COMPETITION LAW

UNIT – I
Introduction to Competition Law
What is the purpose of competition?
Competition leads to economic efficiency which ultimately leads to consumer welfare.
Economic Efficiency’s three components
i. Allocative – proper allocation of resources with market, business
ii. Productive – output  minimum cost me maximum output creates healthy competition.
iii. Dynamic – The range of products and innovation in the marketplace which ultimately leads to
consumer welfare.
Competition is a process of rivalry between the firms to provide goods and services to the consumer.
 Competition in general (market place) – it is a process of rivalry between enterprises or customers
 In order to respond to demands of better products at lower prices competing businesses are encouraged
to innovate, lower their costs by reducing wastage and increased productivity
 CCI vs SAIL
o SC pointed out the advantages of competition
 Allocative efficiency – ensures effective allocation of resources
 Productive efficiency – ensures cost of production to be kept minimum
 Dynamic efficiency – promotes innovation
o These factors are by and large accepted all over the world as guiding principle of effective
implementation of competition law.
 Excel Crop Care Ltd. vs CCI
o In this case the SC outlined, the benefits of competition policy as follows:
 Protection of small businesses
 Contribution in trade policy
 Technological advancement and consumer welfare etc.
 It may have effect on employment policies which means more dynamic enterprises and
more efficient employment
 It compliments trade & industrial policy and regulatory reforms.
 These policies encourage adjustment to trade and industrial structure to promote
productivity-based growth. Wherein, regulatory reforms eliminate domestic regulations,
that restricts entry and exit of firm in the market.
 Improves the growth prospect of economy.
o It is achieved through
 Pressure on the firm to control price and cost of production
  Encourage innovation
 Easy entry and exit
 Competition policy is a strategy and law is a tool to implement that strategy
 This provides for law and regulations.
 Enforcement mechanisms and penalties.
Industrial Policy  deals with aspect which also overlaps with competition law
Industrial Policy Resolution
1948- concentration of govt on state monopoly only state shall be dealing in certain business  declared and
identified as mixed economy (both public and private partnership will be there.
Policies which affect competition policy
Competition process runs smoothly when other policies are in line with it. Example, Industrial Policy, Trade
Policy, Labour Policy, Anti-Dumping.
Common objective of industrial policy
i. Growth in productivity, employment opportunities, utilisation of resources and GPD growth
ii. Industrial Policy Resolution 1948 emphasise upon government monopoly and active role of the
state in setting up industries. Also limited private participation. Mixed economy was declared,
restriction on foreign investment, priority to small scale and cottage industries.
iii. IPR 1956 Economic constitution of India – widened scope of public sectore, dominance in most of
the key areas. Criticised because private sector participation was limited.
iv. IPR 1977  decentralisation of industries, reduction in concentration of wealth
v. IPR 1980 emphasised upon promotion of competition in domestic market and modernisation and
technical upgradation.
vi. Also focused on higher productivity and employment and promotion of export oriented industries.
vii. Consumer protection against high prices and poor quality.
viii. New IPR 1991  LPG Reforms  Initiatives taken in forest investment, industrial licensing,
MRTP, foreign technology agreements. Licensing was abolished except for few sectors. created
positive business environment and simplified procedure offering fiscal incentive.
ix. Allowing foreign investment by lowering control and regulations.
x. Privatisation – particularly sick units
xi. Exit policy for sick units, improved banking and finance units, credit availability, removal of
barriers-import export, and ultimately industry entry environment.
xii. Industrial Licensing  system of obtaining licences to set up an industry  FEMA Was replaced
with FEMA and MRTP was relaxed.
Trade Policies also affect competition in the market. There were reforms like number of capital goods,
intermediates and raw materials were included in open general license, rationalization of duty rates on selected
goods, intermediates and raw materials. Less stringent rules for the grant of licenses that continued to be under
discretionary control.
Trade Policy (Raghavan Committee Report) such as anti-dumping policy – major change was of quota system
of export and import which was relaxed
Sectors in which there is a state monopoly affecting competition in market
Labour policy is important for labour maximization
Need of competition laws-
Industrial reforms were not enough to maintain competition- thus MRTP and then competition act. Competition
was just a by product in such reforms.
Concentration of economic power in the market existed even after industrial reforms because after privatisation
it rested with a few major firms only. Thus the need for specific competition policy. Economic efficiency,
mergers and acquisitions, policy should include all sectors related to consumer, labour, industries etc.
Competition regime- law (practice, enforcement, penalties) and policy
Realised MRTP is obsolete and thus need new law and thus the Raghavan committee was constituted and report
was submitted.
Competition act covered:
1. Anti-competitive agreements
2. Abuse of dominant position
3. Undesirable Combinations- proposed that should consider whether it has anti-competitive effect or not and
if it does then have to be explained by the parties
In pursuance of this, recommendations were:
Divided the anti-competitive agreements into:
Horizontal (price fixation, market share division, cartelization) and Vertical. Verticals are taken more leniently
in terms of penalty and prohibition.
Need for competition policy:
4. Welfare maximization
5. Economic reforms were not enough
6. Trade barriers
7. International cartels
8. Concentration of economic power
9. Difference in standards at international level
On 25 October 1999, high level committee was constituted to examine MRTP and shifting focus of law from
curbing monopolies to promoting competition (Raghavan committee)
It submitted its report to the Central Government on 22 May 2000 and recommended for the enactment of
competition law.
Focus area:
1. Anti-competitive agreements
Most jurisdiction were making distinction between horizontal and vertical agreements
Horizontal amongst competitors at same stage, vertical relationship of buying and selling at different stage.
Committee recommended to cover both.
To treat verticals more leniently.
To presume certain agreements to be anti-competitive per se.
Agreements contributing into improvement of production, quality, innovation should be dealt with leniently.
Relevant market should be clearly defined.
Territory sharing, cartels etc should be presumed to be illegal.
Relevant market – Section 19 – delineate on the basis of service or product they provide, geographical
perspective.
2. Abuse of dominance
i. Dominant position must be properly defined in terms of position of strength enjoyed by an undertaking
which enables it to operate independently of market forces and also appreciably effect the market.
Dominant position must be defined properly considering the position of strength of an enterprise which
enables it to operate independently causing appreciable adverse effect on competition.
ii. Avoid any arithmetical figure like percentage of market share, asset value- dominant firm may act
ethically and provide benefits to the competition. Abuse of dominance rather than dominance must be
prohibited. This may include practices which are restrictive in nature. E.g., restriction of supply of goods
in the market, restriction upon innovation, research etc.
iii. Relevant market must be clearly defined.
iv. While determination of AOD, the following may be considered:
i) how will the practice harm competition,
ii) will it deter entry of other competitors,
iii) whether consumers get benefit of low prices (pro-competitive),
iv) will it prevent investment in technology and research
v. Invisible hands control competition- but when not able to control that means a regulation is essential
according to neoclassical theory.
vi. Predatory pricing (below cost price) must be covered in the act. It appears to be in consumer interest
prima facie as it is below cost of production. E.g., Jio zero cost, Google is free of cost. However, it steals
the data and manipulates algorithms to show certain results. Thus effects economy and consumer interest
in the long run.
vii. Mergers recommendation-
i) They should be discouraged only if they reduce competition. The committee cautioned against
monitoring of all mergers because very few companies were of international size and in the light of
continuing economic reforms, it was necessary to compete at global level therefore mergers should
be allowed generally.
ii) Mergers beyond a threshold limit will allow pre-notification.
iii) Potential efficiency losses and gains must be weighed while considering application of merger.
viii. MRTP must be repealed which used to cover cases of Unfair Trade Practices, Restrictive Trade
Practices. Committee recommended MRTP must be repealed and cases of UTP must be forwarded to
consumer courts and cases of MTP and RTP must be forwarded to CCI.
