In recent times, complaints have been filed under the newly notified sections of the Competition Act, 2002 (CA), whereby prima facie or initial view by the Competition Commission of India (CCI) under the CA, is debatable. To conclude this debate and give a view, would be pertinent to make a brief comparison on the filters considered in framing the initial view under the Monopolies Restrictive Trade Practices Act, 1969 (MRTP Act) and the CA. Further, an initial review of recent orders in public domain by the CCI is also pertinent to understand the CCI’s approach towards the growing Indian Industry.

The erstwhile MRTP Commission instituted inquires on almost all complaints filed before it. There was no obligation on the part of the complainant to pay any filling fee and the Commission more often than not, issued notices to the opposite parties without making a market analysis or competition assessment. With issuance of Notice of Enquiry (NOE) by the Commission, the respondents had no option but to defend the matter thereby making the Indian industry, at times, vulnerable to frivolous complaints and protracted litigations.

On the contrary, the current regime is mandated to act differently in entertaining the information or complaint under CA. At the outset, a filling fee has been prescribed under the Regulations framed under the CA as a condition precedent. This perhaps, would ensure minimizing frivolous complaints and save time and energy of all concerned. Further, CCI is mandated to frame an internal prima facie view on information or complaints filed under relevant provisions of CA. However, the view so framed is not limited to the information provided by the informant but would also be in accordance with relevant provisions of the CA relating to as to what constitutes appreciable adverse effect on competition and/or abuse of dominant position in relevant market in India.

Complaints under the notified sections of the CA are being filed before the CCI, with interesting, though debatable outcomes. CCI has passed a few orders rejecting complaints and allegations therein, holding that no prima facie case exists under the CA. A few of these orders have been reviewed and discussed. The CCI has rejected information filed for contravention of provisions under the CA on the grounds that the information does not provide a basis for forming a prima facie view against the opposite parties.

Information was filed before the CCI by a manufacturer of ductile iron pipes (Manufacturer), alleging cartel like behaviour by the manufacturing association (Association) to mandate preconditions for potable water and sewage system by way of a notification by the concerned Ministry and thereby limiting and restraining manufacturer from manufacturing and marketing such pipes. The CCI on perusal of the information and under the shelter of provisions of CA held that no prima facie case exists and that the purpose of the said notification is to lay down quality standards to, inter alia, ensure appropriate hygiene and sanitation standards in the interest of consumers (refer Order dated 18 May 2010 in Case no. 16/2009). It was further held that the policy was not an influence of any dominant body and was a result of detailed discussions between various Ministries and the Bureau of Indian Standards.

Another information was filed before the CCI, alleging abuse of dominance by an entertainment and broadcasting company (EBC), wherein it was alleged that the informant produced a film which it did not advertise through EBC entertainment channel, as a result of which the informant was endowed with bad film ratings through one of EBC’s TV shows, thereby contravening the provisions of CA by denial of market access in the relevant market. However, CCI on perusal of the information and under the shelter of provisions of CA held that no prima facie case exists as the information provided was not substantial to establish that the said company enjoys dominant position in the relevant market (refer Order dated 2 March 2010 in Case no. 2/2010). Moreover, the CCI also held that simply showing ‘movie meter’ or ‘vote meter’ or ‘rating’ by EBC does not have the effect of limiting or restricting the production of goods or provision of services or market thereof.

A pre-notion and interesting view of the CCI could also be seen in information filed by a developer company (DC) against leading electricity company (EC) alleging abuse of dominance by imposing unfair conditions in granting electricity connections. The EC refused to provide electricity connection to the DC on grounds of unpaid electricity charges of the slum dwellers for the period (2002 – 2004), which is prior to the project allotted to DC although in order to continue work past dues were paid under protest. Accordingly it was alleged that the EC was abusing its dominance of being the sole distributor of electricity in the said area. However the CCI on perusal of the documents and under the shelter of provisions of CA held that no prima facie case existed, as disputed electricity charges related to a period prior to enforcement of the relevant provisions of the CA since the cause of action, ie, the allotment of the project to the DC was issued in the year 2002 and 2004 (refer Order dated 30 March 2010 in Case no. 9/2010).

Supportive view for the industry was taken by the CCI, in an information alleging abuse of dominance by a bank on account of laxity in matters pertaining to forward markets in foreign exchange. The informant, a small scale industry had entered into various derivative transactions with the opposite party and on premature cancellation of the same, suffered losses on account of the change in currency rates. The opposite party rejected the compensation claims and delayed payments to the informant thereby resulting in losses to the informant. However the CCI on perusal of the documents and under the shelter of provisions of CA held that no prima facie case exists as the informant was unable to place concrete material to enable the CCI to infer that the bank was dominant in the relevant market. Moreover, it was also held that the actions amounting to deficiency in services does not tantamount to abuse of dominance (refer Order dated 18 March 2010 in Case no. 8/2010).

The Public Sector Undertakings (PSU) are also within the purview of CA. However, there is lack of clarity on the aspect of PSU’s abusing their dominance and the same can be observed from a recent though silent order of the CCI. The information was filed wherein it was alleged that the PSU is the sole supplier of water to the industries of the members of an association and being a monopolist, it had been charging exorbitant rates for water, despite there being a criteria to determine the rates of water supply. Further, the CCI gave informants an opportunity to corroborate their allegations with substantial evidence/ information, which they failed to do so. However the CCI held that no prima facie case for contravention of section 4 of the CA exists, on legal and economical contemplation of relevant provisions of CA. Moreover, the Corporation was engaged in the activities of growth and development of the industrial sector (refer Order dated 9 March 2010 in Case no. 17/2009).

In the light of the above-mentioned orders, it appears that the CCI may not be flooded with cases/complaints frivolous or otherwise – a visible departure from the previous regime. The MRTP Act was enacted during the era of controlled economic policies and intended to control activities of private enterprises only thereby keeping the competition between public and private enterprises at bay. The CA, on the other hand, facilitates the CCI, to ensure healthy competition in the market and provide a level playing field between public and private enterprises which are trying to win consumers with better quality goods and services with wider choice at affordable prices. However, implementation of the law would be a challenge in the initial years and we will have to wait and watch to see how the law evolves in India to fulfil the intent of the legislation.