the Act”.
It was observed that, “`Appellant/Amazon’ would enter into `Commercial Agreements’ with `FRL’ to expand the coverage, while also involving in `strategic’ discussions for `call option’ over shares held by `FRL’s Promoters with a view to leave the `Appellant/Amazon’, `well positioned to become the single largest shareholder of FRL’. In fact, the number of Equity Shares of `FRL’ to be held by `FCPL’ `was calculated’ such that `Amazon’ can indirectly hold the same number of shares of `FRL’ at a price per share representing a 25% premium on the minimum Regulatory Price”
The Tribunal pointed out that on the part of the Amazon’ there is a `Misstatement of Fact’/`Misrepresentation’ in not exhibiting the internal emails which make known the real ambit and purpose of the notified transactions, thereby misleading the CCI in approving the `Proposed Transaction’.
The Tribunal perusing the internal communications/emails of Amazon pointed out that the appellant had projected in `FRL’, `FCPL’ only a vehicle, for which, no intention was assigned- “This `Tribunal’ comes to an inevitable and inescapable conclusion that Amazon had not fulfilled its obligation as per ingredients of S. 6 (2) of the Competition Act, 2002, attracting imposition of penalty under S. 43A of the Act, extending to 1% of the total turnover or the Assets whichever is higher of such a `Combination’.
Conclusion and Decision- The Tribunal held that Amazon had indeed hidden the true objective behind the combination and justified the penalty imposed by the CCI. However, the Tribunal opined that the imposition of maximum penalty of Rs.1 Crore each, as per the `impugned order’ passed by the `CCI’, as per Ss. 44 and 45 of the Competition Act, is slightly on the excessive side.
Framework of RTI Act restricts jurisdiction of CIC to provide a ruling on issues pertaining to access/right to information, not venture into merits of case
Neeraj Kumar Gupta (Information Commissioner), decides whether Commission can provide a ruling regarding the merits of a case or redressal of grievance.
While examining the complaint, can CIC direct disclosure of information under S. 18 of RTI Act?
Neeraj Kumar Gupta (Information Commissioner) addressed a matter wherein it was alleged that the respondent intentionally provided an evasive reply by stating that the information sought was not clear, hence issue of prompt response of CPIO was raised.
Customs, Excise and Services Tax Appellate Tribunal (CESTAT)
Will compensation paid by an employee to an employer for resigning from service without giving requisite notice, fall under taxable service?
The Coram of S.K. Mohanty (Judicial Member) and P. Anjani Kumar (Technical Member) reiterated that, any compensation paid by the employee to the employer for resigning from the service without giving the requisite notice, would not be termed as consideration for the contract of employment and as such, would not fall within the preview of taxable service.
Cenvat Credit is allowed on Insurance services; Tribunal sets aside penalty and interest
Ramesh Nair (Judicial Member) partly allowed an appeal which raised the question as to whether the appellant was entitled to Cenvat credit in respect of Input Services namely construction services, fee for architectural structural works for factory plant building, group Medi-claim Insurance, Group personal accident insurance, insurance, motor car/vehicle insurance, labour charges for installation, testing & commissioning of components of VRV System (Centrally AC system) in the office building etc.
Promotional activity for IPL not covered under ‘Business Auxillary Service’; Anil Kumble not liable to pay Service Tax
The Coram of P. Anjani Kumar (Technical Member) and P. Dinesha (Judicial Member) allowed appeals against the order of First Appellate Authority which upheld the demand of service tax by the adjudicating authority.
Conduct of Zomato and Swiggy, anti-competitive? DG to investigate
The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) held that, in the case of both Swiggy and Zomato, prima facie there existed a conflict of interest situation, warranting detailed scrutiny into its impact on the overall competition between the RPs vis-à-vis the private brands/entities which the platforms may be incentivised to favour.
Income Tax penalty cannot be invoked without relevant documents substantiating business activities
The Coram of Shamim Yahya, Accountant Member and Narender Kumar Choudhary, Judicial Member, observed that under the Income Tax Act penalty can’t be invoked without relevant documents which substantiate business activities.
Can mere rejection of the claim by Assessing Officer, make assessee liable for penalty?
Addressing the issue, of whether mere rejection of the claim by an Assessing Officer would ipso facto make assessee liable for the penalty, the Bench of G.S. Pannu (President) and Kul Bharat (Judicial Member) held that it won’t make the assessee liable to a penalty.
Whether expenditure incurred on replacements of old truck bodies will be treated as revenue expenditure?
The Bench of Sonjoy Sarma (Judicial member) and Rajesh Kumar (Accountant Member) held that the expenditure incurred by the assessee as such on replacement of wooden body of trucks has to be allowed fully against the income of the assessee in the current year.
Delayed payment of employee’s contribution to EPF/ESIC is not disallowable as amendments to S. 36(1) (va) and S. 43B effected by Finance Act, 2021 were applicable prospectively; appeal allowed
The Coram of Pradip Kumar Kedia (Accountant Member) and Narender Kumar Choudhry (Judicial Member) allowed an appeal which was filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals) -XXXVI, New Delhi passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 concerning AY 2013-14. The instant appeal challenged the disallowance of Rs 45,60,061 on account of delayed payment of employee’s contribution towards EPF and ESIC.
Whether gift received from HUF to any member of HUF is exempt from taxable income?
The Coram of Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member) examined the issue as to the taxability of the amount of gift received by the assessee from his ‘HUF’.
Name and Designation of Officers of IBBI is exempted under S. 8(1)(j) of the RTI Act
“Section 8(1)(j) exempts information which relates to personal information, the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless a larger public interest justifies the disclosure of such information.”
Fine of Rs 41.21 Crores imposed on a Government Corporation for excess mining and violation of conditions of Environmental Clearance: NGT issues 10 directions || If no fine, would rule of law be impacted? Read
While imposing a fine of Rs 41.21 crores on Singareni Collieries Company Limited, for violation of environmental clearance conditions and mining excess coal, the Coram of Justice K. Ramakrishnan (Judicial Member) and Dr Satyagopal Korlapati (Expert Member) expressed that,
“The Government Corporations are expected to be more law abiding and if any leniency or discrimination is shown for committing violation, then it is very difficult to maintain the rule of law, if any violations were committed by other persons. There will not be any moral right for the regulators to take action against others, if similar violations were committed by them.”
National Consumer Disputes Redressal Commission (NCDRC)
If a person makes an investment in shares, will he be considered a Consumer under S. 2(1)(d) of Consumer Protection Act? NCDRC elaborates in view of ‘earning livelihood’
Viswanath, Presiding Member, held that the complainant was not investing money in the share market exclusively for earning his livelihood, hence the same was he did not fall under the definition of Consumer.
[Medical Negligence] Consumer Protection Act should not be a halter round the neck
In an alleged medical negligence case, the Coram of R.K. Agrawal, President and Dr S.M. Kantikar, Member, reiterates that the “Consumer Protection Act should not be a halter round the neck.”
“Negligence per se may be declared when …”: NCDRC explains in medical negligence case while awarding Rs 25 lakh compensation plus interest
While addressing a medical negligence case, the Coram of Dr S.M. Kantikar (Presiding Member) and Binoy Kumar, Member, observed that, Negligence per se is not a separate cause of action from negligence suits. Negligence per se, however, assumes the duty because of public policy or law.
Due to burglary, customers lost their valuable articles from bank lockers. Will Bank be liable for deficiency in service?
The Coram of Justice R.K. Agarwal (President) and Dr S.M. Kantikar (Member) expressed that, customer avails of Locker hiring facility is so that they may rest assured that their assets are being properly taken care of, but in the present matter, OP Bank failed to take care of the assets.
Sudden cancellation of rooms booked for daughter’s marriage 3 months prior on account of maintenance: Is it an acceptable reason? Can consumers claim compensation?
“The memories of marriage ceremonies are lifetime events in the life of bride and bridegroom and their family members to make their moments memorable. In our country, certainly, it is not an easy task for the parents to arrange their daughter’s marriage in a five-star hotel in place like Jaipur or any big cities. All of sudden cancellation of booking about 3 months prior to the date of marriage on account of maintenance is not acceptable reason.”
After forceps delivery, patient developed 4th degree perineal tear losing chance for normal delivery: Will doctor be liable for medical negligence?
After forceps delivery, a woman lost her control over passing urine and stool due to the negligence of a doctor, the Coram of R.K. Agrawal (President) and Dr S.M. Kantikar (Member) upheld the decision of State Commission with respect to compensation of Rs 8 lakhs.
Whether Homebuyer’s’ decision as a Class will be binding on every Homebuyer?
The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member) held that decision taken by the class of Homebuyers will be binding on all the homebuyers.
Once insolvency proceedings are put on Stay, Can resolution professionals still be entitled to fees during Stay?
In a matter with regard to fees of resolution professional, the Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member) held that, when proceedings in a matter are put to stay, the resolution professional is not entitled to fees during the stay on insolvency.
Can territorial jurisdiction of NCLT be decided on basis of a Facility Agreement between parties?
The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member) held that, the territorial jurisdiction of NCLT to decide a case under Insolvency and Bankruptcy Code, 2016 cannot be taken away by the Facility Agreement between the parties.
Whether fixation of salary of the MD is within the domain of IBC?
“There is no crystallised quantum of amount which can be claimed as salary/remuneration fixed by the Board of Directors as contemplated under Section 196 of the Companies Act, 2013.”
Article 1 of Limitation Act deals with suits relating to accounts: NCLAT highlights scope of Art. 137 of Limitation Act
The Coram of Justice Ashok Bhushan (Chairperson) and Dr Alok Srivastava (Technical Member) observed that, provisions of the Limitation Act are applicable to proceedings under IBC.
Jet Airways Resolution Plan’s implementation is subject to the outcome of?
The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member), held that the implementation of the Jet Airways Resolution Plan will be subject to the outcome of appeals filed against the order of National Company Law Tribunal which approved the resolution plan for Jet Airways.
Insider Trading | SEBI’s restriction on Infosys employees for trading securities lifted by SAT: Read 5 reasons why SAT lifted restrictions
While lifting the restriction of buying or selling any securities, laid down by SEBI on employees of Infosys for allegedly violating the insider trading regulations, the Coram of Justice Tarun Agarwala (Presiding Officer) and Justice M.T. Joshi (Judicial Member) reiterated the settled law that burden of proof is always upon the prosecution, SEBI to prove that he had access to UPSI.
Once a statute is repealed, will subordinate legislation made under statute ceases to have effect or can it be avoided by a saving clause?
“A statute after its repeal is completely obliterated as it had never been enacted. The effect is to destroy all inchoate rights and all causes of action that may have arisen under the repealed statute.”
Logix Insolvent? NCLT initiates insolvency proceedings against Logix City Developers
The Coram of Bachu Venkat Balaram Das (Judicial Member) and Narender Kumar Bhola (Technical Member) initiates insolvency proceedings against Logix City Developers due to default in payment.
If change of promoter is left to wisdom of society, it will create chaos and uncontrollable situation leaving fate of flat purchasers in doldrum
The Coram of Indira Jain J., (Chairperson) and Dr K. Shivaji, Member (A), expressed that, if the change of promoter without following the procedure prescribed under the law is left to the wisdom of society, it will not only render the relevant provisions of revocation of registration redundant but also create chaos and uncontrollable situation leaving the fate of allottees /flat purchasers in doldrum.
Competition Commission of India (CCI): On finding that DLF being a new entrant in developing commercial space in Kolkata and having only one property, Commission held that the same cannot be treated as a dominant enterprise which can operate independently of competitive forces.
Instant information was filed under Section 19(1)(a) of the Competition Act, 2002 by Informant 1 and Informant 2 against DLF Commercial Complexes Limited (OP 1) and others alleging inter alia, abuse of dominant position in contravention of the provisions of Section 4 of the Competition Act.
Analysis and Decision
Commission found that the only allegation made against DLF was that by abusing its dominant position in the relevant market DLF has imposed unfair conditions in the sale of commercial space in its project DLF Galleria located in Kolkata.
Though the informant had miserably failed to furnish any facts or figures to show that DLF enjoys a dominant position in developing commercial space in the metropolis of Kolkata.
Further, as per the information available in the public domain the DLF, being a new entrant in developing commercial space in Kolkata, is having only one property related to commercial retail space.
In view of the above-said factors, DLF cannot be treated as a dominant enterprise which can operate independently of competitive forces prevailing in the relevant market or affect the competitors or the relevant market in its favour.
Coram expressed that, as the factum of DLF enjoying a dominant position in developing commercial space in Kolkata has neither been established by the informant nor it has been substantiated from the information available in the public domain no case of violation of section 4 of the Act was made out against DLF.
Therefore, no prima facie case was made out for making a reference to the Director-General for conduction investigation into the matter. [Rajarhat Welfare Association v. DLF Commercial Complexes Ltd., Case No. 10 of 2011, decided on 25-5-2022]
Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) held that, in the case of both Swiggy and Zomato, prima facie there existed a conflict of interest situation, warranting detailed scrutiny into its impact on the overall competition between the RPs vis-à-vis the private brands/entities which the platforms may be incentivised to favour.
An information had been filed under Section 19(1)(a) of the Competition Act, 2002 by National Restaurant Association of India (Informant/NRAI) against Zomato and Swiggy (OPs) alleging that the practices of Zomato and Swiggy were in violation of Section 3(4) read with Section 3(1) of the Act.
Factual Background
NRAI submitted that the OPs provide restaurant partners (RPs) a listing service and allow consumers to interact with them through their platforms.
Further, NRAI stated that it is only because of the network effects of the OPs that, despite their anti-competitive practices, RPs are still dependent on the platforms to earn revenues, which shows the absence of countervailing buyer power with the RPs.
Bundling of Food Delivery
It was alleged that the stated delivery services are not optional for the RPs who wish to avail listing service and they are forced to take the delivery service of the platform.
Adding to the above, NRAI stated that the bundling of delivery services is an unfair imposition.
It is violative of Section 19(3) of the CCI Act.
Data Masking
RPs receive no data or information about the end-consumers to whom the food is delivered, which is a practice of OPs.
Due to the above-stated, RPs are not aware of where the foods is being delivered, to whom and in how much time, which creates a lack of transparency.
