Competition Law

[By Tejaswini Sahoo] The author is a student of the West Bengal National University of Juridical Sciences (NUJS).   Introduction The rapid growth of digital conglomerates in the dynamic competitive market has prompted stakeholders from various sectors to mull over a comparative analysis of leading approaches. The regulatory frenzy race is multi-surfaced because of intricate business models, content moderation issues, and burgeoning sociocultural power. Further, because of the endowment of entrenched positions, they build conglomerate ecosystems around their core platform services, strengthening entry barriers and possibly leading to unfair actions. There is a global consensus that conventional competition law is inadequate to accommodate the panoply of the conundrum arising in digital platform markets. Therefore, regulating or not is no more a Shakespearean issue. As a result, the paradigm shift of a deliberative evidence-based approach Ex-post to a form of speculative approach Ex-ante is witnessed in other jurisdictions, including the West. The present article aims to be provocative in nature. It poses questions on three prominent emerging approaches; firstly, which approach will cure market failure, structural competition problem, and monopoly problems? Secondly, can tailored objective standards be implemented in a subjective, fluid digital market? Thirdly, would the Ex-ante approach involving specific market issues be proportionate towards large digital platforms? Moreover, whether or not these tailored remedies will stifle innovation in an emerging market like India. In the Indian context, regulations should be implemented after properly reframing them against the socioeconomic backdrop. Paradigm Shift Across Jurisdictions The perfect storm is brewing for digital platforms on all fronts. For instance, the Digital Markets Act by the EU imposes a series of negative and positive obligations on the enterprises designated “Gatekeepers” based on internal market power, strong intermediation position, large user base, or durable position as determined by the DMA. In the US, the Federal Trade Commission is prioritising Ex-ante measures by reintroducing a rule that restricts acquisitions for organisations and enterprises that pursue “anti-competitive mergers.” The 10th Amendment has already been incorporated into the German competition Act to bring pre-emptive measures thanks to swift action. Likewise, the UK created the “Digital Markets Unit” as a continuous agency oversight, whereas Japan and Australia are all actively working to implement an Ex-ante approach. In India, the Parliamentary Standing Committee tabled the 53rd report on “Anti-competitive Practices By Big Tech Companies.” The committee observed the distinction between the traditional physical market and Digital markets. It opined to form ‘Systemically Important Digital Intermediaries (SIDIS)’ by identifying leading players. Subsequently, India should create definitions for Ex-ante rules that govern the behaviour of systemically important digital intermediaries following the footsteps of other jurisdictions. Comparative Analysis of Three Emerging Approaches Over time, Policymakers have adopted several distinct approaches to regulating large digital platforms. Firstly, antitrust law: a set of flexible, judicially crafted behavioural standards. It does not forbid market power creation, maintenance, or enhancement by procompetitive means, such as innovation or gains in productive efficiency. It aims to treat the disease-causing harmful market impacts rather than just masking its symptoms (such as rising costs and declining quality) as a “palliative” treatment. However, the proponents of the Ex-ante approach will claim that it is too slow to control fast-pacing, multifaceted digital platforms. It does not provide prospective guidance and ends with monopolising the market or controlling unique traits of digital market needs. , Secondly, Ex-ante are positioned to handle the problems resulting from structural shortcomings in the framework of the digital marketplace. Additionally, to do so fast enough to avoid platforms securing and leveraging their places at the expense of users or by excluding possible competitors. It is determinative and can damage control in a fast- pacing market. However, the Hayekian knowledge issue regarding laws that apply uniformly to various digital platforms will likely worsen. A standard-based strategy customises instructions for a specific context, creating conflict with creative and constantly evolving digital marketplaces. The slightest deviation could result in legal action in the ever- changing digital marketplaces, discouraging innovation. When natural monopoly utilities are obliged to charge rates similar to those that would prevail under competitive conditions, the rules may be intended to force the outcome that would occur if the market were competitive. Such regulations are a palliative treatment for market power since they aim to reduce its symptoms, such as supra-competitive prices, without treating the underlying problem (the lack of competition). . Thirdly, an expert Oversight Agency is authorised to craft tailor-made codes of conduct for each platform with strategic market status. Further, it is supposed to ensure fair trading, freedom of choice, reliability and transparency. The UK recently adopted to launch “Digital Market Unit” within the nation’s antitrust agency, the Competition and Markets Authority (CMA). Compared to antitrust law, it might be quicker, more precise, and less prone to mistakes than Ex-ante regulation. However, the approach fosters broad discretion of interest group exploitation, susceptibility to political influences, and limited control over their subject matter, which poses serious issues concerning public choice and interest. Therefore, ensuring the fair constitution of the oversight agency plays a crucial part in this approach. Is a Speculative Blanket Restriction Necessary? An influential industry group representing Google, Meta, and Amazon, among other tech firms, hailed the Standing Committee Report of India as regressive, prescriptive, and absolutist. There are two types of regulation: Symmetric (applicable to all the firms) and Asymmetric (applicable to only a few enterprises compared to objective criteria). The question arises: Will shifting to speculative obligations cure market failure, structural competition, and monopoly conundrums? Further, whether the application of regulations asymmetrically will fix the inherent root issue? The answer depends on whether market failures are caused by monopoly issues or structural market failure. In case of a structural issue, symmetric regulation is necessary because it must handle the issues brought on by the market’s structure, regardless of the scale of the companies involved. On the contrary, if a monopoly issue is identified, Asymmetric regulation is necessary, and asymmetric regulation is required as the regulation has to address only the monopoly power of the