Comments:
i) Establishment of regulatory body CCI.
ii) Dichotomy between IPR and Competition Law- clear distinction between existence of rights and
exercise of rights.
iii) State monopolies, govt procurement, regulatory authorities must be covered under the act.
iv) All decisions of regulatory authority must be examined by CCI in light of competition principles.
v) MRTP Act may be repealed. MRTP Commission may be abolished. Provisions relating to UTPs covered
by Consumer Protection Act and pending UTP cases transferred to consumer courts- MTP and RTP
cases transferred to CCI.
vi) Regulatory body should be a multi-member body- judiciary, IT, economy, industry, accounting etc.
 vii) Regulatory body should have power to formulate its own rules and regulations to govern procedure and
conduct of its business and its administration.
viii) Outcome- bill introduced in 2001. Competition Act enacted in 2002.
Hazari Committee Reports- constituted to see the licensing policy.
Subimal Committee- concentration of economic power in hands of few players.
Mahanlobis committee- concentration of economic power in hands of few players.
Monopolies Inquiry Commission- headed by KC Gupta- repealed MRTP and brought competition Act.
MRTP- Unfair Trade Practice (misstatements deceptive in nature made to consumer), Monopolistic Trade
Practices, Restrictive Trade Practices (agreements wherein the firm restricts entry of products, capital and
innovation in market- no difference) UTP were even addressed in consumer protection act- MRTP which was
for competition ended up taking care of consumer protection cases and was thus repealed.
If per se prohibitions are there, then it is more restrictive.
MRTP had provisions related to-
1. approval,
2. per se violations,
3. dominant position, bid rigging etc.
1984 amendments- Sachar committee- UTP directly came under MRTP jurisdiction- requirement of approval
was taken out of Act in restructuring- If company going into corp restructuring then there has to be approval,
dominant position has to have threshold
Problems- Myriad of consumer protection cases- problematic was bringing UTP directly under MRTP- for free
market economy we need less restrictions- law was unclear and thus a lot of misinterpretations- If company
going into corp restructuring then there has to be approval.
1991 amendments- adoption of new economic policy- abolition of approval and permissions, public sector
taken within the purview of Commission jurisdiction, license raj abolition
No specific provision in competition act for digital market.
Absence of extra territorial jurisdiction-
Soda Ash Cartel case- Alkali Manufacturers Association Of ... vs American Natural Soda Ash Corporation ...
on 10 June, 1997
Govt biasness remained in MRTP even after removal of approval requirement.
Overview of MRTP
Many committees were appointed to review and check concentration of economic power in few market players:
1. Hazari Committee, 1951
To study licensing procedure under industrial policy.
Finding- big businesses were flouting the industrial policy and state is biased in granting licenses to such
entities.
2. Subimal Dutt Committee
Finding- big businesses were controlling around 56% of the market and economy. Suggested- for
enactment of new law.
3. Mahanlobis Committee
constituted on distribution and level of living in 1964.
Finding- that there was concentration of wealth and power in hands of few.
 4. Monopolies Enquiry Commission
Committee headed by KC Das Gupta found concentration of economic power in few private players.
Licencing policy and industrial policy were not enough to control behaviour of such firms. There was a
need of a law to govern and regulate such irregularities. Drafted a bill to curb Monopolistic and
Restrictive Trade Practices and bill came law as MRTP Act in 1969.
Features of the Act:
1. Made mandatory for prices for approval of central government before restructuring or takeover.
2. Undertakings having asset value more than 1 crore were considered as dominant.
3. Chapter IV covered Monopolistic Trade Practices- dealt with abuse of market position which affects
healthy competition adversely.
4. Restrictive Trade Practices- activities blocking flow of supply of goods, capital, profit etc. in the market.
5. Unfair Trade Practices- Act of false, misleading or distorted representation of facts pertaining to goods.
6. MRTP Commission established.
7. 1984 Amendment (Sachar Committee)- claims against false advertisement, deceptive representation of
goods and false guarantee came under purview of MRTP Act.
8. 1991 Amendment- to give effect to New Economic Policy- allowed MRTP Act to cover public sector.
Private entities were not required to take special approvals before restructuring.
Shortfalls
1. Excessive government control.
2. No specific provisions defining various kinds of anti-competitive activities like bid rigging, collusion,
cartel etc.
3. Per se violations.
4. Arithmetical figure to define dominance.
5. No extra-territorial application.
6. Promotion of export at the cost of harming competition. Authorities___ who had high potential of export
in future without considering anti-competitive or monopolistic shadow in it.
7. Concurrent jurisdiction of consumer courts and the commission.
US- Anti-trust law- formed to regulate trusts
Sharman Act- S. 1, 2- relevant wrt prohibition of anti-competitive agreements and AOD- consolidation was
happening of big firms for steel, rail, road etc.
Monopolistic nature of case was identified
All standard oil companies were consolidated- 90% of sales were in one company.-
Concentration of economic power in hands of few
1949- realized that it is not possible to regulate it by Sharman Act
FTC Act- focused on competition schemes
Clayton Act- focused on mergers- covered things that fell short in Sharman Act and FTC Act.
DoJ (prosecutor authority) and FTC- empowered to prosecute such entities engaged in anti-competitive
practices- not adjudicatory bodies
CCI- adjudicatory body- investigates, prosecutes, arrests etc.
After World War- economy was opened to make it stable- US was relaxed
Chicago- wanted to focus on consumer welfare- to let the firms act on their own will- its not a problem if there
are minor anti-competitive practices- didn’t want to focus on upgrading small firms but give upper hand to
bigger firms.
EU/India approach- focussed on interests of competitors and not consumer
US approach- focused on consumer welfare so less aggressive
Retrial in US court for appropriate remedy
Call by Chicago school- to protect competitors which would protect consumer welfare too
India- only concerned with abuse of the dominant position and not dominant position itself.
US- Monopoly, attempted monopoly, conspiracy
US Anti-trust law:
1. Sharman Act (1890)- first legislation in modern competitive regime, 1914- FTC Act and Clayton Act
2. S. 1 of Sharman Act deals with anti-competitive agreements, S. 2 deals with abuse of dominant position
(monopolization)
3. Penalties under Sharman Act are severe- criminal enforcement- violators may be prosecuted by DoJ
however limited to intentional and clear violations.
4. Anti-trust laws in US provides definitions of unlawful activities which are limited leaving the courts to
decide the matters on case-to case basis.
5. FTC Act bans unfair method of competition and all violations under the Sharman Act also violate FTC.
It covers activities which harm competition but do not directly fit in the categories mentioned in the
Sharman Act.
6. Clayton Act addresses specific practices relating to mergers and interlocking directorates. In addition to
these federal statutes, states also have anti-trust laws that are enforced by state attorneys or private
parties and many of these are based on federal statutes.
TFEU- embodied in Art 101 (prohibition of anti-competitive agreements) and 102
Definition of undertakings
EU COMPETITION LAW
1. Art 101 (Anti-competitive agreements), 102 (Abuse of dominant position) of TFEU.
2. Equivalent to Art 85 (101) and 86 (102) of Treaty of EEC.
3. Three domains: Anti-competitive agreements (Behaviour of the firms whether abusive or not, that is
taken into consideration), abuse of dominant position (Dominance per se not anti-competitive),
concentration (relevant market delineated to identify the market within which anti-competitive activities
are taking place.)