Vertical Integration
NRAI has further alleged that OPs are engaging in a dual role on their platform where they list their own cloud kitchen brands exclusively on their platform, akin to private labels, thereby creating an inherent conflict of interest in the platform’s role as an intermediary on one hand and as a participant on the other hand.
One-Sided Contracts
It was alleged that Zomato and Swiggy enter into one-sided contracts with RPs owing to their superior bargaining power.
Further, NRAI has alleged that Zomato and Swiggy often compel the RPs to commit exclusively to be listed on their respective platform through incentives, lower commissions etc. to maintain their competitive edge in the market, at the exclusion of other new entrants. This creates/strengthens barriers for a new entrant into the market which would find itself deprived of essential and interdependent inputs like RPs and customers which would be locked-in to the incumbents’ platforms.
Infact, price parity terms have also been imposed on the RPs through their respective contracts.
NRAI has also alleged that the commissions which are charged by the OPs from RPs are unviable and are to the tune of 20% to 30%, which are extremely exorbitant for the RPs.
In view of the above allegations, NRAI sought an inquiry under the Act against the OPs.
Analysis and Decision
Coram stated that it emerged from the claims made by Zomato and Swiggy that bundling delivery with ordering enables them to control the time taken for delivery and qualitatively standardise such delivery for the end consumer.
In Commission’s opinion, bundling did not seem to raise any competition concern as such. Even otherwise, the Informant was not able to substantiate its claim that bundling of delivery with ordering, in itself, led to cause AAEC either between restaurants or between hyperlocal delivery service providers.
Moving further, the Commission was of the view that prima facie a conflict-of-interest situation arose in the instant case, both with regard to Swiggy and Zomato, because of the presence of commercial interest in the downstream market, which may come in the way of them acting as neutral platforms.
Coram added that the above-said required detailed examination and further, remarked that,
Given that platforms are vertically related with the RPs, including their private brands and those operating through their respective cloud kitchens, such arrangements whereby preferential treatment is accorded to some entities can be looked as a potential contravention of Section 3(4) read with Section 3(1) of the Act.
Both Swiggy and Zomato operate as major intermediary platforms in the food delivery space, underscoring their market power and ability to adversely as well as appreciably affect the level playing field.
Commission also observed that a holistic examination is required to ascertain whether the intermediaries prevent competition on merits, creating an ecosystem likely to cause an appreciable adverse effect on competition.
Further, the price parity clause may discourage the platforms from competing on a commission basis as RPs need to maintain similar prices on all platforms and provide similar prices to the customers, regardless of the commission rates paid to the platform. Hence, the said arrangements can cause AAEC on the market, therefore investigation is made out.
In Commission’s opinion, the allegations pertaining to delayed payment cycle, imposition of one-sided clauses in the agreement, charging of exorbitant commission etc., they did not seem to have an effect on competition.
Concluding the matter, Commission held that prima facie with respect to the conduct of Zomato and Swiggy, investigation by the DG to determine whether the conduct of the OPs have resulted in contravention of the provisions of Section 3(1) of the Act read with Section 3(4) was required.[National Restaurant Association of India v. Zomato India Ltd., 2022 SCC OnLine CCI 22, decided on 4-4-2022]
Bombay High Court: The Division Bench of G.S. Patel and Madhav J. Jamdar, JJ., directed the Competition Commission of India not to take any coercive actions against Asianet Star Communications Private Limited, Disney Broadcasting and Star India.
The Bench stated that the purpose of the present order was to simply hold the parties in a form of a status quo or a neutral position until they can be heard fully once the Court reopens after the summer recess and once the CCI has been given a reasonable opportunity to file an affidavit and submit a compilation of relevant law.
Additionally, the High Court intended to give 2nd respondent, the complainant, an opportunity before the CCI to file a further affidavit.
Factual Background
The 2nd respondent ADNPL a Multi-System Operator (MSO) had filed an application with CCI seeking an order under Section 26(1) of the Competition Act. It was stated that ADNPL provides digital TV services predominantly in Kerala but also in Karnataka, Andhra Pradesh, Telangana and Odisha. It has been in the business of distribution of TV channels for the better part of three decades.
Whereas the petitioners are stated to be satellite-based TV channels, and each has multiple channels in different languages and genres. ADNPL receives broadcasting signals from these broadcasters and both petitioners and ADNPL have had a commercial business relationship for nearly two decades.
As per the regulations and decisions of TRAI and TDSAT, broadcasters must not have discriminatory pricing in commercial contracts with multi-service operators. The 2017 Regulations cap discounts and distribution fees payable to distributors.
ADNPL submitted that due to various discriminatory acts, it had to seek legal redress.
In view of ADNPL, the petitioners were in the position of dominance and had provided a direct competitor of ADNPL in Kerala, one Kerala Communicators Cables Limited (KCCL) significant discounts though these were indirectly buried in the form of allied agreements that apparently offered a cashback system.
Whether the above is correct or not was still to be determined.
The primary complaint of ADNPL was that agreements were intended to bypass the TRAI/TDAST set caps or upper limits, or to subvert them and to that extent were shame or bogus agreements only ostensibly complying or being in accordance with what was permissible but actually designed to provide unfair advantage ADNPL’s competitor, KCCL.
Hence, CCI had directed the DG to cause an investigation and submit a report.
High Court opined that CCI must be afforded an opportunity of placing its case fully before the Court. Further, ADNPL too may wish to place a law or filed a further affidavit.
The Bench held that it would hold the matter over to the 8th June 2022 when it will be placed high on the supplementary board for directions so that it can fix a date for final disposal at the admission stage. CCI will file its Affidavit in Reply and compilation of documents by 7th May 2022. By that date, any further Affidavit in Reply by the complainant must also be filed. Court will permit a Rejoinder by 3rd June 2022.
High Court directed CCI to not pass any orders or adjudicate further on the 2nd respondent’s complaint until further orders of the Court.
Matter to be listed for 8-6-2022.[Asianet Star Communications (P) Ltd. v. CCI, WP No. 3755 of 2022, decided on 6-4-2022]
Advocates before the Court:
Mr DJ Khambata, Senior Advocate, with Kunal Dwarkadas, Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur, Akshay Agarwal, i/b AZB Partners, for the Petitioner in WP/3860/2022.
Mr Musatafa Doctor, Senior Advocate, with Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur, Akshay Agarwal, i/b AAB Partners, for the Petitioner in WP/3755/2022.
Mr Navroz Seervai, Senior Advocate, with Avinash Amaranath, Tarun Donadi, Nikhil Gupta & Priyanka Chaddha, i/b Wadia Ghyandy & Co, for Respondent No. 2, in WP/3860/2022.
Mr Somsekhar Sundaresan, with Abhishek Venkatraman, Viswajit Deb, Manu Chaturvedi, Malhar Desai Hafeez Patanwala, i/b Juris Corp, for Respondent No. 1, in all matters.
Dr Birendra Saraf, Senior Advocate, with Pradeep Bakhru, Avinash Amaranath, Tarun Donadi, Nikhil Gupta & Priyanka Chaddha, i/b Wadia Ghandy & Co, for Respodnent No. 2 in WP/3755/22 & WP/3845/2022.
Mr Rajendra Barot, with Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair & Varun Thakur, i/b AZB Partners, for Respondents Nos. 3 & 4, in WP/3845/2022.
Mr. Vivek Menon, Counsel a/w Mr. Siddharth Chopra & Mr. Thomas George and Mr. Ranjeet Sidhu & Mr. Mudit Tayal i/b Saikrishna & Associates
Star India providing bouquet of channels at lesser prices resulting significant loss in consumer base of Asianet Digital Network: Star India abusing dominance of its position?
The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) noted allegations against Star India for providing a bouquet of channels at lesser prices resulting in denying of market access and also amounting to unfair pricing.
7 entities indulged in anti-competitive agreement for supply of signages for branches/offices/ATMs of SBI: E-mails exchanged between parties formed basis for manipulation of bidding process
Noting that in respect of cases concerning cartels that are hidden or secret, there is little or no documentary evidence and may be quite fragmentary, Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) imposed penalties on 7 entities and signages for bid-rigging activities and cartelization with respect to the supply of signage for branches, offices and ATMs of State Bank of India.
Forcing buyers to purchase insurance policies? Even if dealers offer to sell insurance policies to customers, customers may yet have option to buy such policies from alternative channels
The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) addressed a matter wherein it was alleged that certain Car Companies were abusing their dominant position and denying the cashless claim to consumers if the insurance policy had not been obtained through them, their dealers or their insurance broking companies.
Notice issued against a dead person is null and void and all consequent proceedings/orders being equally tainted are liable to be set aside
The Coram of Amit Shukla (Judicial Member) and Pradip Kumar Kedia (Accountant Member) allowed an appeal against a revisional order passed under Section 263 of the Income Tax Act, 1961.
Does Income Tax Act prohibit HRA Exemption On Rent Paid To Wife?
An appeal was filed by the assessee against the order of CIT(A)-21, New Delhi dated 21-01-2019 before the bench comprising of Sh. A. D. Jain (Vice-President) and Dr. B. R. R. Kumar (Accountant Member).
National Consumer Disputes Redressal Commission (NCDRC)
When a Statute provides for a particular period of limitation, it has to be scrupulously applied, as an unlimited limitation leads to a sense of uncertainty
The Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) expressed that, when a Statute provides for a particular period of limitation, it has to be scrupulously applied, as an unlimited limitation leads to a sense of uncertainty.
Will Tax deducted at source be attracted on compensation awarded under Consumer Protection Act “in the form of simple interest”?
The Coram of Dinesh Singh (Presiding Member) and Justice Karuna Nand Bajpayee (Member) expressed that in the ‘service’ of ‘housing construction’, if, in a particular case, “compensation” is computed “by way of interest” on the deposited amount it shall not be differently treated than the other cases in which the term “interest” may not at all be used in computing the compensation.
If a person conceals facts about pre-existing fatal disease at the time of taking insurance, would it be a breach of insurance contract?
The Coram of Dinesh Singh (Presiding Member) and Karuna Nand Bajpayee (Member) upheld the decision of the District Commission with respect to concealment of pre-existing fatal diseases at the time of taking insurance.
Consensus between dentists and patients essential to standardize treatment plans and methods: No X-ray conducted prior to performing root canal treatment: Read how NCDRC found dentist negligent
Expressing that, the consensus between the dentists and patients is essential to standardize treatment plans and methods, Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) addressed a case of dental negligence and remarked that,
“The teeth are only part of the face and it cannot be simply concluded that the whole face will become more beautiful once the teeth become neat.”
Whether Shareholders have the right to remove Directors of a company? NCLT explains in light of Companies Act, 2013
Expressing that the management of business affairs in a company is not a sole duty of a Director, the results of a company’s performance is a team of work of Board of Directors, the Coram of Ashok Kumar Borah, Judicial Member and Shyam Babu Gautam, Technical Member, held that, Companies Act gives shareholders the right to remove the Directors of the company.
National Company Law Tribunal orders insolvency proceedings against Supertech: Indebted and defaulted repayment of loan
The Coram of P.N. Prasad, Judicial Member and Rahul Bhatnagar, Technical Member, declared insolvency proceedings against the builder Supertech Limited.
Logix Insolvent? NCLT initiates insolvency proceedings against Logix City Developers
The Coram of Bachu Venkat Balaram Das (Judicial Member) and Narender Kumar Bhola (Technical Member) initiates insolvency proceedings against Logix City Developers due to default in payment.
Reduction of Capital’ is a ‘Domestic Affair’ of a particular company in which, ordinary, a Tribunal will not interfere because of the reason that it is a ‘majority decision’ which prevails
“A ‘special resolution’ is required to determine those matters for which the Act requires a ‘special resolution’ and except these matters in all other situations an ‘Ordinary Resolution’ is to be passed.”
Unregulated tourism activities resulting in damage to environment in eco-sensitive Himalayan States of India: NGT takes suo motu cognizance
The Coram of Justice Adarsh Kumar Goel (Chairperson) and Justice Sudhir Agarwal (Judicial Member), Prof. A. Senthil Vel (Expert Member) and Dr Vijay Kulkarni (Expert Member) took suo moto cognizance based on media report highlighting the damage to the environment in eco-sensitive Himalayan States of India due to unregulated tourism.
Can SEBI proceed against a Chartered Accountant for lack of due diligence? SAT analyses
The Coram of Justice Tarun Agarwala (Presiding Officer) and Justice M.T. Joshi (Judicial Member) while addressing a matter whether a Chartered Accountant could be held guilty by SEBI for lack of due diligence, held that,
Lack of due diligence can only lead to professional negligence which would amount to a misconduct which could be taken up only by ICAI.
Uttar Pradesh Real Estate Appellate Tribunal
Developer issued two allotment letters, increasing cost of a unit in second by correcting taxes, lease rent and advance maintenance charges: Read whether UPRERA finds it to be illegal
The Division Bench of Justice Dr D.K. Arora (Chairman) and Rajiv Misra (Administrative Member) set aside the decision of the Regulatory Authority and held that the developer did not conceal the details of the project including the status of the same.
The Coram of Justice Malay Marut Banerjee (Chairman) and Suranjan Kundu (Judicial Member) and Chanchalmal Bachhawat (Technical Member), expressed that, Article 304(a) frowns upon discrimination (of a hostile nature in the protectionist sense) and not on mere differentiation.
Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) addressed a matter wherein it was alleged that certain Car Companies were abusing their dominant position and denying the cashless claim to consumers if the insurance policy had not been obtained through them, their dealers or their insurance broking companies.
Manav Seva Dham (Informant) alleged contravention of provisions of Sections 3 and 4 of the Competition Act, 2002 by Maruti Suzuki India Limited (OP 1/Maruti), Tata Motors Ltd. (OP 2/Tata), Hyundai Motor India Limited (OP 3/Hyundai), Hero Moto Corp Limited (OP 4/Hero), Mahindra and Mahindra Limited (OP 5/Mahindra) and Toyota Kirloskar Motor Private Limited (OP 6/Toyota).
It was stated that the OP were enjoying a dominant position in the market for automobiles and motor insurance in India, which enables them to operate independently of competitive forces.