[By Nikita Parihar] The author is a student of Lovely Professional University, Punjab.   Introduction Competition Amendment Bill 2023 [‘‘CAB23’’] recently introduced in the parliament introduced the concept of penalty on the Global Turnover [‘‘GT’’] of the infringing party in India as well. It is said to be a wild card entry because it is neither introduced in Competition Amendment Bill 2022 [‘‘CAB22’’] nor was recommended by the standing committee report. The earlier penalty was given on the average turnover of the relevant market which watered down the deterrent motive of the law that is to be attained. A penalty on GT is a type of penalty or fine that can be foisted on companies for overstepping competition law. In some jurisdictions, such as the European Union [‘‘EU’’], competition law authorities have the power to impose fines on companies that engage in anticompetitive behavior, such as price-fixing or market allocation. These fines can be significant and are often based on a percentage of the company’s GT. The use of a penalty on GT is intended to make the fine significant enough to deter companies from engaging in anticompetitive behavior, while also considering the company’s size and economic power. By imposing a fine that is a percentage of the company’s GT, competition authorities aim to set the seal that the penalty has a meaningful impression on the company’s bottom line, and remits a strong signal to other companies that anti-competitive behavior will not be endured. It is worth noting that the use of a penalty on GT is not universally accepted, and there is some debate over whether it is an appropriate form of penalty. However, many competition law authorities continue to use this form of penalty, and it remains an indispensable tool for enforcing competition law and stimulating fair competition in global markets. The author argues that it can disproportionately impact companies and that the calculation of GT can be convoluted and can also take hold of India’s market by putting off global players’ entry. A potential barrier to global players Penalizing an enterprise altogether and taking its GT as leverage to keep them truncated might have detrimental effects on the Indian market as it might agitate global corporations to set foot in the Indian market. But that actually depends upon authorities to balance with the most awaiting guidelines for the same, EU also has akin laws to tackle inequitable players and it turned out to be effectual but considering India’s growing market and fluctuations it can serve as a menace to the Indian economy.. As developing nations, we need to captivate corporations to invest and operate in India to contribute to its extension. Still, imposing fines that are detrimental to their growth may affect India’s growth. There are many conglomerates’ deals across many sectors and if CAB23 is passed and they are found doing anti-competitive practices in one sector they will be fined taking turnover all across the sectors they deal in which will be a matter of concern for them as well. Though this can help the Competition Commission of India [‘‘CCI’’] bring down the cases but endangering the entry of global players and the existence of smaller companies or startups will curtail the purpose of the competition law itself. Detrimental to the existence of smaller companies When it comes to small companies, the European Commission’s competition policy recognizes that they may face different challenges compared to larger companies, such as limited financial resources or market power. Therefore, the Commission takes into account the specific circumstances of Small and Medium-Sized Enterprises [‘‘SMEs’’] when applying competition law. The Commission has adopted various measures to support SMEs in their business activities while ensuring a level playing field for competition. For example, the Commission has simplified the procedures for SMEs to apply leniency in cartel cases, and it has also provided guidance on how SMEs can participate in public procurement procedures. In addition, the Commission has established specific funding programs to support SMEs in their business activities and encourage innovation and growth, such as the Horizon 2020 program. However, it’s worth noting that competition law applies equally to all companies, regardless of their size. If a small company engages in anti-competitive behavior, it may face fines and other penalties under EU competition law. The Commission’s goal is to ensure that competition is not distorted, and consumers are not harmed, while also considering the particular challenges SMEs face. Excessive fines leading to over-deterrence The article argues that while fines imposed for anti-competitive practices should be significant, they should also be proportionate to the actual harm caused. Excessive fines can lead to increased scrutiny and compliance burdens for organizations, ultimately impacting customers who may have to pay increased prices. The spirit of competition law in India is to protect customers and market forces, but over-deterrence resulting from disproportionate fines could discourage enterprises from entering the Indian market or result in unfair treatment of customers. Therefore, the author suggests that the CCI should ensure that penalties are in proportion to the harm caused, and not more. While the calculation of GT may pose challenges for the CCI, particularly in the early stages, the author suggests that developing a process for collecting relevant information and consolidating it will be essential for the CCI to handle cases efficiently and effectively. Implementing foreign concepts in the Indian market The first time a penalty was levied on a GT by competition authorities in the EU was in the case of Intel Corporation. In 2009, the European Commission fined Intel a record 1.06 billion euros for abusing its dominant market position by offering rebates to computer manufacturers on the condition that they purchased all, or almost all, of their x86 CPUs from Intel. The Commission found that these rebates were part of a strategy by Intel to exclude its main rival, Advanced Micro Devices (‘‘AMD’’), from the market for x86 CPUs. The Commission also found that Intel made direct payments to a major computer retailer, Media-Saturn, to stock

