10 Landmark Competition Law Case Laws | 2022 | Expert Analysis and Explanations

Get the inside scoop on the top 10 rulings on Competition Laws that everyone is talking about! Our team of experts at Taxmann has compiled a list of landmark rulings from 2022 that are trending among the stakeholders. The judgments are selected on the basis of their relevance to the practising professionals, and settlement of a challenging position of law.  The Gist of these cases is presented hereunder:

1. CCI has jurisdiction over anti-competitive aspects of lottery business though lottery may be res extra commercium: SC

Case Details: Competition Commission of India v. State of Mizoram
Citation: [2022] 134 taxmann.com 199 (SC)

Judiciary and Counsel Details

• Sanjay Kishan Kaul & M.M. Sundresh, JJ.
• Rajshekhar Rao, Sr. Adv., Arjun Krishnan, AOR, Ms Khushboo Mittal, Sumit Srivastava, Advs., Brijender Chahar, Sr. Adv., Rajesh Kumar, AOR, Varun Mudgil, R.K. Srivastava, Dr Pratyush Nandan, Arjun Garg, Aakash Nandolia, Adv., Sagun Srivastava, Advs., Kedar Nath Tripathy, AOR, Siddhesh Kotwal, Ms Ana Upadhyay, Ms Manya Hasija, Ms Pragya Barsaiyan, Akash Singh, Advs., Nirnimesh Dube, AOR, Nikhilesh Krishnan, Pranav Malhotra, Advs. & Shantanu Kumar, AOR for the Appearing parties.

Though lotteries, being akin to gambling activities, comes under purview of doctrine of res extra commercium, that will not takeaway aspect of something which is anti-competition in context of business related to lotteries and thus, CCI has jurisdiction over anti-competitive aspects of lottery business

Facts of the Case

The State of Mizoram had issued an Expression of Interest (EoI) inviting bids for the appointment of lottery distributors and selling agents for State lotteries regulated by the Mizoram Lotteries (Regulation) Rules, 2011 framed under the Lotteries (Regulation) Act, 1998.

The EoI was for appointment of lottery distributors/selling agents to organise, promote, conduct, and market the Mizoram State Lottery through both conventional paper type and online system. The EoI specified that the minimum rate fixed by the Government of India is Rs.5 lakh per draw for Bumper and Rs. 10,000 per draw for others – bids less than these rates would be summarily rejected. In pursuance of the EoI, five bids were received of which four which quoted identical amount of Rs. 10,000, were selected. The State had also asked the successful bidders to furnish a security and deposit amount

The Respondent No. 4 made a complaint to the CCI under Sections 3 & 4 read with Section 19(1)(a) of the Competition Act alleging that the State of Mizoram abused its dominant position as administrator of State lotteries, by requiring distributors to furnish exorbitant sums of money towards security, advance payment, and prize pool even before the lotteries were held.

Respondent No. 4 alleged that the bidders had cartelised and entered into an agreement that had an appreciable adverse effect on competition in the lottery business in Mizoram. There was bid-rigging and a collusive bidding process which violated Section 3(1) read with Section 3(3) of the Competition Act, and also caused grave financial loss to the State of Mizoram.

The CCI’s Director General (DG) found prima facie evidence on cartelisation and big rigging against the bidder companies, but the case against State was dropped by the DG.

The State of Mizoram moved to the High Court by filing a writ petition challenging the adverse remarks made against it by the CCI. The High Court by an interim order halted the CCI final orders. The High Court opined, was applicable to legitimate trade and goods, and was promulgated to ensure competition in markets that are res commercium.

Thus, lottery activity being in the nature of res extra commercium could not be covered by the Competition Act and consequently the CCI did not have jurisdiction to entertain the complaint of respondent no. 4, the High Court ruled. The CCI moved to the Supreme Court in appeal against the order

Supreme Court Held

The Supreme Court observed that though lotteries are state-regulated, the CCI has jurisdiction over the anti-competitive aspects of lottery business like bid-rigging in tendering process for appointment of selling agents and distributors. The CCI can order a probe into any perceived bid rigging in appointment of selling agents & distributors of lotteries.