Further, it was added that there had been apparent monopoly and cartelization by the OPs in selling insurance policies through their fully owned insurance broking or subsidiary companies and servicing and repairing motor vehicles in respect of the insurance policies sold by them, which is detrimental to the insurance policyholders.
Due to the above stated, the informant has received several complaints from the insurance companies as well as insurance policyholders about the monopolistic practices of the OPs.
OPs even ensure that the genuine spare parts are only available with their authorised dealers, and their authorised dealers continue to charge arbitrary high prices from the consumers, who are forced to avail the services for repairing and maintaining their motor vehicles since the genuine spare parts, diagnostic tools, and technical information required to service their cars are not made available to independent repair workshops, failing which, the warranty of the vehicle would lapse.
Hence, the OPs have created a monopoly over the motor insurance and repair services for their motor vehicles.
Analysis of the Commission
Primarily, the Informant was aggrieved by the alleged conduct of the OPs of disallowing of the cashless claim to consumers if the insurance policy has not been obtained through them, their dealers, or their insurance broking companies.
Whether the Opposite Parties are in a position of dominance and have abused their dominant position, as alleged?
Commission noted that nothing concrete has been submitted in the regard to the allegations made.
Further, the Coram expressed that,
Consumers have a choice to purchase their vehicle from various manufacturers and the same also is true in respect of availing insurance facility for vehicles.
Informant had alleged regarding some arrangement of OPs with their insurance broking companies for the provisions of insurance services to customers who buys vehicles from them.
Commission observed that, even if dealers offer to sell insurance policies to customers, the customers may yet have the option to buy such policy from alternative channels should they want.
“…facility of cashless claim may be an additional benefit extended by certain brokers and may not be confined to the broking arms of the aforementioned Opposite Parties alone.”
Hence, no prima facie case existed. [Manav Seva Dham v. Maruti Suzuki India Ltd., 2022 SCC OnLine CCI 17, decided on 22-3-2022]
Welcome to the 13th NLU Antitrust Law Moot Court Competition, 2022 organized by National Law University, Jodhpur.
The Competition is scheduled from March 11 – March 13, 2022 and is being organized under the patronage of the Competition Commission of India, in collaboration with Cyril Amarchand Mangaldas and our knowledge partners, SCC Online and Eastern Book Company. The Competition has always been known for its excellent mooting and judging, and this year, its bigger than ever, with 37 participating teams from some of the country’s most prestigious law schools.
We at NLU, Jodhpur believe that education unless and until complemented by intellectually invigorating challenges fails its purpose. Cognizant of this responsibility and with a vision to foster the advancement of learning and research in the field of competition law, we will ensure that this competition will help all participants hone their mooting skills along with exploring the nuances of competition law with an exciting and challenging proposition. The organizing team has left no stone unturned in their diligent endeavour to make this competition an enriching experience, this time virtually!
We welcome all the judges and the participants, and hope that we are able to make this a memorable event for all. The Moot Proposition revolves around contemporary issues in the field of competition law, including the role of sectoral regulators vis-a-vis the role of the competition authority. The proposition also entails challenging issues pertaining to cartelization and abuse of dominance by entities in the automotive manufacturing industry.
9:00 AM – Inaugural Ceremony and Exchange of Memorials
The ceremony started with a welcome address by Ms. Rishika Arya, Convenor of the Moot Court Committee. Dr. I.P. Massey, Dean of Law, and Mr. Rohan C. Thomas, Chairperson of the Moot Court Committee, virtually inaugurated the 13th NLU Antitrust Law Moot Court Competition. With this, we start with the Competition. The participants’ queries have been answered and and exchange of memorials between the teams has taken place to the satisfaction of the participants.
Inaugural Ceremony_13th NLU Antitrust Law Moot Court Competition, 2022
The Preliminary Rounds begin at 11 a.m. All the competing teams have our best wishes.
Judges Briefing
The judges for the Preliminary Rounds have been briefed, this time through e-mail. A comprehensive bench memorial and a condensed version of the memorial prepared by the Moot Court Committee were mailed to the judges. The judges for the rounds are distinguished legal experts in their fields. Our distinguished judges are here to assess each team’s understanding and command over the law.
11:00 AM – Preliminary Rounds
With an unfettering zeal, the Preliminary Round has taken off in full swing in all the courtrooms and the teams are presenting their arguments, which they have worked tirelessly on, in high spirits. The judges are actively attempting to dissect the counsels’ arguments and the questions pour in. The teams are well prepared and they answer the questions by citing the relevant law. Following the intense mooting session, the teams also present their respective rebuttals and sur-rebuttals
Preliminary Rounds Preliminary Rounds
1:00 PM–End ofPreliminary Rounds
The competition has taken off to a spirited start as we conclude our preliminary rounds. The teams await with bated breath for the Reverse Preliminary Rounds, which will start at 3 PM. Both these rounds together will determine which teams qualify for the Octa-Finals. We look forward to seeing the teams showcasing their talent! We wish all the teams the best of luck.
3:00 PM – ReversePreliminary Rounds
All the teams are back on track with fresh energy and high spirits to present their arguments. In the Reverse Preliminary Rounds, the teams get to present arguments for the side opposite to the one they argued for in the preliminary round, to ensure fairness. The rounds are underway and the participants are putting forth some impressive arguments and showcasing their great mooting skills. May the best teams prevail!
The reverse preliminary rounds have also come to an end. The teams continued to showcase their great preparation with splendid performances. These rounds were just as heated as the preliminary rounds and with their culmination, the battle for the top 16 spots now stands concluded.
The wait for the results is finally over!
Here we present the top 16 teams that have qualified for the Octa Finals Round –
National Law University, Odisha
Symbiosis Law School, Hyderabad
Dr. Ram Manohar Lohiya National Law University, Lucknow
National Law School of India University, Bangalore
Institute of Law, Nirma University, Ahmedabad
Jamia Millia Islamia, New Delhi
Damodaram Sanjivayya National Law University, Vishakhapatnam
Gujarat National Law University
Army Institute of Law, Mohali
National University of Study and Research in Law, Ranchi
National Law Institute University, Bhopal
Hidayatullah National Law University, Raipur
Symbiosis Law School, Pune
Maharashtra National Law University, Nagpur
Tamil Nadu National Law School, Tiruchirapalli
NMIMS Kirit P Mehta School of Law, Mumbai
It has been an exhilarating experience so far. We excitedly await to see what tomorrow holds for us. Our best wishes to all the teams.
DAY – 2
It is the 2nd day as sixteen teams are ready and eager to fight it out in the Octa-Final Rounds of the 13th NLU Antitrust Law Moot Court Competition, 2022. The teams have had the night to prepare themselves and we look forward to some inspired rounds of mooting!
9:00 AM–Octa-Final Rounds
The stage is all set with the commencement of the exciting Octa-Final Rounds, with the teams pitted against one another for a thrilling show of events. We anxiously wait to find out which of the teams’ manage to keep their wits and make it to the next rounds of the Competition.
Octa-Final Rounds
Octa-Final Rounds
11:00 AM – End of Octa-Final Rounds
With the teams continuing to exhibit great argumentation and mooting skills, the Octa-Final Rounds have finally concluded. Here are the teams qualifying to the Quarter Finals-
TNNLS Tiruchirappalli National Law Institute University, Bhopal Jamia Millia Islamia, New Delhi Institute of Law, Nirma University, Ahmedabad Army Institute of Law, Mohali Symbiosis Law School Hyderabad NLU Odisha Symbiosis Law School, Pune
1:00 PM – 3:00 PM–Quarter-Final Rounds
The qualifying teams charge forward with zeal as the Quarter Final Rounds commence! The teams are well prepared and they answer the questions posed by the judges confidently by citing relevant legal provisions and precedents.
Quarter-Final Rounds
Quarter-Final Rounds
4:30 PM: The much awaited results of the Quarter-Final Rounds have been declared. Following a tremendous effort from everyone, the following teams have advanced to the Semi-Finals-
Army Institute of Law, Mohali Symbiosis Law School, Pune NLIU, Bhopal Symbiosis Law School Hyderabad
5:00 PM – Semi-Final Rounds
Court Room – 1
Army Law Institute, Mohali versus Symbiosis Law School, Hyderabad was a fierce round of arguments and counter-arguments. The learned bench comprised of Mr. Abir Roy, Mr. Mohan Ronanki and Mr. Bharat Budholia. The round began with the team from Army Law Institute, Mohali presenting their arguments as Appellants. The first speaker for appellant dealt with the first and fourth issue. The counsel was grilled on the facts of the case as well as the similarity with issues and facts of the cases relied upon by the counsel in his speech. He handled the questions very well. The second speaker dealt with the second and third issue of the proposition. Counsel was questioned thoroughly regarding the applicable law and its applicability to the facts of the case. The appellants concluded with an extension of 12 minutes. Symbiosis Law School, Hyderabad then took over as Respondents. The first speaker addressed the first and second issue of the proposition. The counsel was grilled by all three judges regarding the jurisdiction of the competent court in the first issue. He handled all questions tactfully and the judges seemed satisfied by the reasoning provided. The second speaker dealt with the third and fourth issues. The judges at the outset stated the argument made by counsel for appellant and asked the counsel to rebut the same. The counsel handled all questions well. The Respondents concluded with an extension of 9 minutes. Fine speaking skills were put on display by all the participants. The teams showed a thorough knowledge of the law and cited various authorities to back their arguments. It was a closely contested round, adding to the anticipation of the results.
Semi-Final Rounds
Court Room – 2
The Court Room was charged with enthusiasm and energy as National Law Institute University, Bhopal and Symbiosis Law School, Pune competed against each other. The learned bench comprised of Mr. Rahul Rai, Mr. Rudresh Singh, and Ms. Sunaina Dutta. The round began with the team from Symbiosis Law School, Pune presenting their arguments as Appellants. Speaker 1 from the Appellant’s side argued on the anti-competitive nature of the agreement and the anti-competitive effect in the market for electric automobiles. Speaker 2 cited practical examples to support his arguments. Both the speakers cited strong authorities coupled with relevant facts to support their arguments. An extension of approximately 3 minutes was granted to both the speakers by the judges. National Law Institute University, Bhopal then took over as Respondents. Speaker 1 from the side of the Respondent began by arguing on monopoly in the relevant market and abuse of dominant position. Both the speakers were questioned on the case laws and other authorities that they had cited. The Counsels also demonstrated the harms caused by sharing sensitive information among the competitors. An extension of 3 minutes was granted to both the speakers by the judges. The rounds were indeed highly charged with display of excellent mooting skills and greatly nuanced legal arguments from both the parties.
Semi-Final Rounds
7:30 PM: The much awaited results of the Semi-Final Rounds have been declared and the teams qualifying to the Final Rounds of the 13th NLU Antitrust Law Moot Court Competition, 2022 are –
National Law Institute University, Bhopal
Army Institute of Law, Mohali
With this, we come to the conclusion of Day 2. It has been an enthralling experience so far. We excitedly await to see what tomorrow holds for us. Our best wishes to all the teams.
DAY-3 – Final Rounds
Welcome Back to the 13th NLU Antitrust Law Moot Court Competition, 2022!
10:05 AM: The final rounds between Army Institute of Law Mohali and National Law Institute University, Bhopal are about to begin!The Final Round of the Competition is being judged by a varied panel of eminent lawyers and economists. Ms. Payal Malik is the Advisor and Head of the Economics Division at the Competition Commission of India. Dr. Geeta Gouri is a former Member of the Competition Commission of India. Prof. Harpreet Kaur is a Professor of Law and the Registrar of National Law University, Delhi. Mr. Ram Kumar Poornachandaran is a Partner at AZB & Partners. Mr. Yaman Verma is a Partner at Shardul Amarchand Mangaldas & Co.
10:09 AM: The final rounds have begun with the team from Army Institute of Law, Mohali presenting their arguments as Appellants. The first speaker for the Appellants begins with the first issue relating to jurisdiction. The speaker starts by citing the case of CCI v. Bharti Airtel, to argue that the sectoral regulator in the instant case i.e., TRAI should be given primacy in jurisdiction over the Competition Authority. The researcher assists the speaker by sharing the relevant paragraphs from the case compendium for the judges’ convenience. Before moving on to the second issue, the judges ask few questions and these are tackled skillfully and swiftly by the counsel!
Final Rounds
10:20 AM: The judges are grilling the counsel on the legal aspects but he remains unfazed and answers the questions to the satisfaction of the judges. Dr. Geeta Gouri raises a pertinent question regarding necessity to look into the relevant market when discussing the issue surrounding the licensing arrangement.
10:40 AM: The counsel uses a pie chart to explain the market division in the automobile industry. The counsel argues that Eitri does not hold a dominant position in the relevant market. The counsel also argues that even if Eitri is found to be dominant, it has not abused its dominant position and that it has not employed predatory pricing. The counsel concludes and passes the baton to his co-counsel.
Final Rounds
11:05 AM: The second speaker takes the podium and starts presenting the arguments. The first issue that he deals with is whether Eitri has violated Section 3(4)(c) of the Competition Act, 2002. The speaker argues that the agreement between Eitri and Ultron does not impose an absolute restriction, and thus, is not violative of Section 3(4)(c). After a bout of questions from the judges, the counsel concedes that the JV does put a restriction, however, such restriction is reasonable.
11:30 AM: The speaker contends that Eitri is not dominant in the relevant market since the requisite thresholds are not met. Herein, Mr. Yaman Verma asks whether the market dominance of Ultron would be relevant while analysing a possible violation of Section 3(4), given that Ultron is the sole supplier of 8G UHF and the exclusive supply agreement with Eitri, proscribes other competitors to enter the market.
11:40 AM: Ms. Payal Malik asks the speaker to address the issue of whether there is distribution agreement between Eitri and Ultron, and whether there is any verticality i.e., whether Ultron and Eitri operate in the same level of production or not. The speaker answers that there is no verticality between the parties and cites relevant authorities.
11:48 AM: The Appellants after concluding their arguments on the fourth issue vis a vis violation of Section 3, rest their case. The Respondents have begun now.