[By Aneesh Raj] The author is a student of National Law University and Judicial Academy, Assam.   “Necessity knows no law.” – Aesop INTRODUCTION The doctrine of necessity and the Competition Commission of India’s (CCI) combination regime are two important concepts in the realm of competition law in India. The doctrine of necessity refers to situations where a law may be relaxed or suspended in cases of emergency or other extreme circumstances. The CCI’s combination regime, on the other hand, pertains to the assessment of mergers and acquisitions that may have an impact on competition in India. A newspaper article says that the CCI could use the “doctrine of necessity” to look into merger and acquisition deals. The current situation is that there is a lack of the required quorum, which means that many deals are awaiting CCI approval. So, a significant question arises here: in the existing scenario, can CCI invoke the doctrine of necessity to clear its regulatory logjam? In this article, we will explore these two concepts and their relationship in the context of Indian competition law and also find the answer to the above question. THE DOCTRINE OF NECESSITY The doctrine of necessity is a legal principle that allows for the relaxation or suspension of laws in cases of emergency or other extreme circumstances. The doctrine is based on the idea that laws are created to serve the public good, and that in certain circumstances, strict adherence to the law may be detrimental to the public interest. The doctrine of necessity is not a blanket license to ignore the law, but rather a recognition that in certain situations, strict adherence to the law may not be practical or desirable. The Supreme Court has established that the doctrine of necessity should not be invoked on a regular basis for minor matters because it may result in the absence of the rule of law, if given the choice between allowing a biased person to act on a matter or stopping the matter itself, the former will be preferred over the latter, even if the latter may be afflicted by that biased person’s or authority’s bias; however, the decision of that biased person will be upheld. ORIGIN OF THE PRINCIPLE OF DOCTRINE OF NECESSITY Necessity is a legal principle that can be used to justify an individual’s actions in an emergency situation that they did not create. This means that if a person is faced with a situation that requires immediate action to prevent harm or danger to themselves or others, they may be allowed to take actions that would normally be considered unlawful or illegal. In 1954, Chief Judge Muhammad Munir of Pakistan was faced with a situation where the Governor General, Ghulam Moulam, had exercised emergency powers that went beyond the limits of the constitution. Munir recognized the urgency of the situation and made the ground-breaking decision to sanction the Governor General’s actions, coining the term “doctrine of necessity” for the first time. This doctrine essentially meant that in extreme circumstances, such as an emergency or crisis, the law could be temporarily suspended or modified to ensure the safety and well-being of the people. To support his decision, Chief Judge Munir referred to the ancient legal maxim of Bracton, who stated that “That which is otherwise not lawful is made lawful by necessity.” Munir’s decision was a landmark one that established the concept of the doctrine of necessity in law. It recognized the need for flexibility and pragmatism in times of crisis, while also emphasizing that such extraordinary measures should only be taken as a last resort and with the goal of preserving the rule of law and protecting individual rights. APPLICATION OF PRINCIPLE IN INDIA The doctrine of necessity, which allows for the justification of actions taken in emergency situations, was first used in India in the significant case of Gullapalli Nageswara Rao v. APSRTC[1] in 1958. This decision paved the way for the further development of the doctrine, with subsequent cases providing new interpretations, applications, and invocations of the principle. One such case was the landmark decision of Election Commission of India v. Dr. Subramanian Swamy, which is credited with transforming the necessity doctrine into the absolute necessity doctrine. However, some legal experts have argued that over-reliance on this principle could lead to the erosion of the rule of law. Consequently, the Supreme Court has emphasized that the doctrine of necessity should only be used in the most extreme and urgent circumstances. In other words, while the necessity doctrine provides a means of justifying actions taken in emergencies, it should not be used as a loophole to circumvent the law or justify questionable decisions. Instead, the doctrine should be invoked sparingly, and only when there is no other alternative to address a situation that threatens public safety or welfare. Even though this is unprecedented for the CCI, Indian regulators have had trouble in the past because of late appointments. Take into account the central government’s four-year difficulty in locating a qualified “technical member” for the patent bench of the Intellectual Property Appellate Board (IPAB), which hears appeals relating to patents. Similarly, after technical member CKG Nair retired in March 2021 and his replacement was appointed almost a year later, India’s highly regarded securities market regulator SEBI’s appeal tribunal, the Securities Appellate Tribunal (SAT), went nearly a year without a technical member. Both of these tribunals’ inability to make critical decisions was hampered by the delay in the appointment of crucial members, which had serious economic and regulatory repercussions. But when important appointments to statutory bodies and tribunals were not made on time, like in these two cases, the courts stepped in to keep the justice system from getting stuck. The Delhi High Court reinstated and functionalized the IPAB’s patent bench in Mylan Laboratories Limited v. Union of India[2] (2019), noting that the Constitution required that all citizens have the right to access justice, which would be compromised if tribunals were unable to fulfil their

[By Shourya Mitra and Ishaan Saraswat] The authors are students of Jindal Global Law School.   Introduction  Upon perusing the National Company Law Appellate Tribunal’s (NCLAT) approach to competition appeals, it appears that there is a trend of requiring a 10% deposit to the NCLAT as a prerequisite for hearing penalties resulting from an order of the CCI. However, questions arise regarding the imposition and impact of this mandate. In the case of Make My Trip (“MMT-GO“), the NCLAT sought a 10% deposit of the penalty as a precondition for hearing the appeal, but no stay was granted by the NCLAT regarding the remaining fine. The Delhi High Court had to clarify that no recovery could be initiated on the remaining 90% penalty amount after MMT-GO deposited 10% of the penalty amount to the NCLAT. However, in the case of Google, the NCLAT did not stay the order or elaborate further on the penalty despite seeking a 10% deposit. This piece analyzes the validity of such a condition and discusses inconsistencies in the imposition of the 10% penalty by the NCLAT in the aforesaid cases involving MMT-GO and Google. The Saga of an Appeal Section 53B of the Competition Act, 2002 (“the Act”) provides for the right to appeal against the decision of the CCI before the NCLAT. It is a settled position in law that the right to appeal is created by the statute, which means that the right to appeal can only be limited or restricted by the provisions of the statute that creates it. In other words, the right to appeal is not an absolute right, and it can be subject to certain