Lotteries may be a regulated commodity and may even be res extra commercium. That would not take away the aspect of something which is anti-competition in the context of the business related to lotteries.

“We must take note of the expansive definition of ‘Service’ under Section 2(u) of the Competition Act. It means “service of any description”, which is to be made available to potential users.”

Said Court

The purchaser of a lottery ticket is a potential user and a service is being made available by the selling agents in the context of the Competition Act. Suffice for us to say the inclusive mentioning does not inhibit the larger expansive definition.

The lottery business can continue to be regulated by the Regulation Act. However, if in the tendering process there is an element of anti-competition which would require investigation by the CCI, that cannot be prevented under the pretext of the lottery business being res extra commercium (thing beyond trade/commerce), more so when the State Government decides to deal in lotteries.

2. CCI slaps penalty of Rs. 936.44 Cr. on Google for abuse of dominance in market for licensable OS for smartphones

Case Details: XYZ (Confidential) v. Alphabet Inc.
Citation: [2022] 145 taxmann.com 43 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member
• Sajan Poovayya, Jayant Mehta, Sr. Advs. Karan Chandhiok, Ms Deeksha Manchanda, Ms Raksha Aggarwal, Ms Avaantika Kakkar, Kaustav Kundu, Ms Ruchi Verma, Tarun Donadi, Ms Auraellia Wang, Thomas Bohnett, Ms Smita Ann Andrews, Ms Sonam Mathur, Ms Dinoo Muthappa, Abir Roy, Dhruv Dikshit, Mark Buse, Vivek Pandey, Advs. & Tom Thomas for the Appellant.

CCI imposes penalty of Rs. 936.44 Cr. on Google for abuse of dominance in market for licensable OS for smartphones & in market for app store for Android

Facts of the Case

The CCI found that Google had abused its dominant position in contravention of several provisions of the Competition Act, 2002 as under –

• Google was found to be in violation of the provisions of Section 4(2)(a)(i) of the Act by making access to the Play Store, for app developers, dependent on mandatory usage of the Google Play Billing System (GPBS) for paid apps and in-app purchases which constitute an imposition of an unfair condition on app developers.
• Google was found to be in violation of Section 4(2)(a)(i) and 4(2)(a)(ii) of the Act by following discriminatory practices by not using GPBS for its own applications such as YouTube. This also amounts to an imposition of discriminatory conditions and pricing on other apps that are required to use the system.
• Google was found to be in violation of Section 4(2)(b)(ii) of the Act  due to the mandatory imposition of the Google Play Billing System, which disrupts innovation incentives and limits the ability of payment processors and app developers to innovate and undertake technical development in the market for in-app payment processing services.
• The mandatory imposition of GPBS by Google, has resulted in the denial of market access for payment aggregators and app developers, in violation of Section 4(2)(c) of the Act.
• The practices followed by Google resulted in leveraging its dominance in the market for licensable mobile operating systems and app stores for Android to protect its position in the downstream markets, in violation of Section 4(2)(e) of the Act.
• Google’s use of different methodologies to integrate its own UPI app with the Play Store compared to rival UPI apps resulted in the violation of Sections 4(2)(a)(ii), 4(2)(c) and 4(2)(e) of the Act.

CCI Held

The CCI observed that the prohibitions laid down in section 4 of the Competition Act are straightforward and any abuse of dominant position in terms of the imposition of unfair conditions, denial of market access, leveraging, imposition of supplementary obligations etc. is prohibited.

The CCI held that Google, after imposing unfair conditions as well as engaging in other conducts violating Section 4 of the Act, cannot take a plea that it lacked anti-competitive intent. The dominant undertakings are expected to comply with the provisions of the Act. Thus, the plea raised by Google was devoid of any merit and the same was rejected.

Further, the CCI imposed a penalty of Rs. 936.44 crores upon Google for violating Section 4 of the Act and directed Google to deposit the penalty amount within 60 days of the receipt of this order.

Also, the CCI directed Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of Section 4 of the Act.