11:50 AM: Speaker 1 starts with requesting the researcher to share the memo, and explaining the issue division. Speaker 1 begins with Issue 1 dealing with jurisdictional tussle between TRAI and NFTC. He starts by laying down the factual matrix relevant to his argument.
11:55 AM: Beginning with the first leg, the speaker submits that the Bharti Airtel case will not be applicable to the present case as issues before the Competition Authority and Telecom Regulator were inherently different. Ms. Payal Malik questions the speaker regarding necessity of delineating relevant market in this issue to which he answers that relevant market is of no consequence to the issue at hand.
Final Rounds
12:10 PM: Ms. Geeta Gouri asks whether TRAI has the right to intervene in a licensing decision to which the speaker answers that the question would be discussed in detail by the second speaker. The speaker goes on to argue that principle of sub-judice will not be applicable, and relies on Steel Authority of India v. CCI case, and submits that the proceedings before TRAI are administrative, and not judicial or quasi-judicial in nature.
12:20 PM: Moving to Issue 4, the speaker relies on the Flashlights case and contends that there is a violation of Section 3 in the instant case. Ms. Payal Malik then questioned the speaker on the standard of evidence being presented and whether Whatsapp chats and emails are admissible. The speaker swiftly answered this question by stating that when we combine electronic and circumstantial evidence, that suffices to make it admissible. The speaker asks for extension of time, which is granted by the bench. Prof. Harpreet Kaur asks for a clarification on whether the effect of the JV on customers needs to be looked into to figure out pro -competitiveness. The Speaker answers stating that based on rule of reason under Section 19(3), benefits to customers needs to be examined, and states that there is no benefit accruing to consumers. The speaker then summarises his arguments and passes the baton to his co-counsel.
Final Rounds
12:40 PM: The Counsel starts by presenting arguments on Issue 2, which pertains to whether there is a violation of Section 3(4) of the Competition Act. Ms. Payal asks the speaker to provide the bench with precedents wherein there was no absolute restriction and reasonability of restriction was determined. The Speaker is also questioned on whether there was any other player in the market which had the capabilities of harnessing 8G for remote charging when the investigation was carried. The speaker states that there is no mention of presence of other competitors in the Proposition.
12:50 PM: Speaker 2 starts with Issue 3, which deals with abuse of dominance. First, the speaker states that in the electric automotive industry, the very fact that Eitri’s market share is over 50% shows that they are the dominant player. This Counsel submits that this coupled with the fact that there is dependence of consumers on Eitri helps in establishing dominant position. The speaker cites the Hindustan Coca Cola Beverages case to argue that high level of vertical integration leads to high level of dependence. Second, the speaker states that by application of the essential facilities doctrine, one cannot refuse access to an essential facility to other competitors and that in this case, the 8G facility is an essential facility, which is impossible to replicate because it is a completely different network spectrum. Concluding her arguments, the speaker submit that Sections 3 and 4 of the Competition Act have been violated by Eitri.
1:00 PM: REBUTTAL – The Speaker from the side of the Appellant states that the Respondents were unable to prove why the ratio of Bharti Airtel case will be inapplicable in the present case. The Speaker also states that the Respondents were unable to show how the JV was not efficient, other than the cost factor. The Counsel concludes on the note that market share alone is not sufficient for proving dominance.
SURREBUTTAL – The Speaker from the side of the Respondent address all the points raised in the Rebuttals. With respect to dominance, they state that apart from market share, there are other factors as well, such as vertical integration by Eitri and dependence of consumers.
Final Rounds
With this, we come to the conclusion of the Final Rounds of the 13th NLU Antitrust Law Moot Court Competition, 2022. What an engaging session it has been, with the judges asking interesting and pertinent questions, to test the knowledge and the depth of research undertaken by the parties. The Results will be announced in the Valedictory Ceremony, which will commence at 3:00 PM today. We look forward to seeing you there!
3:00 PM – Valedictory Ceremony
The moment you all have been waiting for is finally here! After months of research, practice, and hard work, the winning team gets to take it all! The following are participants that have emerged victorious at the rounds!
Winning Team: Team 006 (Army Institute of Law, Mohali) Runners-Up Team: Team 017 (NLIU, Bhopal) Best Memoranda: Team 009 (NLU, Odisha) Best Student Advocate: Palak Jagetia (RMLNLU) Second Best Student Advocate: Swechchha Singh (RMLNLU) Best Student Advocate of the Finals: Ranjul Malik (Army Institute of Law, Mohali)
Valedictory Ceremony
This marks the conclusion of the 13th NLU Antitrust Law Moot Court Competition, 2022. This edition of the Anti-trust Moot Court Competition was like none other before! It had us tackling new challenges on almost every front. With this edition, we reached a new milestone and were able to livestream the Final Rounds on Youtube for all viewers! The successful completion of the event, leaves us wishing we had the warm opportunity of hosting the judges and the teams on campus. We hope that during the course of the Competition, the participants found chances to grow, and developed fondness for the law. At the end of these three days, we sincerely hope that we have been able to deliver the expectations that the participants and the judges had from us. See you all next year, but hopefully not virtually!
Competition Commission of India (CCI): Noting that in respect of cases concerning cartels that are hidden or secret, there is little or no documentary evidence and may be quite fragmentary, Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) imposed penalties on 7 entities and signages for bid-rigging activities and cartelization with respect to the supply of signage for branches, offices and ATMs of State Bank of India.
Factual Matrix
Present matter was taken up by the Commission suo motu pursuant to a complaint received alleging bid-rigging and cartelization in the tender floated by SBI Infra Management Solution (P) Ltd. for the supply and installation of new signages/replacement of existing signages for branches/offices/ATMs of SBI located at specified metro centres of various circles of SBI across India.
With the object of distorting the fair bidding process, certain bidders were coordinating and fixing the prices of their services as well as allocating the market amongst themselves.
As per Commission’s prima facie view, case of contravention of the provisions of Section 3(1) read with Section 3(3) of the Act was made out with respect to the Impugned Tender. Hence, DG was directed to investigate.
DG had concluded that the OP indulged in anti-competitive agreement/conduct and concerted practices to rig the Impugned Tender, as well as geographically allocated amongst themselves the circles for which the tender was issued, thereby contravening the provisions of Sections 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. The DG also identified certain individuals of the OPs to be liable in terms of Section 48 of the Act.
Conclusion
An ‘agreement’ as given in Section 2(b) of the Act, requires, inter alia, any arrangement or understanding or action in concert, whether or not formal or in writing or intended to be enforceable by legal proceedings.
Definition under Section 2(b) of the Act covers even those situations where the parties act on the basis of a nod or a wink.
Further, it was observed that there is rarely direct evidence of action in concert, Commission must determine whether those involved in such dealings had some form of understanding and were acting in co-operation with each other.
“Since the prohibition on participating in anti-competitive agreements and bid rigging and the penalties which the infringers may incur are well-known, it is normal for such practices and agreements to take place in a clandestine fashion, for meetings to be held in secret and for associated documentation to be reduced to a minimum.”
Commission held that OP-1 to OP-7 had entered into an agreement resulting in geographical market allocation as well as bid-rigging in the Impugned Tender.
“…cartelisation, including bid-rigging, is a pernicious form of competition law contravention.”
Additionally, Coram also added that, any collusive or concerted conduct amongst competitors by way of exchange of commercial information resulting in inter alia determining price or geographical allocation of provision of services etc., itself stands captured within the prohibition imposed and is presumed to have AAEC, by virtue of provisions of Section 3(1) of the Act read with Section 3(3).
Liability under Section 48
Commission held that it is no longer res integra that the Commission can simultaneously proceed against individuals of a company under Section 48 of the Act along with the company and the same has been settled by various decisions of the Courts.
Section 48(1) of the Act is a deeming provision, which implies that when contravention of any provision of the Act (say Section 3) is committed by a company, then, an individual(s) who was in-charge of and responsible to the company for the conduct of its business at the time of contravention, shall be deemed to be guilty of such contravention.
Section 48(2) of the Act, all individuals that play an active role in the illegal conduct of a company, are made liable in addition to the company.
Commission decided to impose penalty @1% of the average of individual’s incomes, for the three financial years. Though Commission decided to grant to OP-4 and its individuals, the benefit of reduction in penalty by 90% (per cent) in terms of Regulation 4(a) of the Lesser Penalty Regulations.
Lastly, the Coram directed entities/persons to deposit their respective penalty amounts within 60 days of the receipt of the present order.[Alleged anti-competitive conduct by various bidders in supply and installation of signages at specified locations of State Bank of India across India, In Re., 2022 SCC OnLine CCI 16, decided on 3-2-2022]
Advocates before the Commission:
For Diamond Display Solutions Pvt. Ltd. and its individuals:
Mr. Rajshekhar Rao, Senior Advocate with Ms. Ameyavikrama Thanvi and Mr. Siddharth H. Raval, Advocates and Mr. R.G. Venkatesh (in-person)
For AGX Retail Solutions Pvt. Ltd and its individuals:
Ms. Shivanghi Sukumar, Advocate, Mr. Arjun Reddy and Mr. Ritanshu Mohan (both in-person)
For Opal Signs Pvt. Ltd. and its individuals:
Mr. Anandh Venkatramani, Advocate and Mr. Ramesh Bharadwaj (in-person)
For Avery Dennison India Pvt. Ltd. and its individuals:
Mr. Rudresh Singh, Advocate
For Amreesh Neon Pvt. Ltd. and its individuals:
Mr. Anjaneya Mishra, Advocate
For Macromedia Digital Imaging Pvt. Ltd. and its individuals:
Mr. Rajshekhar Rao, Senior Advocate with : Mr. Nithin Chowdary Pavuluri, Advocate and Mr. Naresh Kumar Dasari (in-person)
Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members), noted allegations against Star India for providing a bouquet of channels at lesser prices resulting in denying of market access and also amounting to unfair pricing.
Background
Informant had filed information under Section 19(1)(a) of the Competition Act, 2002 against Star India (P) Ltd. (OP 1), Disney Broadcasting (India) Limited (OP 2) and Asianet Star Communications Private Limited (OP 3) alleging, inter alia, contravention of the provisions of Sections 4 of the Act.
Further, the informant was stated to be a Multi-System Operator engaged in the business of providing digital TV services, predominantly in Kerala. It also operated in Karnataka, Andhra Pradesh, Telangana and Odisha. Informant provides digital TV services to its customers directly as well as through Local Cable Operators (LCO) and currently provides services to about 10.02 lakh customers in Kerala and a minimal 1.19 lakh customers in all other States combined.
OP 2 was a broadcaster of satellite-based TV channels in India, having multiple channels of different languages and various genres including general entertainment, movies, kids’ entertainment, sports and infotainment.
As per the business arrangement, informant received broadcasting signals from OP-1 for a monetary consideration for the purposes of supplying the channels of OP-1 to customers and for that the informant entered into agreements with OP-1 from time to time.
Allegation
Informant alleged the abuse of dominant position by OPs by discriminating the informant in not extending the discounts, which are offered by its competitors.
Hence, offering discriminatory discounts was alleged to be in contravention of the provisions of Section 4(2)(a)(ii) of the Act being unfair/discriminatory prices, as also the provisions of Section 4(2)(c) as it denied market access to the informant as well due to the inability of the Informant to compete in the downstream market of the distribution of TV channels given the unfair advantage OP-1 had conferred upon the informant’s competitors.
After the introduction of the New Regulatory Framework, ADNPL started losing subscribers to Kerala Communicators Cable Limited (KCCL) as the latter offered low prices to LCOs who, in turn, offered lower prices to subscribers.
In gist, the informant alleged that OP-1 was in a dominant position on account of its significant market share, size and economic resources since it was a part of the global media conglomerate, dependence of consumers and its countervailing power. The said conduct violated provisions of Section 4(2) (a) (ii) of the Act and Section 4(2) (c) thereof since the discriminatory discounts amount to unfair/discriminatory price and denied market access to the Informant as it was unable to compete in the downstream market of distribution of TV channels considering the unfair advantage of OP-1 had conferred upon ADNPL’s competitor KCCL.
Analysis and Decision
The Commission observed that the crux amongst all the allegations was the offering of additional discounts to select MSOs and the main competitor of ADNPL in Kerala, viz KCCL, OP-1 had placed the MSOs at a huge disadvantage which was detrimental to the competition and competitors in the market.
Coram noted that the OP-1 had around 50 entertainment channels and over 15 sporting channels with exclusive content of the major sporting events such as ICC, IPL, ODIs, Wimbledon, French Open etc. making access to its bouquet of channels indispensable for any MSO operator, especially when some of the most popular as per TRPs, regional and nationwide channels belonged to the OPs.
OP-1 enjoyed a position of dominance in the relevant market.
KCCL was getting channels at about 30% of the MRP with about 70% discount whereas the maximum permissible discounts under the New Regulatory Framework was capped at 35%. OP 1 was alleged to have chosen an indirect way to provide discounts to circumvent the new Regulatory Framework by way of promotion and advertisement payments to KCCL through high valued advertising deals.
In view of the above, the Informant was constrained to price its channels at a higher price than that of KCCL and ultimately pay the price by losing consumers consistently whereas KCCL had gained new consumers.
Ultimately, the informant was offering services at loss making price just to prevent the subscriber base from migrating to KCCL’s services but in vain.
Due to the alleged discriminatory conduct of price discrimination between different MSOs and OP-1 resulted in significant loss in the consumer base of the informant and therefore, prima facie appeared to be a violation of the provisions of Section 4(2)(a)9ii) of the Act as also in contravention of the provisions of Section 4(2)(c) of the Act due to discriminatory pricing and denial of market access.
Therefore, alleged discriminatory conduct of price discrimination between different MSOs of OP-1 resulted into significant loss in the consumer base of the Informant and therefore prima facie appeared to be in violation of provisions of Section 4(2)(a)(ii) of the Act as also in contravention of the provisions of Section 4(2)(c) of the Act due to discriminatory pricing and denial of market access respectively.