4. Undertaking- involved in economic activity (Hoffman case)
5. Exemption- if advanced innovation or no substantial harm
6. Small and significant but non-transitory increase in price (SSNIP test)
SSNIP TEST
Soda Ash Cartel case (Alkali Manufacturers of India
Complaint filed by AMAI before MRTP Commission under S. 10, 31, 33, 36A, 14.
AMAI’s arguments:
1. ANSAC is indulged in cartelization. These are 6 producers of natural soda ash who formed this
corporation and authority to decide to whom and at what price
 2. In US, Soda Ash is of natural origin and production is very cheap. Indian manufacturers synthetically
produce it.
3. The domestic producers are producing it more than demand and ANSAC is selling it at predatory price
to which the Indian producers cannot compete.
4. Commission of European Communities also held that membership agreement of ANSAC is
infringement of Art 85 and therefore imposed anti-dumping duties and prohibited the activities.
5. AMAI prayed for injunction and inquiry which was allowed.
Defence by ANSAC:
1. It is an export company organized on the encouragement of the US govt. None of the members had ever
sold Soda Ash to India.
2. Upon request of last manufacturers of India in 1996, the consignment was sent to Premji Trading Pvt
Ltd. who made a shipment to India.
3. MRTP Commission has no jurisdiction. S. 40 is not applicable. Being an FOB sale, property in Soda Ash
transferred at the port of Portland USA. 13(3) was not applicable since there was no agreement amongst
the members which relate to production, storage and supply in India. S. 2(o) not applicable because the
cost is no unjustified, in fact, it is benefitting the consumers.
4. India is a member of GATT and the main objective of it is to flea all restrictions on international trade.
The SET order is against it.
Decision:
The Commission focussed on jurisdiction.
1. Held that the Commission has jurisdiction under S. 14. Cartel is not defined but still the matter falls in
S. 33 and S. 2(o).
2. Predatory pricing is substantiated.
3. Orders of EC have persuasive value in the instant case.
4. There is a prima facie case against ANSAC.
5. Application of injunction is dismissed.
ANSAC appealed to SC on following grounds:
1. Commission had no power to stop export.
2. MRTP Act didn’t confer extra territorial jurisdiction to commission. SC did not go into allegations of
cartelization and held that the commission has no extra territorial jurisdiction and therefore this action
could not be taken against foreign cartels and the import could not be restricted.
Jurisdiction was in question. Association of 6 manufacturers of soda ash in USA (ANSAC). This appeared to be
a cartel since all were producers. No agreement per se to behave in such a way but its not necessary to have a
formal agreement. Their defence was to have easy export.
AMAI (Complainants)
ANSAC was sending it to trade corporation and then sent to India. Cost of production for ANSAC was very less
since it was naturally produced. But sold to India at unreasonably higher price. The transactions were alleged to
be invisible. AMAI asked for injunction. Commission must proceed with inquiry and give injunction to
immediately stop what they are doing, since they are operating like cartel and demanding high money.
Inquiry started against ANSAC. AMAI said that EU has also stopped them according to Art 85 thus should be
stopped but that decision won’t apply to India and Indian Commission is not bound by EC’s decision.
If any activity within the country then only hit by the provisions (MRTP Act) thus ANSAC contended that
transaction is happening in US thus Indian commissions cannot do anything. Also contended that they are not
cartels and encouraged to do exports and thus the association. Also contended that AMAI couldn’t substantiate
the predatory pricing.
Conclusion- Commission said it has jurisdiction and it is a cartel. There is a predatory price as they are
unrealistically low. EC decisions are binding.
Brahma Dutt v UOI
CCI was more of an advisory body. Brahma Dutt filed writ petition in 2005 saying judiciary member should be
a member of the body because it has administrative functions. CCI contended that it needs experts, and it is not
the first commission without a judiciary member. The SC held and instructed for the creation of 2 bodies; one
for advisory function and second for adjudicatory functions- amendment was thus enacted and enforcement was
done.

UNIT II
Market has 2 agents whose interaction leads to the creation of market:
1. Buyer – Consumer and Firms
2. Seller
Monopoly is problematic but not always. Entry barriers are high.
Market structure.
Acquisition- firm is acquiring control over management etc of other but not directly involved.
Factors on which we determine the market structure-
Monopolistic- products are slightly different and many firms are present
Oligopolistic- few players in the market, entry barriers are high- few dominate the market and have intense
competition.
Perfect competition
Pure, Natural monopoly
CIT v Jubiliee Mills Ltd.
S. 2(b), Competition Act, 2002- Agreement: widest possible interpretation- inclusive definition- includes
agreements which need not be enforceable in law- covers even coordinated actions between parties as opposed
to the definition of agreement under contract act which requires offer, acceptance, consideration. Arrangement,
action in concern, understanding.
1. Definition is inclusive and wide.
2. Standards required will be preponderance of liabilities.
3. No direct evidence needed.
4. The court applies this test by evaluating conflicting probabilities and choosing most probable scenario.
5. Essence of meeting of mind is present.
6. Understanding is some sort of behavioural communication resulting in adoption of particular course of
conduct.
7. Coordinated action to achieve desired result.
Uniglobe – formal agreement is not needed between airlines- coordinated actions between them is enough.
Suo Motu case, LPG Manufacturers
Commission referred to RRDA v W and Sons Ltd. wherein it was observed that anything which is not properly
called as agreement but is an arrangement however informal will cover the cases based on meeting of minds
under an arrangement or understanding.
British Basic Slang Ltd. (1962)
Where a party makes a representation of his own future conduct to induce the other to act in a certain way leads
to understanding. (Lord Diplock)
Uniglobe Mod Travels v Travel Agents Federation of India (2011)
1. Informant Uniglobe, registered travel agency, member of IATA, TAFI (Op. 1)
2. TAAI (Op. 2), International airlines including Singapore airlines issued notice that the practice of paying
commission to the agents should be stopped. They are free to charge transaction fee from the consumers.
3. Op. 1 and 2 threatened to boycott Singapore Airlines and later other associations also did so expelled,
filed suit for declaration and injunction, allowed, approached CCI stating that OPs are involved in anti-
competitive activities. CCI found that there was an action in concern- OP 4,5,6 tacitly complied to the
boycott call contravene S. 3. Upheld by COMPAT.
CARTEL
Section 2(c)- read on own
OECD- define cartel as an anti-competitive agreement, anti-competitive concerted practice, by competitors to
fix prices, make rigged bids, establish output restriction, quotas or share or divide market by allocating
customers, suppliers, territories or lines of commerce.
Plus factor
Presumed to have AAEC.
Conducive conditions-
i. High concentration
ii. High entry exit barrier
iii. Homogeneity of product
iv. Similar cost of production
v. High dependency of consumers on products
Defence-
i. Price parallelism- changing their prices to reflect prices of competitor within a market without colluding
or competing
ii. Not illegal on its own
iii. Other evidence in combination with parallelism can lead to charge of collusion- Plus factor (EU and US
adopted this approach)
Rajasthan Cylinders v UOI
The SC set aside orders passed by CCI and COMPAT which had found suppliers of LPG cylinders in violation
of bid rigging in tenders floated by IOCL. In relation to supply of LPG cylinders between 2010 and 2011.
