The Case of “Amateur” Baseball Federation of India: Analysis Through Competition Lens
[By Pranav Tomar & Umang Chaturvedi] The authors are students at the Rajiv Gandhi National University of Law, Patiala. Introduction The commercialization of sports has strongly affected the landscape of sports federations in India. Now, these associations/federations act not only as regulators of domestic sports or facilitators to sportspersons but also add value to business houses. Recent trends prove that these Government-recognized federations are frequently found in conflict while fulfilling their duties due to the unparalleled power that they possess as entities. Hence, a check on such powers is of utmost importance, which can only be ensured through the law of the land. In consideration of such checks and balances, provisions of the Competition Act, 2002 (‘Act’) prove to be helpful in India. Recently, the Competition Commission of India (‘Commission’) in an information filed by the Confederation of Professional Baseball Softball Clubs (‘CPBSC’) held the Amateur Baseball Federation of India (‘ABFI’) in contravention of Section 4 of the Act (abuse of dominant position). In this piece, the authors analyse the acts of ABFI through the lens of precedents and the Indian competition law regime and will attempt to provide solutions to sports-related competition law violations. Facts of the Amateur Baseball Federation’s case CPBSC was a not-for-profit organization that worked for the development of baseball and softball privately, whereas ABFI was a National Sports Federation affiliated to the Sports Ministry that acted as the national regulator of baseball. ABFI was also affiliated with international baseball regulators and was officially entrusted with the duty of promoting the sport through various means. The matter stems from the act of CPBSC where it intended to organize an intra-club national Championship in February 2021 to provide a platform to young players. However, ABFI through its regulatory powers issued a letter dated 7th January 2021 that prohibited State affiliates from acknowledging private bodies and further threatened the interested players with disciplinary action if they participate in any unrecognized league. In fright, the registered clubs revoked their participation from the Championship which caused losses to organizers, i.e. CPBSC. Simultaneously, ABFI scheduled its flagship National Championship amidst the second wave of pandemic in late March 2021 and notified through a communication dated 1st March 2021. Eventually, the aforementioned communication turned out to be malafide considering that it was released after CPBSC finalized the dates of its private Championship and ABFI deliberately scheduled it on similar dates only to cause hindrance to CPBSC. ABFIs Championship was an event of utmost importance to all players as it gave them a chance to be considered for representing India in future. Hence, such acts caused chaos amongst the players and state bodies which forced them to choose ABFIs league only by not participating in another opportunity which was offered by CPBSC. ABFI case vis-à-vis precedents To tackle abuse of dominant position information, the foremost question the Commission faces is whether the organization is an enterprise? The commercial role of sports organizations forces them to comply with the definition of “enterprise” as provided under Section 2(h) of the Act. It was noted in Surinder Singh Barmi v. BCCI (‘Barmi’) that the definition of an enterprise is “wide enough to include any economic activity by an entity”. However, in ABFI’s case, the Commission went a step ahead and noted that even a non-commercial economic activity shall be subjected to the scrutiny of the Act. To do so, it used the “functional approach”, which has been relied upon in various Indian cases but primarily finds its mention in MOTOE v. Elliniko Dimosio. The approach suggests that every function shall be assessed separately as a federation may act as an enterprise when it is carrying one activity and not when carrying any other. In MOTOE, the Grand Chamber of the European Court of Justice stated that the economic activity having any connection with a sports-related act i.e. essential function does not restrict such entity from being scrutinized as an enterprise that in Indian parlance is defined under Section 2(h) of the Act. Further, the procedural set-up of the Act suggests that when the Commission adjudicates upon abuse of dominant position, a three-fold process is followed – Delineation of the relevant market in which enterprise exists Section 2(s) of the Act defines the “relevant market” for appropriate adjudication and determining the scope of the investigation. The relevant geographic market from Barmi to ABFI has always remained the same, in essence, India. It is the delineation of the product market that was presented through different approaches – (i) Consumer & multitude relationship approach (which states that federations have multiple functions to discharge with regards to other enterprises and consumers) in Dhanraj Pillay & Others v. M/s Hockey India (‘Pillay’); and (ii) the principle of substitutability (of sport & of services provided by one governing body) in Ministry of Youth Affairs and Sports v. Athletics Federation of India (‘AFI’). Based on the above-mentioned principles, the relevant market in ABFIs case was delineated as “market for organization of baseball leagues/events/ tournaments in India” because (i) no other sport can replace baseball; and (ii) no other regulatory body provides the necessary services. Establishing the dominance of enterprise within its relevant market The term “pyramid structure” finds utmost importance when determining the dominance of a sports organization. It refers to the organizational structure of sports entities which is modelled to fulfil governance loopholes. For instance, the Basketball Federation of India is the regulator and facilitator of basketball in India and has been recognized by another bigger regulator at the international level i.e. Fédération Internationale de Basketball. The same stands true with BCCI and ICC in the context of cricket. The pyramid structure has been noted in various cases in India like Barmi and Pillay. Although the pyramid is a monopolistic structure in itself, it ensures uniformity of sports globally. However, such structure makes these organizations the de facto authority coupled with factors like unilateral decisions, malafide bans on respective athletes, disapproval to local leagues, etc. further establishing their dominance before the
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