Commission directed DH to cause an investigation in the above matter. [Asianet Digital Network (P) Ltd. v. Star India (P) Ltd., 2022 SCC OnLine CCI 5, decided on 28-2-2022]
State commission disallows benefit of increase in the tariff based on the change in law provision; Tribunal directs reconsideration
A Coram of R.K. Gauba (Officiating Chairperson) and Sandesh Kumar Sharma (Technical Member) decided on an appeal which was filed by Solar Power Project Developer (“SPD”) assailing order passed by respondent Bihar Electricity Regulatory Commission (“the State Commission”) disallowing the benefit of increase in the tariff based on the change in law provision with respect to increased Operation and Maintenance (O&M) costs of its 10MW solar power generating system.
AFT grants war injury pension to soldier who sustained injuries resulting in disability during Operation Hifazat
The Bench of Justice Dharam Chand Chaudhary (Member J) and Vice Admiral HCS Bisht (Member A), granted war injury pension to the ex-serviceman who had sustained injuries resulting in disability during Operation Hifazat.
Arbitral Tribunal finds SJDA at fault; directs to refund bid amount of Rs 84.24 crores to the claimant in New Township Project
“No permission for conversion of land was obtained and, therefore, even if all other conditions were fulfilled, the Claimant-Developer could not have commenced construction activities on the agricultural lands without obtaining conversion of land use.”
Apple charging a commission of up to 30% on all payments made through its in-app purchase system, is a violation of its dominant position? CCI orders investigation
“Some consumers may have preference for closed ecosystem like Apple and others may have a preference for open ecosystems like that of Google.”
Why did CCI suspend the Amazon-Future deal? Detailed analysis of CCI order imposing Rs 202 crores penalty on Amazon
“Amazon had misled the Commission to believe, through false statements and material omissions, that the Combination and its purpose were the interest of Amazon in the business of FCPL.”
Is Google abusing dominant position in news aggregation? CCI gives prima facie findings; discusses Snippets, Mirror Image Websites, Paywall Options, etc.
“Google appears to operate as a gateway between various news publishers on the one hand and news readers on the other. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavourable to their revenue generation.”
Customs Excise & Service Tax Appellate Tribunal (CESTAT)
“Obiter dictum” not legally binding as precedent; jurisdictional commissioner cautioned for filing frivolous applications
Suvendu Kumar Pati (Judicial Member) dismissed an appeal which was filed in response to the order passed by this Tribunal for rectification of mistake on the ground that the order to the extent of availment of service of outdoor catering was not proper.
Jurisdiction for claim of refund filed/initiated to be dealt under the provision Central Excise law and not by the provision of CGST law
Ashok Jindal (Judicial Member) dismissed the application filed by the Revenue (CCE & ST, Panchkula) for ratification of mistake in a final order by the Tribunal which was noticed by the Applicant. The Tribunal dealt with two issues (a) whether to ratify previous order & (b) to deal with the jurisdiction
Is there any provision under Cenvat Credit Rules, 2004 or Finance Act, 1994 for reversal of CENVAT credit for services provided for which no consideration is received by an assessee? CESTAT analyses
“CENVAT Credit Rules or Finance Act there was no provision for reversal of CENVAT credit for the services provided for which no consideration for service provided was received by an assessee.”
District Consumer Disputes Redressal Commission, Kolkata
Consumer cannot be forced to pay “service charge” in a restaurant: Consumer Forum finds conduct of restaurant contrary to principles of Consumer Protection Act
“The OPs must have been aware of the guidelines of Fair Trade Practice related to changing of service charge from the consumers by hotels/restaurant issued by Department of Consumer Affairs, Government of India, inter alia, stipulating that service charge on hotel and restaurant bill is “totally voluntarily” and not mandatory.”
If lessee is not actual owner of property, can actual rental expenses be claimed on return of income? ITAT decides
“The assessee-company has merely taken the assets on lease from the owner, and it is accordingly eligible to claim actual rental expenses in the return of income.”
Can merely disowning bank accounts exempt assessee from paying tax? Read why ITAT approved addition of Rs 12.81 Crores under S.68 of Income Tax Act
“Merely disowning the bank accounts by the assessee does not lead to the conclusion that the accounts are not maintained by him when there is a direct evidence contrary to the contention of the assessee.”
National Consumer Disputes Redressal Commission (NCDRC)
Homebuyers cannot be expected to wait indefinitely for taking possession: NCDRC allows consumer complaint against Builder, directs refund, imposes costs
Commission dealt with a complaint filed under Section 21 read with Section 2(c) of the Consumer Protection Act, 1986 by the complainant in respect of a plot allotted to him promoted by the OP, claiming deficiency of service due to delay in handing over possession of the plot allotted and claiming refund of amount deposited with compensation.
Insurer refuses to issue insurance policy as Risk Confirmation letter obtained on concealment of material fact by Insurance Broker: Policy will be vitiated? NCDRC answers
“Section 19 of Contract Act, 1872, provides that when the consent of an agreement is caused by coercion, fraud, or misrepresentation, the agreement is voidable at the option of the party whose consent is so caused.”
Plastic pieces found in slices of bread, but compensation denied to consumer. Read why NCDRC set aside State Commission’s order of compensation
Ram Surat Maurya (Presiding Member) addressed a matter wherein Britannia was alleged to have pieces of plastic in its bread, but the complainant failed to prove that the bread was manufactured by the said company.
Minor treated for “Measles” instead of “Stevens-Johnson Syndrome” due to wrong diagnosis and leading to medical negligence: Read detailed report on NCDRC’s decision
“The patient at her young age of 12 years suffered very serious and potentially fatal SJ syndrome. It was the patient’s sheer good luck that she survived in spite of such grossly inappropriate/inadequate treatment at every stage.”
Is it proper for NCLT to record finding regarding default when RP is yet to consider it and submit report? NCLAT discusses Ss. 95, 97, 99 IBC
“…there cannot be any dispute with the statutory scheme as contained in Section 97 that when application is filed by the Resolution Professional under Section 95, the Adjudicating Authority shall direct the Board within seven days of the date of the application to confirm that disciplinary proceedings pending against the Resolution Professional or not and the Board was required within seven days to communicate in writing either confirming the appointment of the Resolution Professional or rejecting the appointment of the Resolution Professional and nominating another Resolution Professional.”
Aggrieved with the categorisation as ‘unsecured creditor’, Tribunal secures ‘secured creditor’, having relinquished the security interest
The Coram of Ashok Bhushan J, (Chairperson), and Dr Alok Srivastava (Technical Member) while accepting the appeal and rejecting the claim of the respondent, the Tribunal was of the opinion that the Adjudicating Authority committed an error in rejecting the claim of the appellant to be ‘secured creditor’.
Is approval with 90% vote of CoC required before allowing withdrawal of CIRP application even where CoC was not yet constituted? NCLAT clarifies law on S. 12-A IBC
“…when the application is filed prior to the constitution of Committee of Creditors, the requirement of ninety percent vote of Committee of Creditors is not applicable and the Adjudicating Authority has to consider the Application without requiring approval by ninety percent vote of the Committee of Creditors.”
Dominant position and Predatory Pricing or Win-Win for riders and drivers? NCLAT upholds CCI’s decision
“We do not think that Ola could operate independently of other competitors in the relevant market, and hence it did not enjoy a dominant position in the market.”
Once Adjudicating Authority approves Resolution Plan, does it still remains a confidential document? Read what NCLAT says
“The category of creditors including the Members of the suspended Board of Directors or the partners of the corporate persons, who are entitled to participate in the meeting of the Committee of Creditors are entitled to receive copies of all documents.”
Rampant noise pollution, incessant use of horns; a Deplorable state of affairs! NGT finds Rajasthan in contempt of Supreme Court’s order
While addressing the issue of pressure/air horns and motor vehicles being driven with intolerable sound in Rajasthan, the Bench comprising of Justice Sheo Kumar Singh (Judicial Member) and Dr. Arun Kumar Verma (Expert Member) found the State of Rajasthan in contempt of the Supreme Court’s order and issued notice to the state government to reply within three weeks.
Twitter, Telegram and the tattered chances-Illicit act of swindlers recommending stock tips on social media; Tribunal acts immediately
“The tips circulated through the Channel create an inducing impact which are then followed by the subscribers and ironically, such stock tips may also prove to be true, if large number of recipients of such tips believe it and collectively act on it. Slowly and gradually, after seeing the price of the said thinly traded scrip actually rising, more and more subscribers start believing in the tips and start acting on it, which further strengthens the belief of such tips being genuine, as large number of individuals end up acting on such tips and by their collective buying actions, convert the deceitful, specious and baseless tips to realty”
‘Billionaire’ dream turns into dread-Unauthorsied investment advisory amounted to fraud & misrepresentation
S.K. Mohanty, Whole Time Member while affirming an ex-parte interim order of SEBI, was of the view that the activities of the Noticees, Billionaire Solutions Pvt. Ltd. (Sole proprietor Akash Jaiswal) was covered within the definition of “fraud” defined under regulation 2(1)(c) of the PFUTP Regulations, 2003. And therefore was held liable for the violation of provisions of Section 12A (a), (b), (c) of the SEBI Act, 1992, Regulations 3 (b), (c) & (d), 4(1), 4(2)(k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations, 2003).
Competition Commission of India (CCI): On finding merit in allegations of news publishers’ Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) expressed that,
Google appears to operate as a gateway between various news publishers on the one hand and news readers on the other. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavourable to their revenue generation.
Digital News Publishers Association (Informant) filed the present information under Section 19(1)(a) of the Competition Act, 2002 against Alphabet Inc., Google LLC, Google India Private Limited and Google Ireland Limited (referred to as ‘Google’/OPs’) alleging violation of Section 4 of the Competition Act.
Trajectory of the Facts
Informant averred that its members have endeavored to provide credible and fact-checked news, which is the bedrock of any democracy.
Further, as per the Informant, the majority of the traffic on news websites comes from online search engines (more than 50%), wherein Google is claimed to be the most dominant search engine. Based on the same, the Informant averred that more than 50% of the total traffic on the news websites is routed through Google and, being the dominant player in this field, Google, by way of its algorithms, determines which news website gets discovered via search.
Informant contended that Google not only has a monopolistic position in search in India, it has also a very strong position in advertising intermediation and controls/retains the major share at each level.
Adding to the above facts, informant stated that Google was the major stakeholder in the digital advertising space, and it unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid.
The dependency of the customer on Google is also stated to be a well-known fact.
Hence, the OPs abused their dominant position in the market and violated provisions of Section 4 of the Competition Act, 2002.
Analysis and Discussion
The essence of the allegations noted by the Commission was the impugned conduct of Google, resulting in denial of fair share in the digital advertising revenue to news publishers and disclosure of inadequate information to reach a fair settlement.
Further, digitalization of the economy has resulted in higher spending on digital advertising, increasing the dependence of the news publishers on digital advertising.
It was noted that the informant was aggrieved by the denial of fair advertising revenue to its members resulting from the abuse of its dominant position by Google.
Commission in Google Search Bias case held that Google is dominant in both relevant markets, i.e., market for online general web search services and market for online search advertising services in India.
In relation to the dependence of news publishers on Google, it was averred that Google’s search engine results were a prominent source of online traffic to news website publishers. The said fact was corroborated from the traffic data accessed from similarweb.com, which indicated that search engines generate 25% to 77% (depending on the publisher) of the total traffic to news publisher websites. Hence, the discoverability for news publishers appeared to be dependent on search results from Google.
Commission prima facie opined that Google was dominant in both the relevant markets, i.e. market for online general web search services and market for online search advertising services in India.
Coram noted that Google displays news content (a) on its search engine page(s) in the form of general/organic search results, i.e., Google Search, as well as through (b) its news aggregator vertical, i.e., Google News. In response to a search query related to news items, in addition to organic results, Google also displays a ‘Top Stories’ carousel on its search engine result page.
Further, Google provides a news tab on Google Search, which groups news articles related to the search query. The news tab displays the title of the news article, an excerpt from the article, the thumbnail as well as the publisher’s name.
Google displays news content in a variety of ways through hyperlinks, thumbnails, extracts, etc. These hyperlinks, when clicked, take the users to the websites of the respective news publishers. Such access by the users allows the news publishers to monetize their content by offering advertising space on their websites to potential advertisers.
The Commission stated that it cannot deny that by virtue of its position of strength of its vertically integrated ecosystem which covers not only the markets of Online General Web Search Services and Online Search Advertising Services but also the online digital advertising intermediation services, Google appears to be a preferred service provider to publishers wanting to offer search and advertising services on their websites.
Further, the Coram prima facie was satisfied that based on the global presence of Google, it can be reasonably inferred that Google occupies a significant position in the market for online digital advertising intermediation services as well and investigation would bring out the said aspects in detail.
What appears from the above trajectory?
It appeared that the news publishers are dependent on Google for the majority of the traffic, which makes Google an indispensable trading partner for news publishers.
Prima facie, it appeared that news publishers have no choice but to accept the terms and conditions imposed by Google.
Google appears to operate as a gateway between various news publishers on the one hand and news readers on the other. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavourable to their revenue generation.
The alleged opacity on critical aspects such as data and audience management practices, or generation and sharing of revenue with publishers, exacerbates the information asymmetry and is prima facie prejudicial to the interest of publishers, which, in turn, may affect the quality of their services and innovation, to consumer detriment.
Hence, the imposition of such unfair conditions as well as price by Google in the provisions of its various services was prima facie violation of Section 4(2)(a) of the Act.
Snippets on Google
It needs to be examined whether the use of snippets by Google is a result of the bargaining power imbalance between Google on the one hand and news publishers on the other, and whether it affects the referral traffic to news publisher websites, and thus, their monetization abilities.
Coram expressed that in a well-functioning democracy, the critical role played by news media cannot be undermined, and it needs to be ensured that digital gatekeeper firms do not abuse their dominant position to harm the competitive process of determining a fair distribution of revenue amongst all stakeholders.
Therefore, the alleged conduct of Google appeared to be an imposition of unfair conditions and price which prima facie was a violation of Section 4(2)(a) of the Act.
Mirror image websites
The alleged issue with regard to publishers being forced to build mirror-image websites using the AMP format, with Google caching all articles and serving the content directly to mobile users, can have revenue implications for the publishers.