3. CCI orders probe against Apple for forcing ‘app developers’ to use its in-app payment solution

Case Details: Together We Fight Society v. Apple Inc.
Citation: [2022] 135 taxmann.com 194 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member 

Apple requires app developers, who wish to sell digital in-app content to their consumers, to use Apple’s in-app payment solution and thus, restricts choice available to app developers to select a payment processing system of their choice especially considering when Apple charges a commission of 30 per cent, though other payment processing solutions charge significantly lower fee for processing payments, these restrictions imposed by Apple forecloses market for app stores for iOS for potential app distributors in violation of section 4(2)(c)

Facts of the Case

In the instant case, the informant (an NGO called ‘Together We Fight Society’) 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 smartphones, tablets and processing of consumers’ payments for digital content used within iOS mobile apps (‘in-app content’).

The Informant averred that Apple imposes unreasonable and unlawful restraints on app developers from reaching users of its mobile devices (e.g., iPhone and iPad) unless they go through the ‘App Store’ which was stated to be controlled by Apple.

Further, Apple requires app developers who wish to sell digital in-app content to their consumers to use Apple’s in-app payment solution i.e. In-App Purchase (IAP) which carries a 30 per cent commission which is 10 times higher than as compared to open market rates.

The informant alleged that such restrictive practice and charge of exorbitant price amounts to abuse of dominant position under section 4 of the Act.

The Informant further asserted that Apple enjoys a dominant position in the market for non-licensable mobile OS for smart mobile devices as well as in the relevant market for app store for Apple smart mobile OS in India.

Apple’s App Store was the only approved App store for iOS devices. App developers have no other alternative except Apple’s App Store through which they could reach users of iOS. Thus, Apple was stated to have a monopoly in the iOS app distribution market.

The informant had alleged that Apple prevents iOS users from downloading app stores or apps directly from websites; pre-installs its own App Store on every iOS device it sells; disables iOS users’ ability to remove the App Store from their devices; and conditions all app developers’ access to iOS on the developers’ agreement to distribute their apps solely through the App Store and not to distribute third-party app stores.

CCI Held

The Competition Commission of India observed that in a relevant market i.e., market for app stores for iOS in India, Apple’s App Store is only means for developers to distribute their apps to consumers using Apple’s smart mobile devices running on Apple’s smart mobile operating system iOS, Apple holds a monopoly position in relevant market.

Then Apple requires app developers, who wish to sell digital in-app content to their consumers to use Apple’s in-app payment solution i.e., In-App Purchase (‘IAP’), and thus, restrict choice available to app developers to select a payment processing system of their choice especially considering when Apple charges a commission of 30 per cent however, other payment processing solutions charge significantly lower fee for processing payments; Apple also prohibits app developers to include a button/link in their apps which take user to third party payment processing solution other than Apple’s IAP, these restrictions imposed by Apple forecloses market for app stores for iOS for potential app distributors in violation of section 4(2)(c).

The Commission prima facie viewed that Apple has violated the provisions of section 4(2)(a), 4(2)(b), 4(2)(c), 4(2)(d) and 4(2)(e) of the Act, and therefore, it warrants detailed investigation. Accordingly, CCI directed the Director-General to cause an investigation to be made into the matter under the provisions of section 26(1).

4. CCI dismisses complaints of abuse of dominance and tie-in sales arrangement against Zomato

Case Details: Rohit Arora v. Zomato (P.) Ltd.
Citation: [2022] 137 taxmann.com 68 (CCI) 

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member

OP i.e. Zomato, and another online intermediary for food ordering and delivery i.e. Swiggy, were competing with each other in same segment on various parameters, prima facie Zomato did not appear to hold a dominant position and complaints of abuse of dominance and bundling/tying of food ordering services with food delivery services were to be dismissed

Facts of the Case

In the instant case in the matter of Mr Rohit Arora v. Zomato Private Limited (now Zomato Limited) [2022] 137 taxmann.com 68 (CCI), an information was filed by an Informant under Section 19(1)(a) of the Competition Act, 2002 (Act) against Zomato Private Limited (OP) alleging contravention of provisions of Sections 3(4) and 4 of the Act. The Informant is stated to be a consumer of Zomato for a long and has been ordering regularly from its platform since 2018.