conditions or restrictions. Under the Act, the aggrieved party must file the appeal within sixty days of the decision being appealed against. Apart from this, the Act does not impose any other requirements or limitations on the aggrieved party. We can trace the inception of the 10% of penalty amount to the case of Ultratech Cement Ltd. v. Competition Commission of India, wherein an ancillary question before the Supreme Court of India  was whether the NCLAT  can direct the aggrieved party to deposit ten percent of the penalty imposed as a condition precedent to hearing the appeal. The Supreme Court opined that decisions or penalties involving the payment of money are seldom overturned since the affected party can usually be compensated if the decision is later found to be flawed. Therefore, according to the Apex Court, if the Tribunal decides to require the appellants to pay ten percent of the penalty owed, it would be appropriate, even if it’s only an interim measure. Rather, it would be an equitable way to handle the matter. Additionally, as per the Supreme Court in Himmatlal Agrawal v. Competition Commission of India (“Himmatlal”), the NCLAT is a legal body created by a statute, and its actions are limited by the provisions of the law. The Act does not state that the Tribunal has the power to require an appellant to deposit a specific amount before hearing their appeal. Rather, the condition to deposit ten percent of the penalty was only imposed in relation to the stay of the penalty order issued by the CCI. Therefore, in the event that a deposit is not made, the Tribunal has the authority to lift the stay on the CCI’s decision and continue with the appeal, rather than dismissing the appeal itself. In this regard, the NCLAT has the authority to mandate that a portion of the penalty be deposited as security to stay the decision of the CCI. A Fork in the Road Having discussed the jurisprudence of the 10% penalty, it is clear that the imposition of the 10% penalty as a precondition to hearing the appeal cannot be sustained as a mandate and that the lack of an explicit stay on the penalty would go against the settled position of law. However, such an inconsistent application of law will now be shown through the contrasting orders of MMT-GO and Google. The CCI on October 19, 2022, imposed penalties on MMT-GO for violating the provisions of the act, as it was abusing its dominant position. The Commission also found that MMT-GO had contravened the provisions of Section 3(4)(d) read with Section 3(1) as MMT-Go had entered into Vertical anti-competitive agreements with the service providers. On appeal to the NCLAT, the Tribunal directed MMT-GO to deposit 10% of the fee as a precondition to hearing the appeal. However, this was challenged before the Delhi High Court as the NCLAT did not impose any stay on the recovery of the remaining penalty.. The Court noted that the pre-deposit of the 10% could not be merely for the admission of the appeal. The Court felt the need to clarify the stay on the order and consequently, it confirmed that no recovery could be initiated with respect to the 90% remaining penalty amount. The outlier in a similar time period as the case of MMT, is the case of Google. Therein, the CCI had imposed penalties on Google for contravening the provisions of the Act. One of them pertained to the abuse of dominance via mandatory installation of apps (Competition Appeal (AT) No. 1 of 2023) while the other was for imposition of payment methods on the developers (Competition Appeal No.4 of 2023). Across the two orders, NCLAT sought the deposition of 10% fine. However, the NCLAT did not stay the order in either of the cases. In Competition Appeal (AT) No. 01 of 2023, NCLAT stated that there was no requirement for an interim stay with respect to the order of the CCI. It did not elaborate on the penalty nor any consequent stay. The tribunal simply held that there was no need for passing any interim order. The question that the authors are proposing is whether there could be any forceful deposition of the 10% penalty as a precondition to hearing the appeal and without any stay on recovery of the

[By Aneesh Raj & Chirantan Kashyap ] The authors are students of  National Law University and Judicial Academy, Assam.   Introduction The world’s biggest search engine has received a great shock from the country’s top court. The Supreme Court of India has rejected Google’s petition challenging the NCLAT ruling dated January 4, 2023. The Competition Commission of India (hereafter CCI) fined Google a large sum for abuse of dominance. Google sought remedy from the NCLAT initially, but once they refused, it turned to the Supreme Court of India for relief; however, this court also refused to entertain its petition. Aggrieved by the decision of the court, Google has agreed to comply with the order of CCI and to deposit the 10% penalty amount. The CCI has levied a fine of over ₹ 1337 crore on Google for abuse of its dominant position in India’s smartphone operating system market. Google, in its appeal, has termed the decision of CCI as “patently erroneous” and ignoring “the reality of competition in India, Google’s procompetitive business model, and the benefits created for all stakeholders.” The CCI order has been described as “fraught with substantive, analytical, and procedural errors, including inter alia ignoring exculpatory evidence and statements from Indian OEMs and developers.” Google has also accused the CCI’s investigating arm, namely the Director General’s Office, of mindlessly copying and pasting the order from the foreign authorities. The aim of this article is to analyse the order and also explain what it means for the general population. Facts of the case: The controversy arose following the disclosure of information by Mr. Umar Javeed, Ms. Sukarma Thapar, and Mr. Aaqib Javeed under Section 19(1)(a) of the Competition Act, 2002 (hereinafter the “Act”), alleging that Google LLC and Google India Private Limited (collectively, “Opposite Parties”/”Google”) violated Section-4 of the Act. It is believed that these informants are Android smartphone users. They had said in their submission that Android is an open-source mobile operating system that anyone may create and use freely. The Android Open-Source Project (AOSP) is the source code for Android that is subject to a basic licence. An interesting point that is stated by the informants is that the smartphones and tablets in the Indian market are being run on the Android operating system, which itself is being developed by Google. Google also offers various applications and services in the form of Google Mobile Services (GMS). Informants have described GMS as a suite of Google services that can be used to enhance a device’s performance. According to the experts, GMS includes a variety of Google services that can only be accessed through GMS and not downloaded independently by device manufacturers. These services include Google Maps, Gmail, and YouTube. Android device manufacturers must enter