1. CCI findings in this order of Feb 2012 were based on collusion which was circumstantial in nature.
2. Evidence included-
i) Iidentical bits, active trade association, meetings of bidders prior to the submission of bid and
market sharing arrangements.
Held to have contravened S. 33 of the act. Challenge before COMPAT upheld.
Commission while passing order laid down certain plus factors which corroborated its opinion-
1. Small number of players in the market
2. Availability of new substitutes
 3. Varied costs
After reconsideration of evidence and plus factor, SC stated that this is just one side of the coin. Ground realities
must also be analysed.
i) There were only 3 buyers.
ii) Suppliers had no alternative market.
iii) Few number of buyers deterred entry of new market players.
Further held that price parallelism is a result of concerted action and it needs to be examined according to the
market conditons results and economic standpoint.
In Oligopsony,
i. price parallelism is inevitable because prices are generally set by buyer
ii. Sellers can predict the demand and
iii. products are generally identified.
FICCI Multiplex Association v UPDF & Ors.
UPDF- production and distribution of hindi movies- almost 100% market control in movies
Allegations against UPDF
1. Members of UPDF were behaving like cartel- acting in concert- fixing prices- no competition amongst
the members of UPDF- limiting the supply of hindi movies.
2. UPDF collectively boycotted Multiplex- this would obviously result in anti-competitive outcomes.
3. UPDF influenced others also not to release movies in Multiplexes due to a dispute in the revenue
sharing agreement between UPDF and Multiplexes. No explicit agreement which mentioned this
practice wherein they are behaving like cartel but- there was only a coordinated action and desired
outcome which was to eliminate Multiplexes (members). CCI had to decide which section would be
applicable- said that this is a concerted practice and anti-competitive because eliminating all players in
market. Also said that this was a violation of 3(3)(a), (b) and (c).
Contentions of UPDF- not concerted action because meetings were not about this and didn’t happen daily.
Number of meetings weren’t necessary, only imp point was the desired outcome gained out of it. Also
boycotting Multiplexes was blatant violation of 3(3).
SK Translines vs Maharashtra state warehousing corporation ltd.
Corporation informed tender and were receiving similar bids and a situation of cartel was arising but HC
refused the argument.
(Online tenders invited by the corporation, rejected on the ground that the petitioners formed cartel) they have
similar IP addresses, similar timing of tender and meeting HC held that evidence was not enough to assume
cartel formation.
2(f)(i) is focussing on goods and a producer while purchasing raw material will also be considered as consumer.
(ii)  hiring of services for your use or for commercial purposes
CONSUMER UNDER COMPETITION ACT
how is it different than consumer protection act
Travel Agents Association of India v Balmer Lawrie Co. Ltd.
Balmer Lawrie and Travel Agent was registered under Companies Act, 2013.
Allegations against BL- BL and Ashoka Travels is abusing dominant position in market by agreeing with govt
of india. Govt released memorandum which says only they will book tickets for officials.
Anti-competitive agreement under S. 3- BL and AT have agreement with govt that only they will offer services.
Also this leads to denial of market since no new companies can come since all officials can only book tickets
through AT.
Govt office memorandum was sought to be removed as a relief.
Under S. 33, we should be given ex interim injunction. Thus notice was sent to them to explain. But Opp Party
and Informant did not show up.
CCI said: It is obvious that the main objective of this OM is to rationalize the expenditure by taking advantage
of competition among airlines. But it was said that the memorandum merely instructs the officials to follow the
rules under it while booking tickets out of which one was to book one giving the best price which was not abuse
of dominant position. Only rationalization of expenditure. No presence of anti-competitive agreement. If govt
wants to only buy tickets from BL then it is exercising its consumer choice. Govt is not falling under category
of enterprise but consumer. Impugned memorandum is only for rationalizing expenditure- said that govt
officials have a choice. Para 9.3 “only” is not what it is.
DEFINITION OF ENTERPRISE
1. S. 2(h)- It means a person or department of government.
2. Definition of enterprise is wide enough which takes into its fold, person, department of govt.
3. Person or department of govt. involves in activities like production, supply and distribution.
4. The exclusion part of the definition relates to the activities of govt related to sovereign functions
(something which is not delegable and only govt can do) and carried on by the departments dealing with
atomic energy, defence and space.
5. Functions which govt can do but is amenable to jurisdiction of CCI- public-private partnership
6. Govt is not involved in production supply etc and mere customer and thus not an enterprise. And
department of govt was not made a party too.

1. SOVEREIGN FUNCTION
India Trade Promotion Organization v CCI (2016)
It was held that sovereign functions are those which are in alienated. E.g. Enactment of laws, administration of
justice, maintenance of law and order, signing of treaties etc which cannot be delegated to a private player. In
contrast, the activity relating to trade, business, commerce or like is a non-sovereign function as the same can be
performed by any private party. E.g. postal services, financial institutions etc.
2. ACTIVITY
- should not focus on the form but only the function
- whether there is any commercial activity or not
- economic activity can exist even without profit.
- Profession (advanced education/skills/learning needed to acquire it, then profess it)
- and occupation (regularly occupied with it to earn money, not necessarily need for advanced education)
are included in activity.
- Plants are not defined but factories are. Branch offices, subsidiaries etc are included.
- S. 2(z)
Industries and Commerce Association v Coal India Ltd.
Formulation of policies does not fall in the category of commercial or economic activity.
Independent comment- However, if the state or its agency who are vested with exclusive rights or monopoly
and conducts trade or business do not fall within sovereign functions and is amenable to the jurisdiction of CCI.
The word ‘activity’ does not admit any restrictive meaning and for an entity to fall within the definition it must
be engaged in any activity which is relatable to economic and commercial activities specified therien.
Malwa Industrial and Marketing Ferti – Chem Cooperative Society Ltd. v CCI
It was held that the registrar of the society who has issued a circular under exercise of its power under the
Punjab Cooperative Societies Act was an enterprise and within jurisdiction of CCI.
CCI v Coordination Committee of Artists and Technicians of West Bengal Films and Televisions
It was observed that the notion of enterprise is relative. Authority should adopt functional approach focussing
on activity rather than the form. Explanation- It means that the undertakings engaged in commercial activities
wherein it is apparent that the goods and services are offered which could potentially yield profits will be
covered under the Act. Profit motive is not the only criteria. Explanation includes profession, any type of work
which needs special training, occupation, a job, regular activity to earn livelihood. The definition not only
covers enterprise but also its divisions, units or subsidiaries. The term ‘plant’ or ‘factory’ in essence mean
establishment for production. Factory is defined in Factories Act to mean any premises in which manufacturing
process is being carried on.
Delhi Cloth and General Mills Company Ltd. v Regional Provident Fund Commissioner (1961)
In EU, undertaking is not defined but there’s no mention of enterprise.
EU LAW
Hofner & Elsner v Macrotron GmbH
ECJ’s case law states the concept of an undertaking encompasses every entity engaged in economic activity
regardless of its legal status or the way in which it is financed.
MOTO E case (ELPA)
Facts: Sports authorities. In EU, Moto E were organisations which organized motorcycle competitions, for
which govt’s authorization was needed. Needed to get consent of legal representative. Official representative
was ELPA to give consent. Refused to give consent. So the state said that authorization could not be given
without official representation’s consent.
Why went to court: Moto E went to court (ECJ) asking for relief/compensation, contended unlawful refusal for
authorization. Unlawful also on grounds of abuse of dominant position of ELPA under Competition Law.