The Informant alleged that Zomato abused its dominant position by raising food delivery charges and by charging unfair, discriminatory, and exorbitant delivery charges from its consumers. It was further alleged that Zomato vertically restrained restaurants from delivering food themselves and is restricting food delivery from unfavoured restaurants by not assigning delivery executives.

In order to support the complaint, the Informant mentioned three incidents:

First Incident: Zomato had canceled the order stating it could not deliver the order, as the customer was unavailable to collect the food at the mentioned address and your phone was unreachable. Since the restaurant had prepared your order and denied to refund the amount for this order

The Informant later checked the terms of service on the OP’s app and found that as per Term XIII, any cancellation will be treated as an authorization breach for which Zomato is entitled to levy liquidated damages which it may determine at its discretion. The imposition of such an arbitrary cancellation policy was alleged to be abusive conduct on the part of the OP.

Second Incident: The second incident was related to spillage of food, Zomato and replied that Zomato Valet has delivered perfect orders in the last week and he is rated 4.9 out of 5 stars. We’ll treat this mistake as an exception from his end and share feedback with him. According to the Informant, this amounted to an abuse of dominant position by Zomato.

Third Incident: This incident was related to the non-refund of money on the cancellation of order. Zomato refunded only 50% of the order amount citing that the restaurant had begun preparing the food ordered. The Informant compared the cancellation policy of Zomato with other platforms such as Swiggy, Talabat.com, Deliveroo, Food Panda, etc. to demonstrate that the cancellation policy of the former is abusive.

Zomato’s reply

In its reply, Zomato, at the outset, as regards the first incident, stated that, the Informant placed an order through Zomato, then directly contacted the delivery partner asking him to contact him on his landline number and not on his registered mobile number when delivering the order. When such instructions are communicated through Zomato, its customer service executives ensure that such instructions reach the delivery partner. But in the present circumstances, when the instructions were directly passed on to the delivery partner, it would have been unfair for Zomato to provide the Informant a full refund since the delivery partner had spent time, energy, and fuel to pick up and transport the order.

With regard to the second incident, Zomato had stated that its customer support executive asked the Informant to select the item that was spilled. However, the Informant did not proceed with the complaint and did not provide a photo of the spill which prima facie shows that the Informant was just interested in getting a quick refund, and when he realised that this will not happen, he did not proceed with the complaint and is now twisting the facts by stating that Zomato did not ask him to provide photographic evidence of the spill. As per Zomato, had it been a genuine case, the Informant should have raised the issue with the customer support team or contacted them through email, attaching photographic evidence of the spillage.

As regards the third incident, Zomato had refuted the Informant’s claim that he cancelled the order dated 30.10.2020 ‘within 30—40 seconds’. As per Zomato, the Informant had placed the order at 11.09 A.M. and had reached out for cancellation at 11.11 A.M., which was two minutes after placing the order. Even then, contrary to the Informant’s allegation, he was provided a full refund for the order, a fact which the Informant has wilfully and fraudulently failed to disclose.

CCI Held

CCI ruled that with respect to the three personal incidents of abuse alleged by the Informant, the Zomato sought to negate the same with evidence on record, which was not refuted by the Informant substantively, and thus, the Commission found no instance of abuse has been made out against the Zomato

The Commission observed that the Informant had delineated two separate relevant markets as online food ordering services provided by food aggregator apps in India and food delivery services in India, which Zomato had disputed. Based on the facts and circumstances of the case, the Commission believed that there exists no prima facie case of contravention of the provisions of the Act against the OP, and the Information filed is directed to be closed forthwith under Section 26(2) of the Act. 