into certain agreements with Google before these apps and services can be installed. The informants further stated that end users would not be able to directly use these services. According to the informant, Google has been engaging in a number of anticompetitive practices, both in the core market and in peripheral areas, in order to further solidify their dominant position as the preeminent provider of online general web search services and online video hosting platforms (through YouTube). The informants made the following allegations against Google in their claims: Google requires that manufacturers of smartphones and tablets only pre-install Google’s apps or services if they want to get any part of GMS in smartphones made, sold, exported, or marketed in India. It was said that this action made it harder for rival mobile apps or services to develop or get into the market, therefore violating Sections 4 read with section 32 of the Act. Google combines or bundles various Google applications and services, such as Google Chrome, YouTube, Google Search, etc., with additional Google applications, services, and/or application programming interfaces. This conduct made it harder for people to get smart mobile devices that used different, possibly better versions of the Android operating system. Google doesn’t let smartphone and tablet makers in India make and sell “Android forks,” which are different versions of Android for other devices. This regulation made it harder for people to get access to new, smart mobile devices that might run on better versions of the Android operating system. Based on the information received, the commission forms a prima facie opinion that there is a contravention of Section 4 of the Act. So, using its power under Section 26(1) of the Act, it directed the investigating arm, which is the office of the Director General (DG), to do an investigation. Based on its investigation, the DG submitted a report addressing certain issues highlighted by Google. Investigation by the DG:  An investigation was laid out by the office of the director general in order to gather material. The office of director general contacted Google and other concerned parties. Other parties include mobile phone makers (both Indian and foreign brands), who install Android OS and Google apps and services on their phones; third parties active in the Indian market for Android OS app stores, an online general web search service, and a web browser; key players in the online video hosting platform; key Indian app developers, etc. Based on the said investigation, five relevant markets have been identified as being important to the resolution of the challenges at hand. These are the markets in India for licensable operating systems for smart mobile devices such as smartphones and tablets, the market for an app store for Android smart mobile OS, the market for general web search services, the market for non-OS-specific web browsers, and the market for an online video hosting platform (OVHP). As previously indicated, the DG has determined that Google dominates the aforementioned key markets. While compiling the investigation report, the DG also took into account the other apps and services that are considered core apps under Mobile Application Distribution Agreement (MADA). After examining the conduct of Google, the office of the director general reaches the conclusion that preinstallation of the whole GMS suite

[By Aditya Kashyap & Arnika Dwivedi] The authors are students of Symbiosis Law School, Pune.   Introduction The Delhi HC recently pronounced a judgement in the contentious case of MakeMyTrip-GoIbibo. The 10% deposit imposed on the appellants by the NCLAT for the admission of the appeal, was upheld by the High Court with the caveat that no further request is made in respect of the remaining 90% of the penalty amount. The story starts in 2018 with a commercial agreement between MakeMyTrip-GoIbibo and OYO, which acted as a vertical agreement, which caused the delisting of two major competitors of the latter i.e., Treebo and Fab Hotels from the former’s website. This resulted in FHRAI filing an information report with the CCI, alleging anti-competitive trade practices along with the contravention of Section 3 and Section 4 of the competition Act . Along with the aforementioned commercial agreement, they also complained against the Price Parity Clause in MMT-Go agreement with hotels, listed on its website. The price parity clause prohibited hotels from offering better terms or prices on other Online Travel Agent (OTA) website or even the hotel’s own website, than what was being offered at MMT-Go’s platform. There are certain questions which need to be addressed before the merits of allegations could be determined, Firstly, whether the Opposing parties held a dominant position in the market. Secondly, whether there was an abuse of the dominant position. Thirdly, whether the agreement between the opposing parties was in nature of refusal to deal. Dominant Position in the Relevant Market  MMT-Go are mainly involved in providing Search, Compare and Booking (SCB) services for end users, the CCI observed that MMT-Go also offered services to hotels that included inventory listing, tracking potential customers, and sales. The submissions made by MMT-Go to define markets based on hotels’ accessibility to end consumers were turned down by the CCI due to the fact that different services are provided to different types of customers i.e. the hotels and the end customers. The CCI found that end users most valued the seamless integration of SCB functions on Online Travel Agents (OTA) platforms. The CCI also found that OTAs helped hotels increase demand by improving visibility and discoverability, even when rooms were booked through other channels. This was true even without OTAs. This difference led the CCI to distinguish online and offline distribution. The CCI said OTAs had their own relevant market within online distribution, further sub-segmenting it. The CCI accepted the DG’s definition for MMT-Go as “-market for online intermediation services for booking of hotels in India”. The CCI agreed with the DG that MMT-Go had a market monopoly. The CCI considered that MMT-Go had no real competition and that hotels relied on it to stay afloat and expand. CCI also considered the fact that MMT-Go was not subject to any real competitive restraints. Abuse of Dominant Position  The CCI found that exclusivity requirements, and the price and room parity requirements hampered OTA competition by limiting the competitive tools available to other OTAs. Additionally, the CCI found that these requirements had a negative impact on the sale of rooms through other platforms/channels, highlighted the reliance of hotels on MMT-Go, and may have allowed MMT-Go to negatively impact prices. As a direct consequence of this, the CCI arrived at the conclusion that MMT-Go engaged in abusive practices due to its dominant position. The Competition Commission of India (CCI) did not accept MMT-Go’s