ELPA has a regulatory position since it makes rules, grants authorizations etc. Not purely regulatory, also
economic activities since they get sponsorships, organize competitions. But also countered with the fact that
they are non-profit. Also dominant position per se is not problematic unless being abused. But Moto E said that
since govt. has given exclusive power to ELPA, it is able to abuse its dominant position in market. ECJ further
analyzed.
Issues:
1. Whether ELPA is an undertaking or not?
ECJ held: Undertaking remains undefined in law but interpreted to be economic activity. Also applied
functional test. Pure regulator would be exempted but ELPA is involved in economic activities as well.
Court said in case of mixing of activities like ELPA, it is still an undertaking and thus wouldn’t be
exempted.
2. If state is providing position of strength then would it constitute a dominant position?
ECJ held: Dominant position empowers it to distort competition in market. ECJ interpreted it as position
of strength. ELPA is making rules for other organizations to enter the market thus it would be of
dominant position.
3. Whether there is an abuse of dominant position?
 ECJ held: ECJ said this leads to inevitable abuse since it has already been given the power to make rules
for other organizations- obviously would make rules favouring its own.
We are only concerned with the abuse of dominant position, merely dominant position is not enough.
INDIA
Uttarakhand Agricultural Produce Marketing Board v CCI (2017)
Even a govt. entity with exclusive rights, licenses cannot abuse its dominant position.
Definition of undertaking and enterprise under MRTP Act, 1969
Amendments, difference
Sunil Bansal v Jaiprakash Associates & J.P. Infratech
1. Are real estate businesses enterprise? Whosoever playing in such activity falls in the definition of
enterprise. (DLF case)
Definition of goods cover allotment of houses.
Allegation of unreasonable arbitrary conditions upon allotees of house against JAL before CCI- under abuse of
dominant position.
Jurisdiction challenged before COMPAT
Consideration in agreement was left blank.
Undertaking was being taken from allotees.
Clause to make unilateral changes to construction.
Absolute right to reject or allot apartment- did not assign any reason for the same and also, the application was
not revocable.
Shall not be responsible for the delay.
Whether CCI will have jurisdiction when real estate businesses are involved?
Contention of respondents- Houses are not goods- immovable property are excluded- no right to investigate in
the matter- no jurisdiction
Ericson Monsanto v
Terms imposed by license holders was challenged by CCI
Monsanto was patent holders for genetically modified seeds- also imposing unreasonable conditions.
CCI lacks jurisdiction to decide on licensing. Contentions: Licensing is not a sale and thus goods aren’t
involved- no CCI
Patent licensing can only be decided according to the comprehensive procedure mentioned in patents act.
Machinery- necessary expertise for licensing matters
Chapter 16 of patents act- specifically deals with inquiries
Decided Bharti Airtel case
Resp- Controller of patents oversees the abuse of patents- then why would CCI be needed
Informants- Patents act is inadequate- proper procedure for assessing anticompetitive behaviour is not present.
S. 60 of competition act- provides power that CCI can interfere in any sector whenever anticompetitive activity
is going on
Subject matter helps in differentiation of special and general law- special law’s authority will have jurisdiction-
have to consider subject matter. E.g. licensing is subject matter in this case, thus decide which law will apply
Also look at intention of statute. Patents Act main intention is not to curb anticompetitive activities but some
provisions relate to abuse of licensing
Definition of goods in MRTP- did not include debentures
Sunil Bansal v Jaiprakash Associates & J.P. Infratech (2015 COMPAT)
JAL is in real estate business.
Allegation by the informant (allottee of the house):
Abuse of dominant position- imposition of highly arbitrary, unfair and unreasonable conditions in the
agreements for allowing residential apartments.
Investigation was directed by CCI. Contention-
1. CCI has no jurisdiction.
2. Apartments are not goods.
3. Sale of immoveable property.
Held-
Housing activities are services and covered under the Act.
Neeraj Malhotra v North Delhi Power Ltd.
Abuse of dominant position.
Anti-competitive agreement by and between opposite parties with respect to supply of electricity and held to be
services under 2(u) within jurisdiction of CCI.
Definition of ‘manufacture’
1. UOI v Delhi Cloth & General Mills Company Ltd. (1963 SC)
2. UOI v JG Glass Industries Ltd.
CERC v TPK Farma Company Ltd.
Whether linking of equity shares with debentures is within jurisdiction of CCI or not?
MRTP said- Debentures are not covered under MRTP Act and thus not within our jurisdiction. It only talks
about shares and stocks.
As far as UTP or RTP is concerned, since share and debentures are not trade practice. If you are in a business or
industry, then there shall be a trade practice but not in case of shares or debentures. Company is not offering
services to investors (just shares/debentures). Thus, this does not come within jurisdiction of MRTP.
Equity shares which are linked to secure, redeemable and non-convertible shares.
Question raised- whether linkage is a tied-up sale and prohibited under S. 1(b) of MRTP.
Held- shares before allotment do not come into existence. Companies are not dealing in shares and not carrying
on any trade practice, whether with or without linking. It is only to raise more capital – no relation with trade.
Definition of MRTP, Section 33, Trade practice
JP Sharma v Reliance Petrochemicals Ltd.
Shares before allotment, are they goods? Right or liability of shares cannot arise before allotment, maybe after.
Shares are not considered goods before allotment since they don’t even exist.
Question- whether debentures came into existence before allotment. Held that the provision of RTP and UTP do
not apply because they are not goods before allotment (relied upon __)
Deepak fertilisers and chemicals Corp Ltd.
Debentures were secured by mortgage. 2(7) has express exclusion of actionable claim and as debentures are of
the nature of actionable claim, they are not within the jurisdiction of MRTP. It is also not a service.
Held debentures secured by mortgage in respect of specific property constitutes actionable claim- not goods
under 2(7). It makes no difference whether they are convertible or ordinary.
Even assuming if they are goods prior to allotment. No trade practice is involved. Also no service is provided
under 2(r) to the investors.
Morgan Stanley Mutual Funds Case- Consumer protection Act, 1986
SC said that it is only after allotment of shares that the right may arise as per AOA but certainly not before.
AMENDMENT TO MRTP ACT IN 1991
Including issues relating to shares before allotment. However, SC has still held after the amendment that right
exists only after allotment.
Crux-
1. Debenture before allotment- not goods.
2. If debentures are allotted to the holder, they are just an instrument of debt wherein the company merely
and are in nature of actionable claims. Shares, debentures are ways to raise capital- no trade or trade
practice involved. Commission has no jurisdiction in such matters.
DEFINITION OF PERSON
Dhanraj Pillai v Hockey India
They are international and national authority regulating running sports of Hockey considered as person. CCI
observed it is not necessary for the person to carry any business. Even the regulation of sports would qualify a
person to be an enterprise if there activity affects the provision of services. (Organizing sports, radios, television
rights sponsorship etc. both FIH and HI regulate hockey. They qualify as an enterprise. They carry out
commercial functions also amenable to the jurisdiction of CCI.
When association is threatening members
Whether this activity is causing denial of market and AOD.
Held- Film employee Federation of Kerala- they have significant market power thus dom
Contravention of anti-competitive agreements and AOD-
Specific laws for disputes in traders so should CCI interfere or not- opposite parties were contending that we are
union and work for welfare and thus should not be covered under CCI, have specific laws for it.