5. No violation of Competition Act if Govt. dept. insists their suppliers to get accreditation from NABL only

Case Details: Dushyant v. National Accreditation Board for Testing and Calibration Laboratories (NABL)
Citation: [2022] 135 taxmann.com 349 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member

In a tender floated by OPs for supply of products/services, OPs mandated suppliers to obtain testing or accreditation services from NABL or labs accredited by NABL based on their policies/guidelines/rules of procurement/some enactments governing their functioning, there was no violation of provisions of sections 3 and 4 by OPs

Facts of the Case

In the instant case, in the matter of Dushyant v. National Accreditation Board for Testing and Calibration Laboratories (NABL) [2022] 135 taxmann.com 349 (CCI), Mr Dushyant (“Informant”) filed an application under Section 19(1)(a) of the Competition Act, 2002 (Act) alleging contravention of the provisions of Sections 3 and 4 of the Act by the National Accreditation Board for Testing and Calibration Laboratories (“NABL”) and other Department of Government/Government-affiliated bodies or Public Sector Undertakings-Opposite Parties (OPs).

The Informant alleged that NABL entered into Exclusive Supply Agreements (ESA) with the other OPs where no other accreditation service other than that of NABL was allowed. The suggested bidders/suppliers had to obtain accreditation services from NABL and its accredited laboratories only. The Informant contended that when there were other accreditation agencies existing as on date in India, it violated the provisions of section 3 (4) of the Act.

The Informant further submitted that it led to the monopolisation of power in the hands of NABL and caused an appreciable adverse effect on competition, leading to the denial of market access. The Informant contended that this violates Sections 4(2)(a) and 4(2)(c) of the Act.

CCI Held

The CCI held that the Informant failed to provide any evidence about NABL having an agreement/arrangement with OPs in relation to some exclusive arrangement in favour of NABL. Thus, the CCI, prima facie, does not find a contravention of Section 3(4) of the Act by any OPs.

As far as the question of violation of section 4 of the Act was concerned, CCI held that the Informant failed to provide any data/information to support his claim regarding the market share or dominance of each of the OPs.

The OPs seeking NABL’s accreditation (based on their policies/ guidelines/ rules of procurement/some enactments governing their functioning), there was nothing to suggest that NABL had any role in framing the same.

Further, OPs are free to stipulate standards for procurement, and the same cannot be held to be out-rightly anti-competitive. There was no hint to suggest that procurers other than OPs are also imposing similar conditions as the present OPs. Therefore the question of foreclosure of the market for other accreditation agencies does not arise.

The CCI ordered that there was no prima facie case of contravention of any of the provisions of Section 3 and/or 4 of the Act was made out against the OPs for causing an investigation into the matter. Therefore, the matter was ordered to be closed forthwith.

6. CCI imposes a monetary penalty of Rs. 1,337.76 crores on Google for anti-competitive practices

The Competition Commission of India (Commission) has imposed a penalty of Rs. 1,337.76 crores on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing cease and desist orders. The Commission also directed Google to modify its conduct within a defined timeline.

Facts of the Case

Based on its assessment, the Commission found Google to be dominant in all the below-mentioned relevant markets:

(a) Licensable OS for smart mobile devices in India;

(b) App store for Android smart mobile OS in India;

(c) General web search services in India;

(d) Non-OS specific mobile web browsers in India;

(e) Online video hosting platform in India.

Further, Google also secured a significant competitive edge over its competitors in relation to its other revenue-earning app, i.e. YouTube on Android devices. The competitors of these services could never avail of the same level of market access that Google secured and embedded for itself through a Mobile Application Distribution Agreement (MADA). Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets.

Further, the Revenue Sharing Agreements (RSAs) helped Google to secure exclusivity for its search services to the total exclusion of competitors. The combined results of these agreements guaranteed continuous access to search queries of mobile users, which helped not only in protecting the advertisement revenue but also to reap the network effects through continuous improvement of services, to the exclusion of competitors. With these agreements in place, the competitors never stood a chance to compete effectively with Google. Ultimately, these agreements resulted in foreclosing the market for them and eliminating choice for users.

CCI Observations

The Commission opined that the markets should be allowed to compete on merits, and the onus is on the dominant players, i.e. Google, that its conduct does not influence this competition on merits. By virtue of the agreements discussed above, Google ensured that users continued to use its search services on mobile devices, which facilitated uninterrupted growth of advertisement revenue for Google. Further, it also helped Google to further invest and improve its services to the exclusion of others. Thus, the underlying objective of Google in imposing various restrictions via MADA and RSAs was to protect and strengthen its dominant position in general search services.

