INTRODUCTION
India's economy can be considered equivalent to heartbeats; it's been characterized by steady ebbs and flows. With the launch of Reliance Jio (which disrupted the Indian telecom market), and various initiatives taken by the government (such as 'Digital India Campaign' and 'BharatNet', to bridge the digital divide and involve rural areas in its digital inclusion efforts), digital resources are now available to even remote households in India. Similarly, the Competition Commission of India ("CCI"), while having completed a decade and half of governance, has stepped out of its nascency and has proved its prowess and agility by adapting to the challenges posed by the 'Information Age' by taking decisions involving complex issues in emerging sectors such as digital markets. The buzz word Big Tech and terms such as deal values thresholds have become a part of the daily speak of competition regulators and lawyers, alike.
At this critical juncture, INDUSLAW hereby presents its inaugural edition of 'The Pulse', a quarterly round-up of the latest developments in the Indian competition law space. As the name suggests, this short yet extensive compilation of updates will help you monitor the pulse of the competition law space in India without having to sift through the data mine of various courts and tribunals. This volume covers updates ranging from the key decisions made by the CCI, the National Company Law Appellate Tribunal ("NCLAT"), a couple of High Courts, as well as regulatory and institutional updates.
Separately, for our friends who appreciate the crisp and the sweet, a ready reckoner of the noteworthy developments is set out in the flowchart on the next page.
OVERVIEW OF ENFORCEMENT CASES
Decisions by the CCI:
In the first quarter ("Q1") of the financial year ("FY") 2024-25, the CCI declined to investigate 10 information filed by the informants alleging abuse of dominance and anti-competitive agreements. A summary of the noteworthy cases is set out below:
CCI dismisses information filed against Covai Property Centre and Ozone Urbana for indulging in alleged anti-competitive practices1:
The CCI dismissed an information2 filed against Covai Property Centre (India) Private Limited ("Covai"), Covai Senior Citizen Services Private Limited ("Covai Services") and Ozone Urbana Infra Developers Private Limited ("Ozone") alleging: (i) imposition of vertical restraints such as tie-in; and (ii) abuse of dominant position.
The CCI, relying on publicly available data, observed that apartments catering to the needs of retired/ senior people were emerging as a niche market since a person buying such apartments would focus on amenities such as 24*7 medical emergency facility, food facility/community kitchen, geriatric gyms, etc. These characteristics distinguished such apartments from other apartments that were not created focusing on the needs of retired/senior people. Further, the CCI noted that the projects fall within the Bangalore Metropolitan Region ("BMR"), which is distinct from other neighboring areas. Hence, the CCI was of the prima facie view that the relevant market in the present case would be "the market for provision of services for development and sale of apartment to cater to the needs of senior citizens in the BMR" ("RM").
The CCI observed that in the BMR, apart from Ozone there are many other real estate developers, offering similar services. Hence, Ozone does not appear to hold a position of strength in the RM and the examination of allegations pertaining to abuse of dominance is not warranted. Regarding allegations of imposition of vertical restraint, the CCI noted that for the applicability of the provision, the entities in question must operate at different stages or levels of the production chain. In the present case, the alleged tying agreement was between an enterprise and an end consumer.3 Hence, this was not within the scope of the CCI's review and the CCI dismissed the information.
View: The CCI continues to follow a consistent approach while deciding allegations of vertical restraint being imposed on end-consumers. According to the CCI, these do not fall under the purview of the Competition Act, 2002 ("Act"), and therefore, the CCI has been dismissing such information.
CCI dismisses information filed against Maruti Suzuki for imposing unfair pricing on its customers4:
The CCI dismissed an information5 filed against Maruti Suzuki India Limited ("Maruti"), alleging Maruti's abuse of its dominant position through imposition of unfair and unethical pricing strategy with respect to 'Jimny's 'Thunder' model. Allegedly, Maruti generated an artificial hype in the market that there would be approximately 8 to 10 months of waiting for the 'Jimny' model resulting in customers buying the car in haste. However, soon after its launch, the 'Thunder' variant was also introduced wherein Maruti: (i) offered the car at a discounted price; and (ii) provided certain accessories along with the car on a complimentary basis, which the customers previously had to pay for separately. Further, an extended warranty was also offered for free by many dealers at a later stage which had to be separately purchased by the initial customers.
The CCI noted that the informant did not define any 'relevant market' for the purposes of assessment. However, based on its previous decisions and the characteristics of the car model in question, the CCI noted that in 2023, the market share of Maruti, in the broad market for "passenger vehicle segment in India" is 41.6%, whereas Maruti's market share in the narrow market of the "Sports Utility Vehicle ("SUV") segment of passenger vehicles in India is only 21.5%. Hence, the CCI observed that Maruti was not a dominant player in narrow market of "SUV segment of passenger vehicles in India". The CCI further observed that the informant's allegations regarding product pricing were a private contractual dispute and did not qualify as a competition issue under the Act.
View: The CCI has made it clear that once a buyer purchases a product from a seller at a given price, it cannot insist on availing the benefit of any future discount which may be offered on such a product by the seller. Additionally, the CCI took a firm stance on not considering inter-se disputes as a competition law concern.
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Footnotes
1. Case No. 30 of 2023, Buchi Ramarao Valury vs Covai Property Centre Private Limited & Ors., order dated April 5, 2024, available at: https://www.cci.gov. in/antitrust/orders/details/1108/0.
2. The information was filed by an individual named Mr. Buchi Ramarao Valury, who is a resident of one of the properties developed by Ozone. He alleged that Covai, a company providing consultancy services and care in terms of designing, building and operating retirement communities and Ozone, the developer of the property where the informant resided, had entered into a tie-in arrangement which required the informant to mandatorily avail catering and housekeeping services provided by Covai's subsidiary, Covai Services. Further, there were unilateral changes in allotment of housekeeping staff and increase in monthly maintenance charges under the service agreement between the informant, Covai and Covai Services.
3. It has been alleged that by virtue of the tie-in arrangement between Covai and Ozone, the informant has been forced to accept catering and housekeeping services provided by Covai Services, with whom the informant was required to execute a service agreement.
4. Case No. 43 of 2023, Harmit Ahuja vs Maruti Suzuki India Limited., order dated May 6, 2024, available at: https://www.cci.gov.in/antitrust/orders/ details/1113/0.
5. The information was filed by Harmit Ahuja, an individual and a customer of Maruti who purchased 2 Jimny Alpha variants.
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