Paywall Options
Since Google restricts paywall options unless publishers rebuild their paywall options and their meters for AMP, which may amount to an unfair imposition on publishers, the said aspects would be suitably examined during the investigation.
Further, it also needs to be examined whether Google imposes any discriminatory condition or price on various news publishers, which would violate Section 4(2)(a) of the Act.
Therefore, in Commission’s opinion, prima facie, Google violated the provisions of Section 4(2)(a) of the Act, which merits investigation and the informant also alleged that Google’s conduct has also violated the provisions of Section 4(2)(b)(ii) as well as Section 4(2)(c) of the Act.
DG can appropriately examine the above-stated.
Google using its dominant position in the relevant markets to enter/protect its position in the market for news aggregation services in violation of Section 4(2)(e) of the Act also needs detailed investigation.
Commission took note of the development in some countries such as France and Australia, as referred by the Informant, that Google has been asked to enter into fair/ good faith negotiation with news publishers for paid licensing of content to address the bargaining power imbalance between the two and the resultant imposition of unfair conditions by Google.
Therefore, Commission was satisfied that a prima facie case was made out against the alleged conduct of Google, which merits an investigation. [Digital News Publishers Assn. v. Alphabet Inc., 2022 SCC OnLine CCI 1, decided on 7-1-2022]
Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) in view of a deliberate design on the part of Amazon to suppress the actual scope and purpose of the Combination, levied the maximum penalty of INR One Crore each under the provisions of Sections 44 and 45 of the Competition Act. Due to failure to notify combination under Section 6(2) of the Act, Section 43A of the Act, a penalty was imposed.
Purpose of this Order
The present order shall govern the disposal of the proceedings initiated against the Amazon.com NV Investment Holdings LLC (Amazon) under Sections 43A, 44 and 45 of the Competition Act, 2002 in relation to its acquisition of 49% shareholding in Future Coupons Private Limited (FCPL) in pursuance of the show cause notice based on application dated 25-3-2021 of FCPL.
CCI had approved the Combination under Section 31(1) of the Act upon competition assessment of the overlapping business activities of Amazon, FCPL and their group entities and after arriving at the opinion that the Combination is not likely to cause any appreciable adverse effect on competition in India.
Initiation of proceedings under Sections 43A, 44 and 45 of the Act
FCPL filed an application stating that Amazon had initiated arbitration proceedings in relation to transfer of assets of FRL, a company in which FCPL holds 9.82% of the shareholding and there are related litigations pending before the constitutional courts.
It was alleged that Amazon took completely contradictory stands in the arbitration proceedings and constitutional courts with respect to its investments in FCPL as compared to the representation and submissions made before the Commission. Such contradictions were said to establish false representation and suppression of material facts before the Commission.
Commission was of prima facie view that
(a) Amazon failed to identify and notify FRL SHA as a part of the Combination, in terms of Regulation 9(4) and Regulation 9(5) of the Combination Regulations;
(b) Amazon had concealed its strategic interest over FRL; and
(c) Amazon had made false and incorrect representations and concealed/suppressed material facts in contravention of the provisions of the Act.
In view of the above, Commission issued SCN under Sections 43A, 44 and 45 of the Act to Amazon, on 4th June, 2021.
Commission received a letter on 20-10-2021 from Amazon inter alia intimating that it has shared with Future Group, the Response to SCN and related correspondence with the Commission.
Later, Commission decided to hear both FCPL and Amazon on 4-1-2022.
Question for Consideration:
Whether alleged conduct (s) of Amazon is in contravention of the provisions of Sections 43A, 44 and 45 of the Act?
Whether Amazon has made misrepresentation, false statement or suppression/concealment of material facts in relation to the scope and purpose of the Combination and failed to identify and notify FRL SHA as an inter-connected part of the Combination, in terms of Regulations 9(4) and 9(5) of the Combination Regulations?
Analysis and Discussion
Commission noted the contract summary and internal e-mail dated 19th July, 2019 of Amazon Group with the subject ‘Request for APPROVAL for Project Taj [Future]…’, which elaborated the business summary and summary of key terms of the Combination (Approval Request). This e-mail was sent by Mr Rakesh Bakshi to Mr Jeff Bezos, seeking approval to sign definitive documents in relation to the Combination.
As per the internal communications and negotiations between the parties relating to the Combination, wherein Amazon initially planned to partner with Future Group, being a key player in the offline retail market, by acquiring 9.99% shareholding in FRL as well as entering into a business commercial framework to build and accelerate ultra-fast delivery services across the top-20 cities in India, leveraging the national footprints of Future Group.
The Approval Request dated 18th July, 2019 suggests that, in view of certain developments relating to foreign investments in India, instead of directly acquiring 9.9% shareholding in FRL, Amazon would use a twin-entity investment structure to invest in FRL i.e., Amazon would acquire 49% shareholding in FCPL which, in turn would hold 8 – 10% of the shareholding in FRL.
Coming to the Notice, it required the notifying party to disclose ‘Economic and Strategic purpose (including business objective and rationale for each of the parties to the combination and the manner in which they are intended to be achieved) of the Combination’.
Further, the Internal Correspondence of Amazon made it abundantly clear that Amazon was all along focussed/interested in FRL. The Internal Correspondence of Amazon did not speak about the business potential of FCPL, as had been claimed and projected in the Notice and in the responses to the letters of the Commission. Similarly, the Notice presented the rationale of indirect rights over FRL, as protection to investment in FCPL.
The expressions used by Amazon to describe the rationale behind the indirect rights over FRL varied from time to time: ‘strategic rights’ in its Internal Correspondence; ‘protection to investment in FCPL’ in the Notice given to Commission; and ‘rights derived from FRL SHA are to protect the interest of the investor [Amazon]’ in the response to SCN.
Commission observed that, in every case of investment, the acquirer would want to protect the value of its investment and the returns.
The purpose of securing strategic interest over FRL and commercial partnership with FRL is much different from FRL, a company with strong financials and futuristic outlook, being merely taken as an element of financial strength and protection to the investment in FCPL.
How has the Suppression of fact continued?
The Internal Correspondence of Amazon clearly showed different purposes for envisaging the Combination (i.e., ‘foot-in-door’ in the Indian retail sector, secure rights over FRL that are considered as strategic by Amazon and Commercial Arrangements between the retail business of Future Group and Amazon).
Amazon in its responses to the letters of the Commission, continued to suppress the actual purpose of the Combination. It was obvious that the purpose of Amazon to pursue the Combination was not the potential of the gist and loyalty card business of FCPL, as had been claimed in the Notice. Rather, FCPL was envisaged only as a vehicle in the Combination to which no value or purpose is ascribed in the Internal Correspondence.
In Commission’s opinion the present matter was a clear, conscious and wilful case of omission to state the actual purpose of the Combination despite the disclosure requirement under Item 5.3 of Form I read with Regulation 5 of the Combination Regulations and Section 6(2) of the Act.
Amazon failed to provide any material or plausible explanation in its response to the SCN and in the subsequent submissions to demonstrate that its disclosures against Item 5.3 are correct and that business potential of FCPL was consideration for Amazon to pursue the Combination.
Adding to the above, Coram also stated that Amazon, in addition to the omission to state the purpose of the Combination, has misrepresented the Commission by stating that the purpose of the Combination is an opportunity arising from the business potential of FCPL and to add credibility to FCPL’s financial position, FCPL invested and proposed to further invest in FRL, a company with strong financials and futuristic outlook.
Amazon had misled the Commission to believe, through false statements and material omissions, that the Combination and its purpose were the interest of Amazon in the business of FCPL.
Further, the Coram added in respect to disclosure against Item 8.8 of Form I that, True and complete disclosure against Item 8.8 enables the Commission to determine the appropriate framework for competition assessment of the Combination.
In response to Item 8.8, Amazon had furnished a presentation titled ‘Taj Coupons – Business Plan for 5 years’. The eight- page presentation provides only a brief idea of the gift voucher business of FCPL, its business operating model, estimated five-year business size, organisation design, sales team and financial summary, without any reference to FRL.
Commission in view of the above stated that Amazon knowingly suppressed relevant and material documents to be furnished under Item 8.8. of Form I.
Hence, Commission held that the conduct of Amazon amounted to suppression and misrepresentation of the purpose of the Combination and the said was in contravention of the provisions contained n clauses (a) and (b) of Section 44 and clause (a) and sub-section (1) of Section 45 of the Act.
The conduct of Amazon in supressing relevant and material documents against the disclosure requirement under Item 8.8 of Form I is a contravention of clause (c) of sub-section (1) of Section 45 of the Act. Similarly, the rights over FRL that were considered as strategic in the Internal Correspondence of Amazon, were represented as mere investor protection rights. Such repeated assertions, contrary to their actual purport, amount to statements that are false in material particular, in contravention of the provisions contained in clauses (a) and (b) of Section 44 and clause (a) of sub-section (1) of Section 45 of the Act.
Whether FRL SHA was identified and notified as an inter-connected part of the Combination?
In the present matter, Combination was a composite of acquisition of shares, rights and commercial contracts. These together were for the purpose of strategic alignment amongst the business of the parties, in particular to expand the ultra-fast delivery service of Amazon.
The fact that FRL SHA was part of the Combination and was executed at the behest of Amazon, was overwhelmingly evident from the email dated 4-1-2019 of Amazon to Future Group. Commission observes that mere consideration of the values of the asset and turnover of FRL cannot be considered as notification of FRL SHA and BCAs, as parts of the Combination.
Coram stated that details of FRL SHA were not mentioned in Item 5.2. As has emerged now, FRL SHA and the commercial agreements were inter-connected parts of the Combination and accordingly, their details ought to have been disclosed against Item 5.1.2.
The Notice, nowhere disclosed the fact that FRL SHA was negotiated as part of the Combination and was executed for the purpose of Amazon acquiring rights over FRL, through FCPL SHA, and that Amazon had insisted for FRL SHA to be entered into as a prerequisite to Transaction III. In the absence this material fact being disclosed, footnote 3, read with the disclosures and statements in the Notice and subsequent submissions of Amazon, including those against Items 5.1.2 and 5.2 of Form I, statements made in paragraphs 34 of the Notice and paragraph 44 of the submission dated 15th November, 2019 (in response to the letter dated 9th October, 2019 of the Commission), the impugned statement was self-evidently misleading to the effect that FRL SHA was not a part of the Combination and is only pursuant to the Warrants Transaction.
CCI held that, the categorical statements that FRL SHA and BCAs were independent of the Combination sufficiently establish that the same were not notified to the Commission as a part of the Combination, which is a contravention of the obligation contained in Section 6(2) of the Act, which attracts penalty under Section 43A of the Act.
Coram noted that Section 6(2) of the Act requires any person proposing Combination ‘to give notice to the Commission in the form as may be specified…disclosing the details of the proposed combination’.
If a party conceals/suppresses and/or misrepresents to the Commission the scope and purpose of the Combination and obtains approval, the same would effectively amount to approval/consent having been obtained by way of fraud.
Therefore,
Amazon ought to have notified the combination, inter alia, consisting of the following inter-connected steps: (a) Transaction I; (b) Transaction II; (c) Transaction III; (d) FRL SHA for the purpose of acquisition of strategic rights over FRL through FCPL SHA; and (e) commercial agreements between Amazon and Future groups, for the purpose of establishing strategic alignment and partnership between Amazon Group and FRL as well as have a ‘foot-in-the-door’ in the India retail sector.
The Commission directed Amazon to give notice in Form II within a period of 60 days from the receipt of this order and till disposal of such notice, the approval granted vide Order dated 28-11-2019, in Combination, shall remain in abeyance.
Penalty
The Commission considers it appropriate to levy the maximum penalty of INR One Crore each under the provisions of Section 44 and Section 45 of Act. Accordingly, Amazon is directed to pay a penalty of INR Two Crore.
Due to failure to notify combination in terms of the obligation cast under Section 6(2) of the Act, Section 43A of the Act enables the Commission to impose a penalty, which may extend to one percent of the total turnover or the assets, whichever is higher, of such a combination. Accordingly, for the above-mentioned reasons, the Commission hereby imposes a penalty of INR Two Hundred Crore upon Amazon.[ Proceedings against Amazon.com NV Investment Holdings LLC under Sections 43A, 44 and 45 of the Competition Act, 2002, In Re., 2021 SCC OnLine CCI 71, decided on 17-12-2021]
Advocates before the Commission:
For Amazon: Mr. Gopal Subramanium and Mr. Amit Sibal, Senior Advocates with Mr. Anand S. Pathak, Ms. Sreemoyee Deb, Ms. Anubhuti Mishra and Mr. Rajat Moudgil, Advocates alongwith Mr. Rakesh Bakshi, Mr. Ankur Sharma, Ms. Ujwala Uppaluri and Ms. Hina Doon, representatives of Amazon
For FCPL: Mr. Harish Salve and Mr. Ramji Srinivasan, Senior Advocates with Mr. Raghav Shankar and Mr. Pranjit Bhattacharya, Advocates alongwith Mr. Sanjay Rathi, representative of FCPL
For CAIT: Mr. Krishnan Venugopal and Mr. Saurabh Kirpal, Senior Advocates with Mr. Rajat Sehgal and Mr. Debayan Gangopadhyay, Advocates
Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma, Bhagwant Singh Bishnoi (Members) directs the investigation in view of an alleged violation of provisions of the Competition Act.
The informant had filed the present information under Section 19(1)(a) of the Competition Act, 2002 against Apple Inc. (OP-1) and Apple India Private Limited (AIPL) alleging contravention of various provisions of Section 4 of the Act.
Informant alleged that Apple uses a barrage of anti-competitive restraints and abuse of dominant practices in markets for distribution of applications (‘apps’) to users of smart mobile phones and tablets, and processing of consumers’ payments for digital content used within iOS mobile apps (‘in-app content’).
Further, it was added that Apple imposes unreasonable and unlawful restraints on app developers from reaching users of its mobile devices unless they go through the ‘App Store’ which is stated to be controlled by Apple. Adding to this, Apple required app developers who wish to sell digital in-app content to their consumers to use a single payment processing option offered by Apple, carrying a 30% commission.
The 30% commission may also amount to a form of ‘margin squeeze’ in breach of the provisions of Section 4 of the Act.