CCI- CCI rejected argument of opposite parties saying that they have jurisdiction. Trade Associations provide
platform for betterment of trade. It further noted that it lays down standard for fair trade. Association is
established legally. Persons should resolve first then CCI should come. But if their act says nothing about it then
CCI is automatically activated. Also observed that Trade Unions Act and Competition Act are complementary to
each other.
Informant:
TG Vinay Kumar
Opposite Parties:
1. Association of Malyalam Movie Artists
2. Film Employees Federation of Kerala (FEFKA)
3. FEFKA’s Director Union
4. FEFKA’s Office Bearers
Informant- movie director alleged before CCI that associations try to force actors, technicians, producers etc.
not to work with him due to his efforts to streamline cinema and working conditions of artists. Initiated Cinema
Forum. DG investigated, CCI found that the impugned decision of the associations are in contravention of S.
3(3). Passed cease and desist order and imposed penalty.
Opposite parties contended that we are registered trade unions and the disciplinary actions taken by them
against their members in accordance with their by laws cannot be looked into by the CCI. Commission rejected
these arguments, held that association governed under different laws are amenable to jurisdiction if found
indulging in anticompetitive activities- Operation of statutes are not confronting with each other but
complimenting wherein one is created with the objective of protecting legitimate trade union activities and the
other is to protect their competition in the market.
Manju Tharad M/S Film Calcutta v Emita Kolkata & Censor Board of Film Certification in Kolkata
EIMPA does not allow registration of regional and national languages films which are dubbed in Bengali
language, unless, the films are produced in language of the state where EIAMPA operates. This attitude is unjust
and unfair and the informant is not allowed to do a fair business. By directing the exhibitors to not screen the
film. DG completed investigation, said that show cause notice issued by parties is not termed as abuse which is
anti-competitive in nature. Informant could not give any evidence that there was any anti-competitive activity.
Allegations of informant- DG concluded that there were no anti-competitive elements.
Clause 12- no application for distribution rights in respect of any movie which is in language of eastern india,
registration can only be done by the members- this was anti-competitive because it was affecting producers and
also the consumers- as they couldn’t watch any movies other than the ones in eastern Indian languages. Apart
from Clause 12, members cannot deal with non members since it is restrictive in nature. Activities done by
association is driving competitors from the market by issuing circulars, letters etc for violating rules.
Leads to foreclosure- in nature of distribution agreement.
Informant-
CCI what are the issues?
- Whether association is an enterprise or not?
o It is not an enterprise because it is not engaged in any kind of economic activity.
o Case 25/2010 referred.
o The members cannot fall under section 4 but can fall under section 3(c)
- Whether rules are under exami
o Association themselves are association of enterprise
- Whether ri
18/8
RELEVANT MARKET
(r) “relevant market” means the market which may be determined by the commission with reference to the
relevant product market or the relevant geographic market or with reference to both the markets;
Relatively smaller concept as compared to market in general- determined and delineated by the CCI
Relevant product market
Assume anti-competitive activity by a firm- see the interchangeable products available in the market.
Delineation is done in terms of geographical and products or in terms of products/services.
Decide relevant factors or elements on the basis of which the relevant market is delineated- main element is
interchangeability (as substitute of the given product, whether the buyer will rely on some other available
product- what is the customer reaction on the demand side)
(t) “relevant product market” means a market comprising all those products or services which are regarded as
interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their
prices and intended use;
Factors which are used to delineate the relevant product market other than interchangeability are:
1. Price increase- SSNIP- small and significant non transitory increase in price- the change in price that
significant so as to warrant a customer reaction to switch from butter to margarine- change in price must
be for a significant period of time for assessment of customer reaction which must not be transient and
be permanent.
2. Consumer reaction
3. Smallest market- small change in price to delineate the smallest market- if big market then difficult for
CCI to identify the anti-competitive activities thus this a approach that they resort to. If high increase in
price then distant substitutes will come into picture and lead to undesirable consequences- will be
difficult to establish dominance or monopoly if substitutability increases and difficult to determine
relevant market.
4. End-use of product.
5. Economic agents who help in delineation- sellers selling similar products, buyers who are purchasing,
wholesale distributors- delineate market based on data- ask questionnaire etc. CCI demands data from
ministry of stats.
6. Other factors- Page 43 of module.
Relevant geographical market
Taxi drivers in a particular area- location within which enterprises are playing and interacting with suppliers.
Substitutes are relied on even here.
E.g. Alto car has some specifications- if it increases the price then consumer will switch to nano/other small
cars. Geo market is India, and similar products are included in product market. If foreign firm is selling similar
small cars then consumers in India will not buy these cars since outside geo market. Focus on substitutability of
geo market. Regulatory/tariff barriers are also imp to determine geo market. Cheap products have less
substitutability in terms of geo market because of transportation costs, language etc.
Shamsher Kataria v Hondal Siel
OEMs- authorised dealers/independent dealers and repairers
1. Primary- cars
2. secondary- provided spare parts, service repairs
What is the relevant geographic market- entire India, because conditions of competition in whole country is
homogenous (S. 2(h)). There must be an AAEC. Also held that the OEMs, authorized dealers’ agreement is
leading to AAEC.
Conditions of competition for sale of spare parts and after sale repair maintenance services were homogenous
across the territory of India. This matter related to secondary market.
Authorized dealers were helping exclusive distribution agreements with OEMs.
Aniket Sitaram & Ganesh Agency Case no. 25 of 2016
Distribution of bottled water- relevant market was Mumbai- conditions of competition were homogenous
because transportation costs, logistics etc.
Magicbricks Case no. 23 of 2016
MB is an online market player- relevant geographic market- entire country and not specific states
Online and offline services of brokers were not established while defining market, not distinguished in
determining relevant product market since alternative channels for delivering same services.
Relevant product market- Real estate services
Held: There are alternative channels of services delivering same services. The services offered by them from
demand and supply side are same. Conditions are homogenous throughout the country. Relevant geographical
market is India.
Sunil Bansal v Jai Prakash Associates
Entire NCR region must be included in market because wanted to increase boundary. However, CCI held that
Noida and Greater Noida were distinguishable from conditions prevalent in other NCR region which were
suggested as substitutes.
DG noted that residential units were referred in this case. Any buyer who decides to buy a unit for residential
purposes in N or GN, then he will not substitute the unit from the unit in the other area for the following
reasons:
1. The way land was acquired, proximities to other places
2. Price difference
3. Transportation costs
4. Other amenities
Thus, DG concluded that conditions are homogenous in N and GN.
Para 16,75,86,96,97,98,99
Observed by CCI that mere 5% increase in price wouldn’t make the consumer shift his preference in location.
Findings of DG were upheld.
DLF case
Findings of CCI:
Gurgaon is a distinct geo market. The area has distinct character and unique circumstances which leads to
consumer preference from the demand side. Talked about being focused on genuine buyers. Product market is
real estate services. COMPAT upheld this.
Classification of consumers on the basis of genuine buyers and speculators.
Vilakshan Kumar Yadav v ANI Technologies Case no. 21 of 2016
Taxi services were the relevant product market. Consideration by CCI- generally transportation is controlled by
state in an area and thus conditions of competition are homogenous throughout. Thus, city or state would be the
relevant geo market which included all taxi operators (Delhi)- also taxi services were substitutable.