defense that enforcing parity terms was a common practice in the industry. The findings of the DG regarding predatory pricing by MMT-Go were disregarded by the CCI as a result of the DG’s failure to correctly apply the costs that were pertinent to determining the average variable cost. The CCI concurred with the DG’s conclusions regarding the misleading information that was presented on the MMT-Go platform, which prevented hotels from accessing the market. Refusal to Deal  The CCI found that MMT-Go and OYO’s agreement to remove Treebo and Fab Hotels amounted to refusal to deal. The CCI also noted that the arrangement was a win-win between two vertically related entities to eliminate competitors in their respective markets. The CCI considered how the delisting singly benefited OYO. The CCI said the agreement limited consumer choices and made entering new markets harder. The CCI ultimately arrived at the conclusion that the exclusionary and mutually beneficial agreement between MMT-Go and OYO constituted a refusal to deal in violation of Section 3(4)(d) of the Act. CCI found that the agreement was anti-competitive and had an appreciable adverse effect on competition within India. The Competition Commission of India found that the opposite parties violated Section 4(2)(a)(i) as the price parity clause prevented hotels from offering better prices or terms on other platforms or their own websites. The commercial agreement between the parties denied market access and constituted refusal to deal, violating Section 3(4)(d), 4(2)(c), and 3(1). Following this, a penalty of 5% of total average turnover was imposed on MMT-Go and OYO. Relevant Turnover The penalty imposed was another contentious issue in the case, the penalty was imposed on the total turnover of MMT-Go and, not merely the hotel segment. This can be seen as being inconsistent with the concept of “relevant turnover” as developed by the Apex Court in Excel Crop Care Limited v. Competition Commission of India, the court stated that the penalty is to be imposed on the turnover which is the “turnover in respect of the quantum of supplies made qua the product for which cartel was formed and supplies made.” So this would support the position that the penalty should only be imposed on the hotel segment of the business and not the total turnover, this is based on the doctrines of proportionality and the doctrine of purposive interpretation. The doctrine of proportionality developed by the Indian Judiciary in Arvind Mohan Sinha v. Amulya Kumar Biswas states that the penalty imposed on the person should not be unequal to the significance of the violating act committed. In Bhagat Ram v. State of Himachal Pradesh the court

[By Sanidhya Bajpai] Dr. Ram Manohar Lohiya National Law University, Lucknow. Introduction In a globalized world where big capitalists are fighting tooth and nail to dominate the market, it becomes essential to curb their anti-competitive practices. In this blog, the author demonstrates how certain aspects of Predatory Pricing are restrictive and how they are not fruitful in prohibiting anti-competitive practices. The strategic lowering of prices by a firm to oust competitors is known as Predatory Pricing. The intention behind predatory pricing is to eliminate/oust the competitors and create a monopoly in the market. Not all discounts and sales are seen as predatory pricing. According to section 4(2)(a)(ii) of the Competition Act, 2002 (“Act”), the enterprise needs to hold a dominant position in the market to be charged with Predation. It is assessed by factors like (i) prices set by the firm being below the cost price, (ii) the sole purpose behind the predatory pricing being to eliminate the competition, (iii) competitors facing threats from such pricing, (iv) and, the firm aiming to regain the losses after creating the monopoly by jacking up the prices. CCI’s ambiguous approach to dominant player and predatory Pricing The Competition Commission of India (“CCI”) in numerous judgments has denied the allegations of Predatory Pricing on the basis of the firm being a new entrant in an established market and not being a dominant player or on the basis of the necessity of deep discounting in the market for network effect. However, this approach of the CCI towards Predatory pricing needs to be streamlined as a new entrant with hefty capital and funding from big capitalists can disrupt the whole market. The prerequisite of being a dominant enterprise in the relevant market to be charged with predation is restrictive and the country needs more holistic criteria in the interest of market and competition. The Act defines the dominant position in Section 4 to be a position of strength that a firm enjoys in the relevant market which enables it to operate independently of the competition or take steps that affect its competitors, consumers, and market in its favour. The CCI explained in the Mcx Stock Exchange Ltd. & Ors. V. NSE NSE case that evaluation of the strength of an enterprise is not to be seen solely on the basis of the market share but rather on the basis of stipulated factors such as size and importance of competitors, the economic power of the enterprise, entry barriers, etc. as mentioned in Section 19 (4) of the Act. The CCI in the instant case further  enumerated that the indicator of the dominant position has not to be pegged down to a percentage but is to be construed in conjunction with other factors. This delineates that the Act and commission aimed to give a holistic and encompassing approach to the definition of the dominant position. However, the fact remains that the commission in allegations related to predatory pricing by an enterprise has restricted itself to a narrower approach of dominant player and for these reasons it would be safe to alter the provisions in order to encompass the firms with substantive market power who have the power to oust the competitors by predatory pricing and other anti-competitive practices. Market domination should not be a necessary criteria The commission in various instances has denied the allegations of predatory pricing on the basis of the narrower approach to the dominant player term, like in Bharti Airtel Limited v. Reliance Industries Limited, the CCI held that simply providing free services cannot be seen as predatory pricing unless it was done by a dominant enterprise along with other anti-competitive practices to eliminate the competitors. The commission emphasized that the telecom market already had established enterprises and Jio’s practices were not anti-competitive as it was a new entrant. It is evident from Jio’s growth that a firm backed up by big capitalists can disrupt the market even without being the dominant player. The market share of Jio stands at 36% and it is the market leader in the current times, which is a quintessential example of flawed predation assessment. Shopee was alleged to be undercutting prices to loss-making levels in order to monopolize the market. It was alleged to be at the predation stage with deep