CCI’s Decision

Accordingly, in terms of the provisions of Section 27 of the Act, the Commission imposed a monetary penalty of Rs. 1,337.76 crores and issued cease and desist orders against Google from indulging in anti-competitive practices that have been found to be in contravention of provisions of Section 4 of the Act.

One important part of the CCI order is that Licensing of Play Store (including Google

Play Services) to OEMs shall not be linked with the requirement of pre-installing Google search services, Chrome browser, YouTube, Google Maps, Gmail or any other application of Google.  The CCI wants Google to stop the mandatory pre-installation of the entire Google Mobile Suite on smartphones under its Mobile Application Distribution Agreement (MADA) that it signs with Original Equipment Manufacturers (OEMs). The CCI noted in the press release that this placement is unfair to “device manufacturers” and anti-competitive in nature. Further, it cannot restrict users from uninstalling its apps and choosing other search engine options.

Read the Full Press Release

7. Bar council of India couldn’t be said to be an enterprise, a review petition filed before Supreme Court dismissed

Case Details: Thupili Raveendra Babu v. Competition Commission of India
Citation: [2022] 142 taxmann.com 549 (SC)

Judiciary and Counsel Details

• Sanjay Kishan Kaul & M.M. Sundresh, JJ.

Supreme Court dismissed review petition filed against it ruling that Bar Council of India is a statutory body established under section 4 of Advocates Act, 1961, which is exclusive rule making authority to set standards of legal education and, thus, it could not be said to be an ‘enterprise’ within meaning of section 2(h)

Facts of the Case 

In the instant case, the petitioner was an executive engineer in the Central Public Works Department (CPWD), Ministry of Urban Development, Government of India. He planned to take voluntary retirement to pursue a legal education.

According to the petitioner, the Bar Council of India (BCI) regulates legal practice and education in India. It enjoys the dominant position in controlling legal education and practice in India.

The petitioner stated that pursuant to Clause 28 of Schedule III, Rule 11 to Part IV – Rules of Legal Education, 2008, a part of BCI Rules enacted under the Advocates Act, 1961 according to which the candidates belonging to the general category who have attained the age of more than 30 years, was barred from pursuing a legal education.

The BCI had allegedly imposed maximum age restrictions, which act as an indirect barrier for the new entrants. The impugned clause 28 had been incorporated by the BCI in contravention of Section 4 of the Competition Act, 2002 by ‘misusing its dominant position’. Further, the BCI had also indulged in a colourable exercise of power.

Therefore, the petitioner had prayed before the Commission to declare the impugned Clause 28 as illegal and void ab initio and impose the maximum penalty on the BCI for violation of Section 4 and indulging in a colourable exercise of power. Further, the petitioner also prayed for interim directions under Section 33 for suspending the impugned clause 28.

The CCI opined that there was no prima facie case under Section 4 and directed the information filed to be closed immediately under Section 26(2) of the Act. Therefore, the aggrieved petitioner preferred an appeal before the NCLAT.

The NCLAT held that the Bar Council of India is a Statutory Body and has its primordial role in performing its duties. Hence, the Bar Council of India is not an ‘enterprise’ having any economic and commercial activity.

Further, the NCLAT held that the BCI is concerned with the standards of the legal profession and equipping those who seek entry into such profession with the relevant knowledge and skills.

Supreme Court Held

The Supreme Court, by the impugned order, upheld the order passed by the NCLAT. Then, the petitioner, by the instant petition, sought a review of the impugned order.

The Supreme Court held that the Bar Council of India is a statutory body established under Section 4 of the Advocates Act. It is the exclusive rule-making authority to set standards of legal education. Thus, it couldn’t be said to be an ‘enterprise’ within the meaning of Section 2(h) of the Competition Act, 2002.

The Supreme Court further held that the impugned order didn’t suffer from any apparent error warranting its reconsideration. Accordingly, the instant review petition was to be dismissed. 