Consumer Guidance Society v Hindustan Coca Cola Private Limited & INOX Leisure Private Limited
Agreement for exclusive distribution of bottled water and soft drinks (product market), between HCCPL and
Inox. HCCPL supplied the product to Inox. The price was in question by Consumer Guidance Society saying
that the prices in Inox were discriminatory and unfair. Narrow delineation of market is the norm- CCI try to
delineate as much as possible so that dominance can be established but the opposite is seen here. DG said the
relevant geo market is where the multiplexes being operated affecting the entire market of bottled water and
drinks.
CCI refused to narrow down the geo market to only the area where the multiplexes were. Only 38 multiplexes
were being operated by Inox- question was with respect to entire market of bottled water- market share of them
is only 0.3% in the open market and consumers are not compelled to buy from them at all, substantial market
distortion or AAEC because of this activity is not created in the open market. Area of operation which is
question is very less and has no potential to cause AAEC which is an important factor to establish AoD. Geo
market was entire India.
North Delhi Power Limited Case No. 6 of 2009
Product market was services of supply of electricity in Delhi.
Operators/Licensees operating in specific areas under Govt of Delhi- BRPL, NDPL and BYPL- no other
licenses were given in the area.
Abuse of dominant position by these operators in the market.
CCI found that these are the only service providers and no substitutes are there in the area. Conditions by the
govt were homogenous. Relevant geo market was the area where they were operating. Limited geo area.
Narrow approach.
Findings:
1. Engaged in supply and distribution of electricity to the end consumer in Delhi
2. Conditions for supply of goods and provision of services were distinctly homogenous from adjoining
areas.
3. Absence of parallel licenses, no substitutes available, no other company could operate in that area.
4. Relevant product market is distribution and supply of electricity, relevant geo market is area of operation
of the 3 licensee companies.
Vodafone Case No. 4 of 2016
The question was of area comprising of geo market
Vishwambhar was informant
CCI found that Spectrum is obtained through auction- condition for competition for wireless operator is
homogenous and thus the geo market is divided circle wise.
Vishvambar vs Vodaphone
Spectrum is a primary input to provide wireless mobile communication services which was allocated via
auction. India divided into 22 circles separate auction for each circle. Therefore, each circle will constitute
separate geographical market because conditions of competition are homogenous within circle.
Vinod Kumar Gupta & WhatsApp Incorporation Case
It’s a messaging app, has no relevance with geographical internet access. Service is worldwide. In some
countries conditions may vary and, in this case, it was India. Relevant product marketing for instant messaging
services using consumer communication app.
SEC 2 (t) – RELEVANT PRODUCT MARKET
In house production – when something produces for internal use, then it is not included in product market.
Sec 19 (7) - The Commission shall, while determining the “relevant product market”, have due regard to all or
any of the following factors, namely:— (a) physical characteristics or end-use of goods; e.g. colour (b) price of
goods or service (c) consumer preferences; (d) exclusion of in-house production; (e) existence of specialised
producers; e.g. which are unique in characteristic like royal royce (f) classification of industrial products.
Picasso Animations case no. 75 of 2016
Commission delineated the relevant market for specific characteristics for animation course. Not substitutable
for other curses. Other courses were substitutable. Court said this course was unique, had specific
characteristics, hence not substitutable. Market for providing animation related educational services.
South-West India Trading Machine Private ltd. vs Holland Construction India Pvt. Ltd.
Holland were involved in production of manufacture of different kind of manufacturing equipment. Each
equipment has different use and hence constitutes separate markets.
Magic brick case
CCI noted that although the online portals were engaged in providing real estate services, they were not very
distinct from the services provided from traditional brokers. The relevant product market were the services of
real estate brokers/agents.
Deepak Verma & Clue Network Pvt. Ltd.
Online consumers may shift from online portal to offline and vice versa. If price increase in online market, then
consumer will shift to offline market and vice versa. Different channel of servicing of same services.

Ghaziabad Development Authority Case 2018

Relevant product market was market for provision of services. Development and sale of no cost residential flats
under affordable schemes for economically weaker section.
Clue Network Pvt. Ltd.
Online consumers may shift from online portal to offline and vice versa.
Matromony.com Ltd. vs Google LLC 2018
Allegation – Google was dominating its power. Manipulating the results. Trying to promote its vertical partners.
Google is using the data and manipulating the results in advertising pages. Google is having exclusive
agreements with certain search engines.
DG delineated two relevant product market – online general web search service in India and onlione search
advertising in India. These were the relevant product market.
Meru Travels Solution Pvt. Ltd. vs Uber India Systems Pvt. Ltd. 2021
Both are radio taxi operators in a specific area. Allegation was uber was abusing its dominant power in the
market by predatory pricing and exclusive arrangements with the drivers. Rating system is also anti-
competitive. Opposite party argument – facing competition from public transportation. CCI said they have very
different relevant market. Those who use cabs do not use public transportation generally.
What is the relevant product market? Market for Radio Taxi Services and geographical market is Delhi NCR.
Vinod Kumar Gupta case (WhatsApp)
Product market- instant messaging services
Geographical market- India
(7) The Commission shall, while determining the “relevant product market”, have due regard to all or any of the
following factors, namely:— (a) physical characteristics or end-use of goods;
(b) price of goods or service
(c) consumer preferences;
(d) exclusion of in-house production;
(e) existence of specialised producers; (exclusive- e.g. Rolls Royce purchaser would only want to buy that and
not any other)
(f) classification of industrial products.
25/8
Demand side substitutability – how easily the consumers can switch to other suppliers. – how easily can other
consumers switch from Alto to other similar Indian based small cars. – taxis and metros are not substitutable.
Supply side substitutability – how easily the producers/suppliers can switch. – this determines the competition –
if no competitors for the cars then there’s no supply side substitutability.
Maharashtra State Power Generation Company v Mahanandi Coal Fields & Coal India Ltd. Case No. 3 of
2012
Informant- Power Generation Company
Opposite Party- Coal India Ltd.
Allegation was against CIL and other subsidiaries. Fuel Supply Agreement was questioned by the power
generation companies. Different prices are charged from public sector and private sector units. Allegation of
AoD. Delineation of relevant geographical market.
DG found- did delineation of relevant market- geographical boundaries were India- since conditions of
competition were homogenous since no competitior of CIL and only regulated by the Govt of India. Only CIL
provides non-coking coal to companies.
Product market- production and sale of non-coking coal to thermal power generators in India. Opposite parties
contended- Demand side substitutability is travelling across boundaries as the products can also be bought from
outside.
Findings of CCI:
1. Concurred that the delineation is limited to India. Took into consideration demand and supply side
substitutability and noted that product was non-coking coal which is used as raw material in thermal
power plants and the product has no demand side substitutability. The boilers work on particular
specifications and cannot use other things like oil or gas, only need non-coking coal. Oil and gas are not
viable as substitutes. Only 30% of the imported coal is able to be used with 70% of blending of the
Indian coal since only Indian coal can meet the characteristics which is required. Thus, max 30% coal is
able to be bought in case when Indian ones are not available. Also expensive so no consumer will buy it
willingly. CCI concurred with delineation of DG.
2. Consumers are completely dependent upon CIL. Thus, CCI held them to be dominant.
3. In view of provisions of Coal Mines Nationalization Act, 1973, production and distribution is entirely in
the hands of government. There is no question of supply side substitution because entry barrier is
imposed by the policy measures of Govt of India and the aforesaid Act- monopoly vested by the statute.
No competitive pressure.
First order of CCI endorsing the principle of competition neutrality under the act.
CIL v CCI 2023
1. CIL contended that they are not bound by Competition Act, 2002 because they are governed by the Coal
Mine Nationalization Act.