pockets and a threat to Indian small businesses, however, CCI held in Vaibhav Mishra v. Sppin India, that Shopee is a new entrant in the established market and hence there was no predatory pricing. In FHRAI & Anr. v. MMT & Ors., the CCI while imposing a penalty on MMT, OYO, and Go-Ibibo rejected DG’s finding on predatory pricing stating that nuanced assessment is required in such platform market cases, as the success of such platforms depends heavily upon network effect. In the Shopee case, the CCI held that its deep discounting is not predatory as it is not a dominant player and thus, it is not anti-competitive. However, in close competitive markets like e-commerce, there is hardly any scope of being the dominant player. In such cases, the authorities should focus on the extent of harm such Predatory Pricing can cause to the market and not whether the firm is dominant or not. CCI mentioned in the MMT-Go judgment that a nuanced assessment is required of predatory pricing in such platform market cases, the same way it is difficult to adjudge a clear dominant firm in a market and all other aspects apart from market share need to be taken into consideration. How predation adversely affects the market? Predation adversely affects the market as a whole, after one firm monopolizes a market, the output decreases, and the prices rally up, which in turn negatively affects the consumers. Moreover, if one firm has control over a market the quality of the service or product also comes at its discretion, an example of this can be WhatsApp, it has a monopoly in the market as everyone uses it as a default messenger and because of that it

[By Rahul Taneja] The author is a student of Hidayatullah National Law University. Introduction ‘Parent company liability’ refers to the liability of the parent or the holding company for illegal acts of its subsidiary. In the context of the Indian competition law, such illegal acts can be the act of an anti-competitive agreement, abuse of dominance or the formation of a cartel. However, when examining jurisdictions with advanced antitrust laws, it is observed that this issue has been a source of contention for both researchers and industry professionals. The author’s goal is to assess the jurisprudence in India, contrast it with established precedents in other jurisdictions, and offer a path forward from this inevitable dilemma that the regulating body must confront itself with. The doctrine of parent company liability in India is still at a nascent stage and there is a dearth of case laws surrounding this jurisprudence. The developing jurisprudence in India Owing to its nascency, the Competition Commission of India (“CCI”) has faced comparatively lesser cases involving the claims of parent company liability under the Competition Act of 2002. The definition of an enterprise under the Competition Act, 2002 under Section 2(h) read with the proviso clause to section 27 gives the prima facie impression that the statute has empowered the tribunal to embark on a fact-based finding to impute liability upon the parent company in case of its contribution to an anti-competitive agreement or an abuse of dominance proceeding. It is notable that the CCI is yet to come up with a straitjacket formula for assessing the liability of the parent company, there is also a dearth of cases surrounding this particular jurisprudence. However, it is not appropriate to say that this question has no relevance to contemporary competition jurisprudence. Recently, in the Re: Updated Terms of Service and Privacy Policy for WhatsApp Users (“WhatsApp Privacy Policy case”), Facebook (parent entity) was attached as an appropriate party to the antitrust proceeding initiated against WhatsApp based on its 2021 Privacy Policy in the prima facie order under Section 26(1) of the Competition Act. The CCI commented that since Facebook was a direct beneficiary of the policy, it is a proper party to the proceedings along with WhatsApp. This stand taken by the tribunal comes with a lot of accompanying disastrous consequences, fixation of liability only on this sole ground would lead to every company under the sun being held accountable for the subsidiary’s actions. This stand is all the more problematic in cases where the subsidiary’s economic activities are independent of interference from the parent company Apart from the WhatsApp case, the question of parent company liability has come up before in the case of Kapoor Glass v. Schott Glass India Private Limited. In this case, the Director General (“DG”) recommended that the fine for anti-competitive discounts offered by the subsidiary must also lie upon the holding company, the CCI refused to pass any order to this effect and limited the liability to the contravening subsidiary without delving on to this point in detail. The European Experience In the European Union, competition law is governed by the provisions of the Treaty of the European Union (“TFEU”). As per Article 101 of the aforementioned treaty, liability for infringements falls upon ‘undertakings’, which is a startling contrast from other jurisdictions wherein liability is imposed upon legal entities. The concept of an undertaking is distinct from the concept of a legal entity. The former focuses more on the economic functions whereas, the latter focuses more on the legal or corporate status. This means that multiple legal entities can form part of the same economic undertaking.  This is also known as the ‘single economic entity doctrine’, it entails that multiple entities form part of the same undertaking wherein a parent can be held liable for the infringing actions of the subsidiary and according to recent decisions of the court, even vice versa. The landmark decision where liability was imputed upon the parent company is the case of Akzo Nobel NV v Commission, wherein, the ECJ affixed joint and several liability upon Akzo Nobel NV for the illegal price-fixing agreements of its subsidiary. In this case, the court read the concept of a single economic entity viś-a-viś what is now known as the ‘doctrine of decisive influence’ and reasoned that the parent and subsidiary form part of the same economic undertaking wherein the former exercises considerable influence over the latter’s decisions and thus the onus of liability can be affixed upon the holding company without proving the direct liability of the same. The doctrine of decisive influence works on a rebuttable presumption that the two entities forming part of a single undertaking are liable and it is upon the entities to adduce any additional economic or legal evidence to prove the contrary. The doctrine of decisive influence, first articulated in the Akzo Nobel Case, has since been applied in numerous subsequent cases in the EU as well as in other jurisdictions such as Singapore. The European Court of Justice’s (ECJ) strict reading of the presumption has resulted in the culpability of the parent firm in the majority of cases, despite the corporations presenting extensive evidence to avoid liability. In the Arkema case of ECJ, the parent company argued that it is a purely financial holding that does not intervene in the subsidiary’s commercial policies; similarly, in the Legris Industries case, an argument was advanced that the subsidiary company was only a small part of the conglomerate and that Legris had no say in its commercial policies. The ECJ flatly rejected the arguments in both cases. This archaic practice of the ECJ has made it seem like an almost quasi-irrebuttable presumption. US Jurisprudence As opposed to the EU wherein parent company liability is the norm, the general rule in the United States is that the parent company will not be held liable for the actions of the subsidiary, this difference is all the more surprising because of the normally converging nature of the