In contrast to the above position, app developers could make their products available to users of an Apple personal computer in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 2-5%.
In the informant’s view, the above-stated amounted to abuse of its dominant position on the part of Apple.
Apple’s marketing restrictions makes it difficult for multi-platform apps to inform their users of the ability to make out- of-app purchases, and since Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie-in- arrangement and such conduct on part of OPs is in violation of the provisions of Section 4(2)(d) and Section 4(2)(e) of the Act.
Mandating the use of IAP limits the ability of the app developers to offer payment processing solutions of their choice to the users for app purchases as well as IAPs and amounts to imposition of unfair terms and condition in the purchase or sale of goods or services and moreover, it amounts to denial of market access for the competing payment gateway in violation of the provisions of Section 4(2)(c) of the Act.
Elaborating further, Apple expressly conditions the use of its App Store on the use of its In-App Purchase to the exclusion of alternative solutions in a per se unlawful tying arrangement.
Analysis, Law and Decision
While analysing the matter, Coram firstly noted that Apple’s ecosystem is tightly knit and vertically and exclusively integrated throughout the value chain wherein it offers apps, app store as well as smart devices.
Some consumers may have preference for closed ecosystem like Apple and others may have a preference for open ecosystems like that of Google.
Apple’s proprietary in-app purchase system (IAP)
Apple prohibits app developers to include a button/link in their apps which take/steer the user to third party payment processing solution other than Apple’s IAP. While the App Store policies of Apple allows users to consume content such as music, e-books, etc. purchased elsewhere (e.g., on the website of the app developer) also in the app, its rules restrict the ability of app developers to inform users about other purchasing options through a notification in the app itself, which might be cheaper. This would result in higher price for the users of such apps.
Commission found that the lack of competitive constraint in the distribution of mobile apps affects the terms of which Apple provides access to its App Store including the commission rates and terms that thwart certain app developers from using other in-app payment systems.
Coram prima facie opined that mandatory use of Apple’s IAP for paid apps & in-app purchases restrict the choice available to the app developers to select a payment processing system of their choice especially considering when it charges a commission of up to 30% for app purchases and in-app purchases.
Market power being enjoyed by Apple due to its grip over iOS ecosystem resulted in ‘allegedly’ high commission fee of up to 30%.
Commission also observed that the intermediation by Apple between the app developer and the app user for payment-processing purposes, would also result in leveraging on the part of Apple as it is using its dominant position in the app store market to enter/protect its downstream market of various verticals in violation of Section 4(2)(e) of the Act.
The app developers have to agree to the usage of Apple’s IAP payment processing service, if they want to distribute their apps to the iOS users through Apple’s App Store. Apple conditions the provision of app distribution services on the app developer accepting supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of the contract for the provision of distribution services, which results in violation of Section 4(2)(d) of the Act.
The above conduct, prima facie results in leveraging by Apple of its dominant position in App Store market to enter/protect its market for in-app purchase payment processing market, in violation of Section 4(2)(e) of the Act.
Another significant point noted by Commission was that App Store is the only channel for app developers to distribute their apps to iOS consumers which are pre-installed on every iPhone and iPad. Further, third party app stores are not allowed to be listed on Apple’s App Store.
Therefore, the above conduct prima facie results in denial of market access for the potential app distributors/app store developers in violation of Section 4(2)(c) of the Act. The said also results in limiting/restricting the technical or scientific development of the services related to the app store for iOS, due to reduced pressure of Apple to continuously innovate and improve its own app store, in violation of Section 4(2)(b) of the Act.
Conclusion
Coram prima facie opined that Apple violated the provisions of Section 4(2)(a), 4(2)(b), 4(2)(d) and 4(2)(e) of the Act, and hence warranted detailed investigation.
The Commission directed the Director-General to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act also directed the DG to complete the investigation and submit the said report. [Together We Fight Society v. Apple Inc., 2021 SCC OnLine CCI 62, decided on 31-12-2021]
Acquisition approval by Competition Commission of India
The Competition Commission of India (CCI) approves acquisition by HDFC Bank Limited (Acquirer) of shareholding in HDFC ERGO General Insurance Company Limited (Target) under Section 31(1) of the Competition Act, 2002.
The Proposed Combination involves acquisition of 4.99% of the outstanding equity share capital of the Target by the Acquirer from Housing Development Finance Corporation (HDFC).
Background of the Acquirer and Target
The Acquirer is a public listed banking company registered with the Reserve Bank of India which provides a wide range of banking services covering commercial and investment banking on the wholesale side and transactional / branch banking on the retail side. As a part of the retail banking segment, the Acquirer also engages in the distribution of life and general / non-life insurance products.
The Target is a joint venture between HDFC and ERGO International AG and is engaged in the business of general / non-life insurance in India and offers a complete range of general / non-life insurance products.
Competition Commission of India (CCI): Noting a nationwide cartel amongst certain Beer companies, Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma, Bhagwant Singh Bishnoi (Members) imposed penalty on three beer companies on finding regular communications with respect to planning and coordinating of price hikes to propose to State authorities
CCI initiated the present matter suo motu, pursuant to the filing of an application by Crown Beers India Private Limited (OP-2) and SABMiller India Limited (OP-3), both ultimately held by Anheuser Busch InBev SA/NV (Ab InBev) against the captioned parties (OPs) for alleged cartelization in relation to the production, marketing, distribution and sale of Beer in India.
Commission noted that there appeared existence of collusion amongst OPs 2 and 3 along with United Breweries (OP-1) and Carlsberg India Private Limited (OP-4) to:
Align the prices of Beer
Seek/implement price adjustments in several States and Union Territories of India, irrespective of whether the model of distribution of alcohol (including Beer) therein was of corporation market, auction market or free market.
The aim of the companies appeared to be to ensure consistency in their pricing policies, in particular, price increases and to achieve this aim, OP1 to OP-4 appeared to have coordinated by way of series of multilateral and bilateral meetings and e-mail exchanges amongst themselves as well as through common platform of All India Brewers’ Association (OP-5).
On 31-10-2017, Commission passed an order forming an opinion that prima facie, the conduct of the OPs appears to be in contravention of the provisions of Section 3(1) read with Section 3(3)(a) of the Act and consequently, directed DG to cause an investigation into the matter.
DG’s Report
DG noted that the sale of liquor (including Beer) does not fall within the ambit of the Goods and Services Tax (‘GST’). As such, each State/UT in India has its own unique method of regulating the sale of liquor (including Beer) within its territory, leading to differences in pricing regulations and approvals, imposition of different taxes, different excise duties and differing terms of licensing, among others.
Issue
Whether the OP’s indulge in cartelization in the domestic Beer market I India in contravention of the provisions of Section 3 of the Act?
DG concluded that OPs 1,3 and 4 indulged in the exchange of vital information amongst themselves about pricing and other confidential and business-sensitive information. These companies approached the State Governments collectively through the common platform of OP-5 to get price revisions to agreed levels so as to avoid price wars among themselves.
Hence, they contravened the provisions of Section 3(3)(a) read with Section 3(1) of the Act.
Analysis
Commission noted that the DG has established cartelization amongst the OPs in 10 States/UTs out of total 36 States/UTs in India.
In view of evidences collected by the DG, and analysed by the Commission, in the following States/UTs, cartelization amongst the OPs stood established:
(1) Andhra Pradesh – Price co-ordination between OP-1 and OP-3 in 2009 and 2013, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act;
(2) Delhi – Price co-ordination between OP-1, OP-3 and OP-4 through OP-5 in 2013, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act;
(3) Karnataka – Price-co-ordination between OP-1 and OP-3 from 2011 to 2018 with OP-4 joining in from 2012, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; and cartelisation between OP-1 and OP-3 with respect to supply of Beer to premium institutions in the city of Bengaluru in 2010, in contravention of the provisions of Section 3(3)(c) read with Section 3(1) of the Act;
(4) Maharashtra – Price co-ordination between OP-1 and OP-3 from 2011 to 2018 with OP-4 joining in from 2012, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; cartelisation between OP-1 and OP-4 to restrict/limit the supply of Beer in 2017, in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act; and sharing of market between OP-1, OP-3 and OP-4 from 2013 to 2017, in contravention of the provisions of Section 3(3)(c) read with Section 3(1) of the Act;
(5) Odisha – Price co-ordination between OP-1 and OP-3 in 2009 and 2010, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; price co-ordination by OP-4 in 2015 and 2016, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; and cartelisation between OP-1, OP-3 and OP-4, through OP-5, to restrict/limit the supply of Beer in 2015–16, in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act;
(6) Puducherry – Price co-ordination between OP-1, OP-3 and OP-4 in 2017, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act;
(7) Rajasthan – Price co-ordination between OP-1, OP-3 and OP-4 through OP-5 from 2011 to 2018 with OP-4 joining in from 2014, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; and
(8) West Bengal – Price co-ordination between OP-1 and OP-4 through OP-5, from 2012 to 2018, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; and cartelisation between OP-1 and OP-4, through OP-5, to restrict/limit the supply of Beer in 2018, in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act.
Second-Hand Bottles
Further, apart from price co-ordination and limiting/restricting supply of Beer in various States/UTs, the DG also reached to a finding of co-ordination amongst OP-1 and OP-3 with respect to purchasing of second-hand bottles.
Commission observed that the provisions of the Act do not just pertain to the end-consumers of goods/services.
“No distinction in the Act, for the purposes of assessment of anti-competitive conduct, is made between the end-consumers, and intermediaries falling in the supply chain.”
Coram opined that given the sheer magnitude and size of the OP companies, their countervailing buying power over small time bottle collectors, would have been substantial.
Hence, cartelization amongst OP-1 and OP-3 from at least 2009 to 2012 in the purchase of second-hand bottles was clearly established.
OP-1 and OP-3 had an ‘understanding’ to share their off-take of old bottles from the market for re-use in their breweries. They had also agreed upon the rate at which they would procure such bottles from the bottle collectors. They closely monitored each other’s purchase of old bottles. Such conduct of OP-1 and OP-3 may have resulted in limiting and controlling the supply of second-hand Beer bottles in the market, amounting to contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act.
OP-4 was not found guilty of cartelization with respect to second-hand Beer bottles.
Commission stated that OP-1 and OP-3 indulged into nation-wide cartelisation from 2009 to at least 10.10.2018 (till the DG conducted search and seizure operation at the premises of the OPs), with OP-4 joining in from 2012 and with OP-5, since 2013, serving as a platform for facilitating such cartelisation, which is in contravention of the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act.
15 individuals were liable for the anti-competitive conduct of their respective companies.
Conclusion
In terms of proviso to Section 27(b) of the Competition Act, in cases of catelisation, Commission is empowered to impose upon the contravening entities penalty of upto 3 times of the profit of each year of the continuance of the cartel, or 10% of its turnover for each year of the continuance of the cartel, whichever is higher.
Commission determined the quantum of penalty imposed on the parties @ 0.5 times profit for each year of the continuance of the cartel or 2% of the turnover for each year of the continuance of the cartel, whichever is higher.
Lastly, the Coram directed the parties to cease and desist in future from indulging in any practice/conduct/activity, which has been found in the present order to be in contravention of the provisions of Section 3 of the Act. [Alleged anti-competitive conduct in the Beer Market in India, In Re.; 2021 SCC OnLine CCI 53, decided on 24-9-2021]
Advocates before the Commission:
For United Breweries Ltd. (UBL), Mr. Kalyan Ganguly of UBL, Mr. Kiran Kumar of UBL, Mr. Perry Goes of UBL and Mr. Shekhar Ramamurthy of UBL:
Mr. Amit Sibal, Senior Advocate alongwith Mr. Ravishekhar Nair, Ms. Avantika Kakkar, Mr. Sahil Khanna, Mr. Abhay Joshi, Mr. Kirthi Srinivas, Mr. Ambar Bhushan, Mr. Saksham Dhingra, Mr. Animesh Kumar, Ms. Shreya Joshi and Ms. Sree Ramya Hari, Advocates and Mr. Govind Iyengar, Senior VP Legal of UBL, Mr. Kiran Kumar in person, Mr. Perry Goes in person and Mr. Shekhar Ramamurthy in person
For Mr. Shalabh Seth of UBL:
Mr. Ramji Srinivasan, Senior Advocate alongwith Mr. Gaurav Desai, Ms. Apurva Badoni and Mr. Shivkrit Rai, Advocates
For Mr. Steven Bosch of UBL:
Mr. Prashanto Chandra Sen, Senior Advocate alongwith Ms. Nisha Kaur Oberoi, Mr. Gautam Chawla, Mr. Rishabh Juneja and Ms. Shambhavi Sinha, Advocates
For Anheuser Busch InBev SA/NV (i.e., Crown Beers India Private Limited and SABMiller India Limited):
Mr. Manas Kumar Chaudhari, Mr. Pranjal Prateek, Mr. Sagardeep Rathi and Ms. Radhika Seth, Advocates alongwith Ms. Ajita Pichaipillai, Legal and Compliance Director of AB InBev
For Mr. Anil Arya of SABMiller India Ltd.: For Mr. Nilojit Guha of SABMiller India Ltd.:
Mr. Talha Abdul Rahman, Advocate
Mr. Tahir Ashraf Siddiqui, Advocate with Mr. Nilojit Guha in person
For Mr. S. Diwakaran of SABMiller India Ltd.:
Mr. Shreyas Mehrotra, Advocate
For Carlsberg India Pvt. Ltd. (CIPL), Mr. Anil Bahl of CIPL, Mr. Dhiraj Kapur of CIPL, Mr. Mahesh Kanchan of CIPL, Mr. Michael Jensen of CIPL and Mr. Nilesh Patel of CIPL
Mr. Rajshekhar Rao, Ms. Manika Brar, Ms. Atrayee Sarkar, Mr. Anandh Venkataramani, Mr. Nilav Banerjee, Ms. Kajori De, Ms. Afreen Abbassi and Ms. Raveena Sethia, Advocates alongwith Mr. Amit Sethi of CIPL
For Mr. Pawan Jagetia of CIPL:
Ms. Deeksha Manchanda and Mr. Shruti Rao, Advocates
For All India Brewers’ Association (AIBA): For Mr. Sovan Roy of AIBA:
Mr. Subodh Prasad Deo and Ms. Rinki Singh, Advocates, with Mr. Sovan Roy in person
The Government in June 2021 released the proposed amendments to Consumer Protection (E-Commerce) Rules, 2020 (hereinafter “proposed amendments”), with a view to regulate the e-commerce space more closely from a consumer protection perspective. The proposed amendments seek a substantial increase in compliances and liabilities, along with a broader scope of the term “e-commerce”. In addition to these, the proposed amendments are not in alignment with existing regulatory frameworks. One such significant overlap is with the competition law framework, and the role of the Competition Commission of India (hereinafter CCI).