8. CCI orders investigation into allegations of abuse of dominance by Google in news aggregation services

Case Details: Digital News Publishers Association v. Alphabet Inc.
Citation: [2022] 134 taxmann.com 103 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, JJ

Google was an indispensable trading partner for news website publishers and Google had unilaterally decided not to pay digitalnewspublishers for snippets used by them in search engine, it also forced publishers to build mirror-image websites using Accelerated Mobile Pages (AMP) format with Google caching all articles and serving content directly to mobile users, such conduct of Google required a detailed assessment, and thus, DG was directed to cause an investigation into matter under provisions of section 26(1)

Facts of the Case

In the instant case in the matter of Digital News Publishers Association v. Alphabet Inc – [2022] 134 taxmann.com 103 (CCI), the informant (Digital News Publishers Association), a Section 8 Company formulated to promote, aid, help, encourage, develop, protect and secure the interest of digital news publishers filed a complaint under section 19(1)(a) of the Competition Act, 2002 against Alphabet Inc., Google LLC, Google India Private Limited, and Google Ireland Limited (collectively referred to as ‘Google’) alleging violation of Section 4 of the Act.

CCI Held

The Informant claimed that the majority of the traffic on news websites comes from online search engines (i.e. more than 50%), wherein Google is claimed to be the most dominant search engine. The informant argued that Google imposed direct/indirect unfair conditions on the members of the Informant while allowing website links of the members of the Informant on their search engine results.

The informant alleged that Google abused its dominant position to impose unfair and arbitrary conditions on the members of the Informant u/s Section 4(2)(a)(i), as the members of the Informant were not informed of or given any data pertaining to the amount of revenue earned by the Google by providing advertisements on the websites/links of the members of the Informant. Google only give a small chunk of revenue generated to the members of the Informant in an arbitrary manner. The publishers of the news only got a smaller chunk of the revenue generated.

The informant also alleged that unfair acts of Google are detrimental and prejudicial to the interests of the consumers as well as the journalism industry as it de-motivates the entire journalism industry, as they put all hard work into publishing news and get only a smaller chunk of revenue.

The Informant further alleged that Google does not produce any news of their own; however, they have steadily grown their influence in the news space by effectively using their dominance in the relevant markets.

It had been contended that Google not only had a monopolistic position in search in India, it also had a very strong position in advertising intermediation and controls the major share at each level. The informant alleged that Google abused its dominance in every way. The members of the Informant have no other option but to accept the terms, as they are, with no bargaining power whatsoever.

The informant prayed the Commission to pass an order under section 26(1) of the Act to inquire into the conduct of Google for the violation of Section-4 of the Act.

The Commission noted that Google’s market share ranged from 98% to 99% in the mobile search engine market during the period April 2019 to July 2021. Apart from market share data, the Commission had also taken note of the detailed submissions of the Informant on other factors given under Section 19(4) of the Act to assert the dominance of Google in the relevant markets.

Based on the above, the Commission, prima facie viewed that no doubt Google has the dominance in the relevant market and Google had violated the provisions of Section 4(2)(a) of the Act, which merits investigation. The Commission observed that an investigation by the DG would be able to examine the issues comprehensively by allowing all concerned to present their case. Accordingly, directed the DG to cause an investigation into the matter under the provisions of Section 26(1) of the Act.

9. HCs can’t interfere with CCI’s probe unless there is an abuse of process and it appears a mala fide investigation

Case Details: GMR Hyderabad lnternational Airport Ltd. v. Competition Commission of lndia
Citation: [2022] 144 taxmann.com 186 (Telangana)

Judiciary and Counsel Details

• K. Lakshman, J.
• S. Niranjan Reddy & Ms Rubaina S. Khatoon for the Petitioner. 
• K. Vivek Reddy, Ms Neha Pandey, D. Prakash Reddy & P. Sriram for the Respondent.

CCI order directing probe against GMR for alleged abuse of market power, on a complaint filed by informant an aircraft Maintenance, Repair and Overhaul (MRO) service provider Air Works was well reasoned, hence could not have been interfered with

Facts of the Case

In the instant case in the matter of GMR Hyderabad lnternational Airport Ltd. v. Competition Commission of lndia – [2022] 144 taxmann.com 186 (HC-Telangana), a question was raised before the High Court as to whether the Court can interfere in CCI proceedings and investigations when there appears to be an abuse of law?

