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Competition Commission of India (CCI):The Bench comprising of Sudhir Mital, Chairperson; Augustine Peter and U.C. Nahta, Members, dealt with a case against IRCTC and Ministry of Railways for contravention of the provisions of Section 4 of the Competition Act, 2002 in regard torounding off actual base fares to next higher multiple of Rs 5.”

In the present case, informant filed a case against Ministry of Railways and IRCTC (Opposite Parties) for contravention of Section 4 of Competition Act, 2002. According to the facts and submissions filed by the informant, it was averred that as per the pricing policy of OPs published on its official website, rounding off to the next higher multiple of Rs 5 was included in the base fare. Further, was stated that OPs hold a dominant position in the relevant market as they are the only players and are empowered to determine the pricing of e-tickets.  Due to the statutory and regulatory framework, the dominance of the OPs is indisputable.

The Commission referred to its earlier decisions in Sharad Kumar Jhunjhunwala v. Union of India, 2014 SCC OnLine CCI 31; Ismail Zabiulla v. Union of India, Case No. 49 of 2014; Yaseen Bala v. Union of India, Case No. 89 of 2014; and stated that due to the statutory and regulatory framework, the dominance of Indian Railways in this market is undisputable. OPs were unable to convince the Commission as to why the policy of rounding off of actual base fare to next higher multiple of Rs 5 is applicable to sale of online tickets, when it may be possible to transfer even one paisa electronically.

Thus, the Commission held that the practice adopted by the OPs prima facie would amount to an imposition of the unfair condition in the market for sale of rail tickets in India, particularly for online booking, contravening the provision of Section 4 (2)(a)(i) of the Competition Act. Accordingly, Director General was directed to cause an investigation into this matter and submit the report within 60 days of this order. [Meet Shah v. Union of India,2018 SCC OnLine CCI 88, Order dated 09-11-2018]

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Competition Commission of India (CCI):  A four-member bench comprising of Devender Kumar Sikri, Chairperson and Sudhir Mital, Augustine Peter and U.C. Nahata, Members, held that opposite parties, ‘Ola’ (OP 1) and ‘Uber’ (OP 2) did not contravene either Section 3 or 4 of the Competition Act, 2002.

The informant- ‘Meru’ cab, informed the Commission that the OPs were collectively the dominant players in the radio taxi services market. They entered into agreements with each other that were detrimental to the competition. The informant raised various points. Firstly, it was alleged that the OPs abused their dominant position by entering into agreements with each other that had an appreciable adverse effect on competition on the market. Secondly, the question was also raised as to the common investors (mainly ‘SoftBank’) which, as alleged, resulted in common control. Thirdly, it was alleged that the OPs had indulged in below variable cost pricing for a period of over two years. Considering the information received, the Commission, on 3-8-2017,  sought further information from the OPs primarily in regard to their shareholding pattern.

The Commission observed that the informant did not place on record any agreement entered into between the OPs and the drivers imposing exclusivity restrictions on drivers in contravention of Section 3(4) read with Section 3(1). Regarding dominance, the Commission was of the opinion that high market share was not in itself an indicator of dominant position. As for the allegation of collective dominance, the Commission observed that Section 4 does not contemplate in its fold the concept of collective dominance. The Commission held that the dominance of either Ola or Uber was not made out. The Commission showed some concern over the fact of common ownership (common investors like SoftBank) and held that policy needs to be framed in that regard, as such overlapping interest may result in the reduction of firms’ incentive to compete. However, on this point too, the Commission held that as per the law as it stood on the day, the OPs could not have been said to contravene the provisions of the Competition Act, 2002. Holding that investigation under the Act could not be held solely based on conjectures and apprehensions, the Commission closed the matter under Section 26(2) of the Act. [Meru Travel Solutions (P) Ltd. v. ANI Technologies (P) Ltd.,2018 SCC OnLine CCI 46, dated 20-06-2018]

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Competition Commission of India: The Commission recently passed an order under Section 26(2) of the Competition Act, 2002 regarding a complaint filed under Section 19(1)(a) of the Competition Act, 2002 wherein the informant alleged that the opposing party (OP) had contravened Section 4 of the Competition Act.

The informant was the Karta of an HUF and the OP was a private real estate development company. The facts of the case are that the informant had come across an advertisement by the OP about them developing a residential layout at a certain area in Bengaluru which was supposed to have various amenities such as a park, swimming pool etc. The informant, being interested in the project, paid a part of the consideration amount in cash to the OP who ended up executing the agreement a few days later on the names of some 3rd party people, who the OP intimated to the informant, were the registered land owners. Following this, when the time came for the execution of the sale deed of the residential plot, the OP refused to agree to the informant’s term of including the OP’s name and of him having paid the entire consideration amount. The informant was rather coerced into executing the sale deed without consideration to his terms. Further more, even after the sale deed had been executed, the OP had yet to provide the amenities which were previously promised to the informant owing which the informant was forced to keep the plot vacant. The informant also came to know that the land was provided to the original owner on account of him being an SC for free, a part of which was further sold by the concerned to some other part and which consequently came to the hands of the registered owners with whom the OP had only entered into a development agreement. It was also brought to the notice of the informant that the original owner had filed for cancellation of the sale under the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978. The problems that were being faced by the informant were also being faced by many other purchasers of the land.

The informant hence contended that the OP had misused his dominant position by misleading the purchasers and making them enter into agreements whereby they would have to adhere to the dictated terms of the OP.

The Commission observed that this was a case of fraudulent sale of land and revolved around issues such as corruption, money laundering, unfair practices etc. and hence, didn’t warrant the intervention of the Commission for abusive conduct of the OP under Section 4 of the Act. The Commission also acknowledged that even though the Agreement and the Sale Deed had been entered into before the Act came into effect, it could still be examined under the provisions of the Act as the effect of the agreements had been continuing till the present date. The Commission still went on to examine whether the case would stand even if the conduct was to be examined as an abusive one. The Commission held that the OP didn’t stand at a dominant position in the relevant market which was ascertained to be that of “provision of services for development and sale of residential plots in Bengaluru”, since there were other real estate developers offering residential plots in the relevant market and which were fierce competitors to the OP. [Indudhar M. Patil v. DS-Max Properties Private Limited, Case No. 64 of 2017, order dated 04.01.2018]