[By Swetha Somu] The author is a student of Gujarat National Law University. In 2015, a social worker filed a complaint to the Competition Commission of India [CCI] against Max Super Specialty Hospital and its disposable syringe supplier, Becton Dickinson India, an MNC. The complainant alleged that the in-house pharmacy of Max Hospital charges an excessive amount of Rs.19.50 (the printed MRP) for Becton Dickinson’s disposable syringe bought by its patient. This allegation was made because the same brand of disposable syringe had a cheaper MRP of Rs.11.50 when bought outside from a local pharmacy. On the basis of this 2015 complaint, the CCI in April 2022 sent a notice to Max Healthcare, Apollo Hospitals, and Fortis Healthcare for the furnishing of details on its suppliers of pharmaceutical products, its method of determining prices when selling in its in-house pharmacies, and other relevant details. The matter is slowly shaping towards an issue of excessive pricing. Now, this article aims to explore the grey area of excessive pricing predominantly in relation to the Indian pharmaceutical sector. It analyses excessive pricing in other international jurisprudence before suggesting how to mould and incorporate the same into the Indian landscape efficiently. How ‘excessive pricing’ is dealt with in other countries Firstly, excessive pricing can be defined as an antitrust violation in which a dominant firm charges an excessive price relative to an appropriate competitive benchmark in an unfair manner. It does not necessarily mean that there’s a threat to fair competition but rather an abuse of one’s dominant position for one’s own advantage. European Union [EU] The first EU case which took a full-fledged attempt to look into the aspect of excessive pricing was the prominent United Brands case (1978). The European Court of Justice [ECJ] laid down a standard two-fold test under erstwhile Article 82 of the Treaty of Functioning of European Union [TFEU] (now, Article 102 of TFEU) that states that a price shall be deemed excessive if (i) the difference between the dominant entity’s cost of production and the actual price charged by it must be excessive (cost-plus assessment test) and, (ii) the price in comparison to competitor’s price or market price is unfair or by itself unfair. Before the United Brands decision, the European Court of Justice [ECJ] in General Motors Continental NV v. Commission of the European Communities (1975) held that a price is to be termed excessive against the economic value of the provided service. The ECJ referred to and upheld the merits of this economic-value test in its British Leyland (1985) case. However, the European Commission in Scandlines Sverige AB v. Port of Helsingborg (2004) stated that this economic-value test of cost and price comparison is to be used only as a preliminary step in the determination process as it is inconclusive on its own in deeming an action violative. The Commission went on to say that the price could be compared with either (i) the price charged by that dominant undertaking for the same good/service in other relevant markets (cost-plus assessment test), or (ii) the prices charged by businesses providing similar goods/services in various relevant markets. Post the Scandlines decision, the topic on ‘excessive pricing’ was brought up again by the EC in the Aspen Pharma (2021) case. The EC concluded that Aspen’s prices for cancer-related products were unquestionably excessive in this particular circumstance as it routinely generated sizable profits. Aspen was easily able to charge these amounts since the market did not offer any substitutes for these specific cancer treatments. As a result, the national governments of the member states were unable to switch the products and eventually gave in to pressure to provide the necessary medications at whatever cost Aspen demanded. The court held that the two prongs of the test are not necessarily to be applied cumulatively but rather as an alternative. In the EU, the authorities don’t intervene in price wars unnecessarily and only to compelling needs. The Aspen case, which took four years to conclude, failed to use this opportunity to lay down general guidelines comprising accurate parameters and acceptable pricing behavior which could have allowed for a uniform application across all jurisdictions. Still, the Commission failed to seize the opportunity. United Kingdom The UK’s Competition Markets Authority [CMA] in Napp Pharmaceuticals case, stated that Napp’s prices and profit margins were much greater than those of its rivals, hence coming to the conclusion that it was charging unreasonable prices. Although the verdict made significant points about misuse of a dominating position and exorbitant pricing, it can be criticized because Napp’s rivals could profit from it and force Napp out of its dominant position. Moreover, there are a handful of notable, recent national cases as well. In particular, in Pfizer/Flynn Pharma (2020) case, both Pfizer and Flynn Pharma were fined by the CMA for charging exorbitant prices after applying the first part of the two-fold test. This was done by simply observing that sales return was above the determined threshold rather than comparing it against a benchmark. The decision was subsequently annulled by the Competition Appellate Tribunal for the incomplete application of the two-fold test laid down in United Brands case. However, the UK Court of Appeal found that the CMA was correct as it cannot be forced to go beyond the first prong (cost-plus assessment) to determine price excessiveness. Recently, in Auden Mckenzie/Actavis UK (2021) case, the CMA found that the prices charged were excessive and unfair under Chapter II prohibition in the Competition Act 1998 (the equivalent of Article 102 of TFEU). Other recent cases include the Essential Pharma case and the Advanz Pharma (2021) case. Interestingly, the CMA has applied the United Brands two-fold test with no strict adherence to the same. Unlike the EU, the UK authorities do not look at the two parts of the test as solid alternatives to each other. The authority is bound to accept other evidence submitted by the alleged company even if it is only under one prong of the test,