India – Antitrust, EU Competition

ENTRY

The Indian economy can be considered the equivalent of a heartbeat; it has been characterized by constant ebbs and flows. With the launch of Reliance Jio (which disrupted the Indian telecom market) and various initiatives taken by the government (such as the Digital India Campaign and BharatNet to bridge the digital divide and involve rural areas in the digital inclusion efforts), digital resources are now accessible even to remote households in India. Similarly, the Competition Commission of India (“CCI“), despite having completed a decade and a half of management, has emerged from its infancy and has proven its agility and agility, adapting to the challenges posed by the “Information Age” by making decisions on complex issues in emerging sectors such as digital markets. Keyword Big technology and terms such as
transaction value thresholds have become the subject of everyday conversations between competition regulators and lawyers.

At this critical juncture, INDUSLAW hereby presents its first edition of “Pulse‘, a quarterly summary of the latest developments in Indian competition law. As the name suggests, this short but comprehensive collection of updates will help you keep a pulse on Indian competition law without having to search through the mines of data of various courts and tribunals. This volume covers updates starting with key decisions taken by the CCI, National Company Law Appellate Tribunal (‘NCLAT“), several Supreme Courts, as well as regulatory and institutional updates.

Separately, for our friends who appreciate both crunchy and sweet foods, the next page provides a ready-made list of the most important events in the form of a flowchart.

ENFORCEMENT CASES REVIEW

CCI decisions:

In the first quarter (“Question 1“) fiscal year (“Tax year“) 2024-25, the CCI declined to investigate 10 whistleblower submissions alleging abuse of dominant position and anti-competitive arrangements. A summary of noteworthy cases is given below:

CCI dismisses information filed against Covai Property Centre and Ozone Urbana for alleged anti-competitive practices¹:

CCI dismissed the 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) the imposition of vertical restraints, such as tying; and (ii) the abuse of a dominant position.

The CCI, based on publicly available data, observed that apartments tailored to the needs of retirees/senior citizens were becoming a niche market as the buyer of such apartments would focus on amenities like 24×7 medical facility, food court/community kitchen, geriatric gyms etc. These features distinguished such apartments from other apartments which were not designed keeping in mind the needs of retirees/senior citizens. The CCI further observed that these projects were situated in the Bangalore Metropolitan Region (“Bangalore Metropolitan Region”).WMD“), which is different from other neighbouring areas. Hence, the CCI was prima facie of the view that the relevant market in the present case would be “the market for the provision of services in the field of development and sale of apartments adapted to the needs of seniors in BMR” (“RM“).

The CCI noted that in BMR, apart from Ozone, there are many other real estate developers offering similar services. Therefore, Ozone does not appear to have a strong presence in the BMR and an investigation into the allegations of abuse of dominant position is not warranted. With regard to the allegations of imposition of vertical restraints, the CCI noted that for the provision to apply, the entities in question must operate at different stages or levels of the production chain. In the present case, the alleged binding contract was between an undertaking and the end consumer.³ Therefore, the matter was outside the scope of CCI’s review and CCI rejected the information.

View:The CCI continues to apply a consistent approach in deciding allegations of vertical restraints on end consumers. According to the CCI, these do not fall within the scope of the Competition Act, 2002 (“Work“), therefore, CCI rejects such information.

CCI dismisses information filed against Maruti Suzuki for imposing unfair prices on its customers⁴:

CCI dismissed the information⁵ filed against Maruti Suzuki India Limited (“Maruti“), accusing Maruti of abusing its dominant position by imposing an unfair and unethical pricing strategy in respect of the ‘Thunder’ model of the Jimny. Allegedly, Maruti created an artificial advertisement in the market that the ‘Jimny’ model would have to wait for around 8 to 10 months, which made the customers buy the car in a hurry. However, soon after its launch, a ‘Thunder’ variant was also introduced, wherein Maruti: (i) offered the car at a discounted price; and (ii) provided certain accessories free of cost along with the car, for which the customers had to pay separately earlier. Moreover, at a later stage, many dealers also offered an extended warranty free of cost, which the initial customers had to buy separately.

The CCI noted that the informant had not defined any “relevant market” for the purpose of assessment. However, based on its previous decisions and the characteristics of the particular car model, the CCI noted that in 2023, Maruti’s market share in the broad “passenger vehicle segment in India” is 41.6%, while Maruti’s market share in the narrow “sports utility vehicle” (SV) market isSUV“) passenger vehicle segment in India is just 21.5%. In this regard, the CCI observed that Maruti is not a dominant player in the narrow market of “SUV passenger vehicle segment in India”. The CCI further observed that the allegations of the informant regarding product pricing were a private contractual dispute and did not qualify as a competition issue under the Act.

View: The CCI has clearly stated that once a buyer buys a product from a seller at a given price, he cannot insist on availing the benefit of any future discount that the seller may offer on such product. The CCI has further taken a firm position that disputes between entities are not a matter of competition law.

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Footnotes

1. Case No. 30 of 2023, Buchi Ramarao Valury vs. Covai Property Centre Private Limited and Others, order dated April 5, 2024, available at https://www.cci.gov.in/antitrust/orders/details/1108/0.

2. The information was filed by a person named Mr. Buchi Ramarao Valury, who is a resident of one of the properties developed by Ozone. He alleged that Covai, a company providing consulting and care services in the design, construction and operation of retirement communities, and Ozone, the developer of the property where the informant lived, had entered into a cooperation agreement which required the informant to use the catering and cleaning services provided by Covai’s subsidiary, Covai Services. In addition, there were unilateral changes in the assignment of cleaning staff and increases in monthly maintenance fees under a service agreement between the informant, Covai and Covai Services.

3. It is alleged that under the cooperation agreement concluded between Covai and Ozone the informant was obliged to use the catering and cleaning services provided by Covai Services, with which the informant was obliged to sign a services agreement.

4. Case No. 43 of 2023, Harmit Ahuja vs. Maruti Suzuki India Limited, order dated 6 May 2024, available at https://www.cci.gov.in/antitrust/orders/details/1113/0.

5. The information was submitted by Harmit Ahuja, an individual and a Maruti customer who purchased two versions of the Jimny Alpha.

The content of this article is intended to provide a general guide to the subject. You should seek specialist advice regarding your specific circumstances.