COMPETITION ISSUE

The court is to consider following questions pertaining to

 Predatory pricing
 The right to privacy of the company’s corporate correspondences
 Validity and legitimacy of newspaper report
 Judicial probe in the matter

Refernces- Data of % share of ola uber etc

Raghvan Committtee Report

AKZO Chemie BV vs European Commission, United Brands Case and Hoffman-La Roche
Case- to prove predatory pricing, prove dominance and there are various factors to prove
dominance other than market share of the company in the market

Astra Zeneca v. Commission (Case T-321/05) and British Airways plc v. Commission (Case
T-219/99) - decline in the market share cannot be taken as an evidence that the entity is not
dominant.

The judgements of General Courts in the European Commission in cases such as Akzo case,
United Brands v. Commission, Wanadoo Interactive, British Airways, Astra Zeneca, Hoffman-
la Roche etc., along with orders of the Commission in HT Media v. Super Cassettes and MCX-
SX.

European Commission’s case of United Brands v. Commission,

The Commission’s order in the MCX Stock Exchange Ltd v. NSE

Commission’s order in M/s HT Media v. Super Cassettes Industries Limited

MCX Stock Exchange Ltd v. NSE and other to profess that ‘position of strength’ is not some
objective attribute that can be measured along a prescribed mathematical index. Rather, what
has to be seen is whether a particular player in a relevant market has clear comparative
advantages in terms of financial resources, technical capabilities, brand value etc. to be able to
do things which would affect its competitors who, in turn, would be unable to or would find it
extremely difficult to do so on a sustained basis.

Wanadoo Interactive case (COMP/38.233)

The respondents contended that it is a technology company which connects potential customers
and the drivers through technology platform. It referred itself as an ‘aggregator’ of taxis and
claimed that it is not in the business of radio taxis, like other players such as Teru which have
obtained license from the respective transport authorities as radio taxi operators, the court
opined that taxis operating under these different business models are functionally
substitutable.1 i.e. they provide same functional product as other players under asset owned
model.

By merely adopting a new business model of operation for providing the same goods/services,
the incumbent cannot qualify for a distinct relevant product market. relevant product market
under Section 2(t) of the Act

The court is of the view that the radio taxis running on the respondents platform compete with
equally other commercial modes of transport and accordingly, the relevant market should be
defined broadly to capture all such alternative modes of transport as well as they pose an
effective competitive constraint. Therefore, the mere fact of providing online billing and GPS
tracking and other thongs taken together does not make it any different from the relevant market
service provided under the same relevant market.

Having said that the services provided by the respondents fall under the ‘relevant market for
radio taxis’. It is essential and unalienable fragment to prove that the firm has dominant position
in the market. There are various factors (size and importance as in Sec 19(4)) which decides
whether an enterprise is dominant or not, and only some factors, taken in isolation cannot be
conclusive proof of dominance.2

Data

Also, the court is well aware that the multiple registration of the driver under the aggregator
model makes it difficult to identify the amount of the fleet of the player, thus making it hard to
determine the dominance factor for the respondents.

It is also essential that in order to prove dominance of a firm in the market, it must hold share
for a reasonable time. In the present case, the share of Woila and Super keeps on fluctuating

1
Regulatory framework along with advisory issued by Ministry of road transport and highways, govt of India,
2015
2
Mr. Ramakant Kini v. L.H. Hiranandani Hospital, M/s ESYS Information Technologies Pvt. Ltd. v. Intel
Corporation (Intel Inc) & Ors. etc
with the change of circumstance, thus reducing all possibilities of making them dominant firm
in the market.

Based on these reasons, the Court is of the view that the relevant product market in the instant
case is ‘market for radio taxi services’ and the respondents fall into the same. In this relevant
market, the respondents are not alleged to be engaging in abusive conduct by way of predatory
pricing within the meaning of Section 4 of the Act. Whereas the discounts/incentives offered
by the respondents to the commuters/drivers are alleged to be anti-competitive, as the same are
stated to be backed by deep pockets rather than an efficient pricing model of the respondents.

Other anti-competitive strategies- (should we include this) if yes, then add good argument--

The main allegation of the Applicants in the case is that the respondent has abused its dominant
position in the relevant market by offering heavy discounts to the passengers and incentives to
the cab drivers associated with them which amounts to anti- competitive acts and predatory
pricing under Section 4(2)(a)(ii) of the Competition Act. This conduct, as per the applicants,
which they content, has affected other competitors in the market who cannot offer similar
discounts/incentives to commuters/drivers. The applicants have also placed reliance on the
judgement passed by Competition Appellate Tribunal (COMPAT) in the case of Meru Travel
Solutions Private Limited v. Competition Commission of India & Others, where the COMPAT
overturned the order passed by CCI under Section 26(2) of the Act.

The respondents, Woila and Super claimed customer discounts, bonus and driver incentive are
budgeted fixed costs and that it’s low Effective Net Take Rate (‘ENTR’) was not due to below
cost pricing. As such, they have not indulged in predatory pricing by pricing its services below
AVC.3

Considering this point, the court believes that customer discounts, bonus and driver incentives
are not variable costs. Relying on Meru Travel Solutions Private Limited v. Competition
Commission of India & Others where the Court expounded that “the size of discounts and
incentives show that there are either phenomenal efficiency improvements which are replacing
existing business models with the new business models or there could be an anti-competitive
stance to it. [....]” ……….????????

3
ANI Technologies