E-commerce in India has been a beacon of competition, not just from the retailing perspective, but also various other services that have been made possible. It is a visible sign of a thriving platform economy, and has significantly changed the conduct, and content of commerce.
The burgeoning nature of the e-commerce market in India can be witnessed from multiple projections all of which point to an upward trajectory, and hover around an expectation of a $200 billion size by 2025[1]. This growth must also be seen in the context of Covid-19 in India, where platforms contributed to a sense of resilience and normalcy during the peak of the pandemic.
However, digital markets have brought with them plenty of issues concerning the jurisprudence of competition law, not just in India, but in various other countries. Matters related to non-price aspects of competition, unique selling practices of e-commerce platforms, and the ambiguous understanding of “level playing field”[2] between traditional and online businesses, have significantly challenged the Competition Commission of India’s (CCI) oversight. These new challenges have also been formally acknowledged by CCI[3], in its January 2020 report on e-commerce in India. With most of the issues yet to see completion of detailed investigation, any interim legislation may end up hampering this investigation.
Flash sales, as defined in the proposed amendment[4] (along with the proviso), aim to reduce the advantage that e-commerce platforms may give to certain sellers, or groups of sellers. But what must be considered is that flash sales, through discounts, and reduced prices, have the effect of greater benefit for consumers (one of the objectives of competition law), and greater competition (particularly, interbrand competition among products) across platforms. Further, while such flash sales also involve an element of special distribution arrangements, the CCI has not yet pronounced on the legality of such arrangements. These arrangements may in fact, create an efficient supply chain. These issues are currently being explored by the CCI as part of its investigation into non-horizontal agreements under Section 3(4) of the Competition Act, 2002. This would be complemented with a better understanding of appreciable adverse effects on competition, under Section 19(3) of the Act; in terms of flash sales being perceived as an aggravating or mitigating factor, for competition.
While these involve a more traditional understanding of competition in India, contemporary developments around data and privacy, are newer determinants of competition[5]. The proposed amendment recognise this, when it says no e-commerce entity shall engage in abuse of dominant position[6], as per Section 4 of the Competition Act. However, the Consumer Protection Act might be a misplaced legislative framework to talk about dominance of e-commerce platforms, and rather, must be addressed on a case-to-case basis by the CCI. Competition within, and between e-commerce platforms is based on efficiencies in the supply chain, with data about consumer preferences shaping production planning and distribution channels. By reiterating the need to not engage in “abuse of dominance” in a consumer protection framework, it prematurely shapes the jurisdiction of Consumer Protection Authority (CPA) in matters of data collection, sharing, preferential selling, search indexes and rankings, and cross-selling; leading to possible jurisdictional overlaps with CCI and other regulators therefore, giving opportunity for forum shopping. Similarly, under Section 6(6)(a) of the proposed amendment (liabilities of platforms), platforms need to ensure that it does not use any information collected through its platform for unfair advantage of its related parties and associated enterprises. This is an issue under platform neutrality, with CCI now taking cognizance of a gamut of such instances[7].
Finally, under Rule 7(1)(b) of the proposed amendment, it has been mandatory for e-commerce platforms to identify, and highlight the “country of origin” of goods, while adding the need for providing filtering options, and suggesting domestic alternatives. This, even though well intentioned in its idea of promoting Make in India and encouraging small Indian manufacturers, may end up distorting the notion of level playing field. It may discriminate against imports, and overlook the complex process of value addition or assembly that may happen in the destination country.
Conflicts beyond the Competition Law
The proposed amendment reiterate many provisions listed in the FDI policy for e-commerce, such as mandatory registration, scope of related parties, country of origin, etc. However, while the FDI norms do not make a mention of platform liability[8], the proposed amendment clearly enunciate the need for one.
Going further, the proposed amendment have a jurisdictional overlap between the proposed Data Protection Authority (DPA) (under the Personal Data Protection Bill, 2019), and the Consumer Protection Authority. Section 5, clause 14(a) of the proposed amendment venture into aspects of data sharing and processing (based on consent), whose nuances can best be dealt with only a DPA, and an overarching data protection law.
Lastly, the overlap with competition law explored above, also brings the CPA in conflict with CCI, possibly contributing to more “forum shopping” and delaying strategies.
Conclusion
Post feedback to the draft Rules, the expectations would consist of a softer regulatory touch for e-commerce until more important legislations are passed, and of CCI developing greater expertise in digital markets. Any focus on consumer protection must be exclusive, and consumer-centric. This may draw from the EU’s the New Deal for Consumers[9], a legislation on consumer protection in e-commerce. It focuses on transparency in marketplaces and advertisements, terminability of online contracts, robust grievance redressal and compensation, and uniformity in quality.
As for the regulation of e-commerce as a whole, relying on consumer protection alone takes a parochial view of supply side dynamics. Another EU model might serve as a reference for e-commerce regulation in this regard, with the proposed Digital Services Act package[10]. While the Digital Services Act regulates all online intermediaries and places strict obligations for large players, the Digital Markets Act emphasises on limiting the economic power of the major players, or “gatekeepers”. Thus, with 2 distinct laws, the package aims to empower consumers, foster greater transparency and accountability, and create equitable competition.
[1] Invest India, Retail and E-Commerce, available HERE .
See also Saritha Rai, P.R. Sanjai, Bhuma Shrivastava, 2020, “Asia’s Richest Man Takes on Amazon in India’s Booming Online Market” HERE (posted on 11-11-2020).
[2] Chawdhry, Mohit, 2021. Levelling the Playing Field between Traditional and Digital Businesses, Report Issue 009, New Delhi: Esya Centre. Available HERE.
[3] Competition Commission of India, 2020, Market Study on E-Commerce in India: Key Findings and Observations, New Delhi: Competition Commission of India. Available HERE .
[5] Competition Commission of India, 2020, Market Study on the Telecom Sector in India: Key Findings and Observations, New Delhi: Competition Commission of India. Available HERE .
Competition Commission of India (CCI): In its recent press release, Competition Commission of India, while giving benefit of reduction in penalty under the provisions of Section 46 of the Competition Act, 2002 of 100%, 40% and 20% to AB InBev, United Breweries Ltd. (UBL) and Carlsberg India Private Limited (CIPL), and all their individuals respectively besides passing a cease-and-desist order. a final order against three beer companies namely United Breweries Limited (‘UBL’), SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd. after being acquired by Anheuser Busch InBev SA/NV) (‘AB InBev’) and (‘CIPL’) for indulging in cartelisation in the sale and supply of beer in various States and Union Territories in India, including through the platform of All India Brewers’ Association (‘AIBA’). The period of cartel was held to be from 2009 to at least 10.10.2018 (the date on which the Director General (‘DG’) conducted search and seizure operations at the premises of the beer companies), with CIPL joining in from 2012 and AIBA serving as a platform for facilitating such cartelisation since 2013. All three beer companies were lesser penalty applicants before CCI.
Engaged in price co-ordination in contravention of the provisions of Section 3(3)(a) of the Competition Act, 2002 (the ‘Act’) in the States of Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and the Union Territory of Puducherry, in collectively restricting supply of beer in the States of Maharashtra, Odisha and West Bengal in contravention of the provisions of Section 3(3)(b) of the Act, and in sharing of market in the State of Maharashtra as well as co-ordination with respect to supply of beer to premium institutions in the city of Bengaluru in contravention of the provisions of Section 3(3)(c) of the Act. CCI also found co-ordination amongst UBL and AB InBev with respect to purchase of second-hand bottles.
PR40-2021-22
Agatha Shukla, Editorial Assistant has reported this news.
Here’s a run-through of all the significant decisions covered in the month of June, 2021 under the Section of Tribunals/Commission/Regulatory Bodies.
Armed Forces Tribunal
♦ AFT | Pension cannot be denied for disability being less than 20% where the disability is assessed at 15-19%“
The assessment of disability to the tune of 15-19% itself is a doubtful assessment and cannot be final for the simple reason that there is no barometer which can assess the disability percentage to the extent of 1% and therefore, the percentage of disability which has been assessed as 15-19% may be 20% also and there may be variation of at least two percent plus also. In case of doubt as the benefit should always be given to the applicant.”
♦ CCI examines if airlines were involved in cartelization resulting in anti-competitive practice during Jat Agitation in 2016 || Synoptic view of Judgment
“…with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.”
♦ ABFI prohibits State Baseball Associations from joining unrecognised leagues, threatens disciplinary action | CCI to examine such conduct in light of provisions of Competition Act
“ABFI isued communication to its affiliated State Baseball Association requested them no to entertain unrecognized bodies and further by requesting them not to allow their respective State players to participate in any of the tournaments organized by such unrecognized bodies, has violated the provisions of Section 4(2)(c) of the Act as it resulted in denial of market access to other federations.”
♦ CCI | Did Google leverage dominance in Play Store? Director-General to conduct investigation in complaint by smart phone/smart TV users
“..by making pre-installation of Google’s proprietary apps conditional upon signing of ACC for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android and thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the Act.”
♦ Are Tourist Taxi Unions in State of Goa preventing entry of App-based Taxi Aggregator Companies in Goa? Read a detailed account of CCI’s decision
“..despite the opposition of taxi unions, the State of Goa does not appear to have acceded to or conceded to the demands of the OPs and the policy allowing entry of app based taxi aggregators was eventually notified.”
♦ CCI | Co-location facility of National Stock Exchange is anti-competitive? Is the service an autocratic move against traders? Comprehensive Report
A robust exchange acts as a backbone of the financial system and the provision of co-location facility by exchanges help increase volumes of trades manifold and provides liquidity to investors. This augurs well for the market, the companies and the economy.
♦ ITAT | Whether DTAA protection in respect of taxation of dividend in source jurisdiction, can be extended to ‘dividend distribution tax’ under S. 115-O, Income Tax Act, in the hands of a domestic company? Matter referred to larger Bench
“Whether the protection granted by the tax treaties, under Section 90 of the Income Tax Act, 1961, in respect of taxation of dividend in the source jurisdiction, can be extended, even in the absence of a specific treaty provision to that effect, to the dividend distribution tax under Section 115-O in the hands of a domestic company?”
♦ NCDRC | In a case of death insurance claim, can police investigation be replaced by private agency investigation engaged by insurance company? Commission spells out
Inquest is conducted as mandated under the Cr.P.C., Post Mortem is conducted by the concerned government Medical Officer, Investigation is conducted by the Police (a private agency engaged by the Insurance Co. does not substitute for the Police).
♦ NCDRC | Builder unilaterally, high-handedly cancels sale agreement on not handing over timely possession: Commission decides builder-buyer dispute, levies interest to be paid by builder
“According to Section 8 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, if the builder is not able to hand over the possession over the building/flat within the time specified in the agreement then the builder is liable to pay interest to the purchaser of the flat for the period for which the possession has not been handed over.”
NCLAT | Can Banks debit amounts from Corporate Debtor Company after Moratorium Order? Is there an obligation of releasing ‘title deeds’ under Resolution Process? Read on
Banks cannot freeze accounts, nor can they prohibit the ‘Corporate Debtor’ from withdrawing the amount as available on the date of the moratorium for its day-to-day functioning.
Maharashtra Real Estate Regulatory Authority, Mumbai
♦ Can promoter/builder sell covered car parking by charging certain amount? Whether open parking has to be handed to society or can be sold in open market? MahaRERA decides
State Consumer Disputes Redressal Commission, U.T. Chandigarh
♦ Consumer spending hefty amount has right to ask for record of expenditure. Can service provider evade liability? Read on
“…every person who is shredding hefty amount from his pocket towards the services being provided to him, has the right to know as to how, where and in what manner, the same has been utilized.”
♦ Consumer Forum | Can complainant raise consumer dispute where excess electricity duty is charged? Is he overriding statutory remedy if he already approached the Collector? Read on
“Section 3 of Consumer Proetction Act cannot be said to be inconsistent with Rule 12 of the Electricity Duty Rules.”
State Consumer Disputes Redressal Commission, Telangana
♦ Can insurance company repudiate claim if insured suppresses fact of suffering from ailment while taking policy? Telangana State Consumer Forum answers
“If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.”
♦ Infosys insider trading | While in possession of Unpublished Price Sensitive Information, 2 employees of Infosys & 6 other entities violated Insider Trading Regulations on Infosys Stock [Detailed Report]
“The liability of acting partners and non-acting partners (collectively known as firm) for the injury to the third party is an outcome of joint and several liability of such partners under IPA, irrespective of whether that the conduct (act of omission or commission of the firm) which gave rise to the loss/injury to the third party is also in violation of any provision under securities law.”
♦ Decoded | SEBI bars Director of Franklin Templeton AMC, wife from accessing securities markets for 1 yr: Can redemption of units by Director of a mutual fund AMC be titled as fair conduct?
Laws dealing with information asymmetries (PIT Regulations and PFUTP Regulations) essentially seek to address the issues arising out of disparities in access to material information, that is otherwise not legally available to general investors, and to prevent those persons having access to such superior information from exploiting the informational advantage, in order to protect the integrity of the market and maintain investor confidence.
♦ SEBI | Not so “independent” Independent director and a concocted scheme with affinity and consanguinity |SEBI takes on each violation with mordant remarks
“…remuneration and qualification are two crucial criterions to evaluate and adjudge the significance of a position held by a person in an organisation and his importance and status in participating in the management of a company.”
♦ SEBI | Kingfisher’s chopped wings and shrinked wingspan | United Breweries Acquisition | Heineken exempted from the obligation under Takeover Regulations with exceptions