2. The actions of the appellants can be challenged in proceedings in judicial review. There are forums other
than CCI which can look into it such as controller of coal whereunder the actions of appellant may be
challenged.
3. If there is such a remedy available then it does not deny the access of a party to CCI for such
contravention which falls in the Competition Act, 2002.
4. The undertaking is not carrying on business of mining in such a manner that it can fall within an
exception of sovereign function.
5. Government department here is also covered in the definition of enterprise and being stayed, it is also
obliged to bear in mind the directive principles.
6. S. 19 (4)(g) declares dominant position whether acquired as a result of statute or by virtue of being a
govt company/PSU is within the jurisdiction of CCI.
Classification of consumer as factor for delineation of relevant product market
Saint Glass India Ltd v Gujrat Gas Company Ltd.
Floating glass company- need gas to heat industrial unit which is being supplied by Gujrat gas company- Under
GSA, GGC is abusing its position and thus imposing unreasonable conditions. Found that 2 types of industrial
consumers- non-administered price mechanism (price is not regulated by the govt.) and administered price
mechanisms (the price is regulated by govt.)
Product market which was delineated
Supply of non-APM natural gas to industrial consumers was the relevant product market.
Services
1. Under 2(r) of MRTP
2. Under 2(u) of Competition Act
Overlap in jurisdiction due to deflation in con
Exclusion of free of cost service. Also excluded in CPA.
Consumer Unity and Trust Society Jaipur v State of Rajasthan (1989)
It was held that whatever treatments and free of cost services provided in charitable hospitals to the public are
not services for the purposes of CPA.
BL Gupta v Army Welfare Housing Organisation (1994)
Organisations made houses for army officials for some consideration- but later claimed that we are following no
profit no loss and the consideration was just to not incur any loss. But forum said it was irrelevant and it was
still included in CPA and thus amenable to the forum’s jurisdiction.
Arshiya Rail Company Ltd case
Transport services were held to be
Jupiter Gaming Solutions Pvt Ltd v Govt of Goa 2010
Lottery services should be considered within services under 2(u) or not?
Govt of Goa invited tenders in which one was given by Jupiter. The bidders said that govt was abusing its
dominant position in lottery service sector. In the tender document, qualifications asked for by the govt are
discriminatory and creating entry barriers for competitors. The asset value threshold being asked for is very
high. Jupiter said that terms of conditions of tender were not fair. The impugned conditions are creating entry
barriers, creating denial of market access to new comers and are discriminatory.
Main question- whether lottery services fall under services under 2(u)?
CCI said that they do come within the purview of 2(u) since the section itself is broad- any services to potential
users. CCI rejected govt arguments that they were not operating any services.
Free of cost services are also included.
E.g. Life insurance business was nationalized due to its social security character. LIC was the sole govt
provider. It was argued that since social security is involved, should not be considered services. But in most
judgements, it did come under it since it is still a business (not free of cost, take premium amount) and not a
charity.
CCI v State of Mizoram 2023
SC upheld CCI’s approach that lottery services come under the purview of “services” under 2(u).
What is turnover- penalty is imposed on this- Excel prop care case- intro- MRTP repeal reason
29/8
TURNOVER
There is a difference between turnover and revenue and profit.
S. 2(y): “turnover” includes value of sale of goods or services; income generated by sale of goods and services
for a specific period of time.
However, revenue is not limited to the sale of goods and services.
However, profit is something which excludes the input costs from the amount generated.
Relevant turnover
Para 9 of CCI Order (MCX case)
Penalty was imposed, association is proved and leveraging the position in other segments and trying to abuse
their position.
Excel Crop Care Ltd. v. CCI, (2017) 8 SCC 47
SC pronounced judgement related to method of penalty. Here relevant turnover was talked about. COMPAT and
SC talked about it.
Background:
FCI invited tenders for preservation of food grains. Aluminium phosphate tablet (ABT) was used for
preservation. They were core manufacturers of APT. The bidding was done for the period of 2007-09. FCI later
found that the bids by 4 manufacturers were identical, since the quoted prices were identical and when one is
abstaining, the other one is doing the same and thus seem like cartels.
CCI using circumstantial evidence from 2007-09, confirmed cartelization. It imposed penalty of 9% of total
turnover for the preceding 3 years.
Appealed to COMPAT, which upheld the finding of cartelization but modified the penalty. Ruled that penalty
must be imposed on relevant turnover and not total turnover. Just have to check in which market the
infringement is happening and will be unfair to impose penalty on overall turnover.
SC upheld the tribunal’s view of relevant turnover. Some of such enterprises may be multi-product and single-
product in respect of which agreement is arrived at. And thus, if concept of total turnover is applied then it shall
be highly unfair and inequitable since the multi-product one will be earning more and the single one will be
earning less.
SC further said that there is no justification to the fact that infringement involves one product but penalty is
being imposed on all products. Also talked about doctrine of proportionality, which leans in concept of relevant
turnover- the punishment should be in proportion to the infringement. The penalty’s object is to discourage such
practices but not finishing the enterprises entirely. Further elaborated, this kind of penalty cannot be in a country
like India where rule of law prevails.
Doctrine of purposive interpretation- intention of statute is to discourage them.
There has to be a link between damage caused and profit accrued to the cartel. Quoted EC.
Amendments to section
Cited by SC
Southern Pipeline Contractors Conrite Walls (Pty) Ltd. v. The Competition Commission Page 69
Article 23(2)(a)of regulation no. 1/2003  guidance to commission in imposing fines where it is provided that it
is appropriate for the commission to refer to the value of sale of goods or services to which the infringement
relates.
Relevant turnover has to be applied in digital economy otherwise it is highly inequitable.
The Competition Commission of India (Determination of Turnover or Income) Regulations, 2024
Chapter 4- Anticompetitive Acts
Jyoti Swaroop v CCI
Mr. Jyoti Swaroop:
1. Terms imposed by developers were unfair and one sided.
2. Concerted practice and understanding between real estate developers.
3. There is a tacit understanding amongst all real estate players in the market. Referred to an article by
Economic Times in which the chairman of CREDAI stated that all the members will be signing code of
conduct. Statement indicated collusion between the developers. There was an understanding amongst
various real estate developers which makes it mandatory for the buyers to purchase parking space,
violation is under S. 3(4)(a). Agreement between the developers also exists such as charging of interest
rates, one sided arbitrary clauses, forfeiture of advance and builders freedom to increase the floors.
4. The informant also filed a copy of buyer’s agreement of some leading enterprise and submitted that
though not identical, have certain similarities, are exploitative.
To this, the HC said:
1. Any arrangement or understanding, even if relied informally will be covered under S. 2(b) if the act of
the parties was found to be in pursuance of some common intention, it will be an agreement within S.
3(1) and merely because 2 or more persons were doing similar or identical acts, it could not amount to
an agreement under S. 3(1) unless some meeting of mind or common intention is established.
9/9
Vertical agreements
Ghanshyam Das Vij v Bajaj Corporation & Ors.
Ors.- Op2, Op3, Op4.
Op3 was given an order to supply hair oil to GDV- GDV placed order and paid- did not supply it- breach of
contract- Op3 said that the distributor was allotted territory and the area of GDV exceeded that limit and thus
goods will not be supplied- contending limitation of geo territory by vertical agreement- refused to deal with
GDV.
Vertical agreements are anti-competitive. DG concluded that there is a contravention and such agreements are
anti-competitive.
Impact of such restrictions in market would be negligible.
Deminimus rule