High Court Held

The High Court observed that an order passed u/s 26(1) of the Competition Act, 2002, directing investigation by the Director General is an administrative order passed only to determine whether allegations made by informant u/s 19(1), about possible violations of competition law are true.

It was further observed that once information is received u/s 19(1), CCI, based on material produced by the informant has to form a prima facie opinion regarding possible competition law violations. The High Court held that while forming a prima facie opinion, CCI has to only determine if allegations along with material produced are taken to be true, will that result in breach of competition law.

The High Court held that scope of interference of High Courts under Article 226 of the Constitution of India, in an order passed directing investigation under section 26(1) is extremely limited. The CCI and authorities under Act, 2002 were well equipped to conduct the investigation and possess expertise in said field.

In view of the above, it was held that the High Courts could not interfere with such investigation unless there is an abuse of process and prima-facie it appears that the investigation was marred by mala fides.

It is only after the investigation/inquiry is completed and parties are given an opportunity of hearing that the CCI can decide whether the dispute is strictly commercial and raises no competition law concerns.

10. No abuse of dominance by Asian Paints; allegations of enforcing exclusive supply agreement couldn’t be substantiated: CCI

Case Details: JSW Paints (P.) Ltd. v. Asian Paints Ltd.
Citation: [2022] 142 taxmann.com 210 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member

Informant filed information against manufacturer of decorative and industrial paints, i.e. OP that it had acted in contravention of provisions of sections 3 and 4 by enforcing an exclusive supply agreement and restraining paint dealers to not to deal with informant’s paint, however, said allegations could not be substantiated with concrete evidence, no case of contravention of provisions of sections 3 and 4 was made out

Facts of the Case

In the instant case in the matter of JSW Paints (P.) Ltd. v. Asian Paints Ltd. – [2022] 142 taxmann.com 210 (CCI), the information was filed by JSW Paints (P.) Ltd (the “Informant) u/s 19(1)(a) against Asian Paints Limited alleging the contravention of sections 3(4) and 4 of the Competition Act, 2002.

CCI Held

JSW Paints alleged that, immediately after the launch of its decorative paints, Asian Paints targeted dealers/distributors/retailers partnering with JSW Paints. It directed them to stop dealing with JSW Paints and threatened them to stop supplies to these dealers.

Further, it also asked dealers to remove display of JSW Paints products from their retail shelves and threatened of not to allow them discretionary discounts, among others.

Further, Asian Paints was alleged to hinder the entry of JSW Paints by virtue of its dominance in the market for the manufacture and sale of decorative paints by the organised sector in India, in contravention of provisions of Section 4(2)(c) of the Act. Thus, the conduct of Asian Paints was aimed at preventing JSW Paints from establishing its presence in the said market

The CCI noted that the conduct of Asian Paints was a case of enforcing an exclusive supply agreement and refusal to deal as provided in Section 3(4) of the Act. Thus, the said conduct caused an appreciable adverse effect on competition by creating barriers to entry, driving existing competitors out of the market and foreclosure of competition by hindering the entry of JSW Paints into the market.

The CCI observed that the Asian Paints prima facie appeared to enjoy a dominant position in the relevant market for “manufacture and sale of decorative paints by the organised sector in India”.

Further, with respect to the alleged contravention of Section 3(4) of the Act, the CCI observed that the restraints imposed by Asian Paints appeared to be in the nature of an exclusive supply agreement and refusal to deal. Accordingly, the CCI directed the DG to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act.

The CCI, on the basis of DG findings, held that there has to be evidence that, on the balance of probabilities, would point towards a strong entrenched player using tactics to oust a smaller player or even a new entrant to the market (regardless of its size or inherent advantages) by either incentivizing or coercing downstream players to boycott or not deal with the new players.

“In the present case, the balance was not tilted towards JSW Paints. Asian Paints was able to demonstrate that some of its conduct or practices adopted qua the dealers were in furtherance of its terms of doing business with such dealers and not to keep JSW Paints away from the market. “

In view of the above, the allegations of enforcing an exclusive supply agreement and refusal to deal against the Asian Paints were to be dismissed.