Fair Play - Quarterly Newsletter of Competition Commission of India - Vol. 9

The Quarterly Newsletter of Competition Commission of India (CCI)
Fair competition
for greater good
VOLUME 9 : APRIL - JUNE 2014
IN FOCUS
Advocacy Initiatives with State Governments
IN THIS ISSUE...
3
FROM THE DESK OF THE CHAIRPERSON

4
IN FOCUS ADVOCACY INITIATIVES WITH

STATE GOVERNMENTS
11
13
SECTION 3 & 4
ORDERS
SECTION 5 & 6
ORDERS
15
17
INVESTIGATIONS
INITIATED
ADVOCACY
INITIATIVES
19
21
EVENTS
DEVELOPMENTS IN
OTHER JURISDICTIONS
23
KNOW YOUR COMPETITION ACT
Editor-in-Chief : Dr. Sadhna Shanker

Editor: Sukesh Mishra
Sub Editor: Ashok Raj Gupta
Fair Play Volume 9 : April - June 2014
ANNUAL
DAY
FROM THE DESK OF THE CHAIRPERSON
Many developing countries, including India, have only recently moved from a government controlled economy to
the market economy. The culture of competition is, therefore, weak. This is true not merely of the private sector
but also of the government enterprises and government departments acting in a commercial capacity. For this
reason, compliance with the competition law is poor.
To address this situation, competition laws usually mandate the competition authority to undertake advocacy
measures. Such efforts can raise the level of compliance and also reduce the need for direct intervention by
competition authorities in individual cases.
Advocacy can focus on multiple stakeholders business, trade associations, legal community, judges, government
departments, to name a few prominent target groups. In countries such as India, emerging slowly from the
shadows of a statist regime, advocacy with governments is crucial. The old world laws and regulations need to be
looked at through a new prism and modified or repealed.
The Indian Competition Act specifically provides for advocacy under S.49(3). It also has a provision for reference
by the Central Government or State Governments to the Competition Commission of India to seek its opinion on a
policy or matter which could have a bearing on competition. The Commission is duty bound to offer its view
within 60 days.
The Competition Commission has been pro-active in the area of advocacy generally and, more recently, with
Central government departments and State governments. With a view to making optimum use of the limited
resources at our disposal, the Commission is focussing intensively on advocacy with 12 key economic ministries.
Similarly, it is specially addressing 12 State governments in which the level of economic activity is relatively more
robust. Members of the Commission, assisted by senior professional staff, engage on a continuous basis with
representatives of government(s). Sensitisation about competition matters is now moving ahead towards
identification of specific areas in which competition distortions exist with a view to encouraging the policy makers
to reform the landscape.
Needless to say, advocacy is most effective when it is complemented by vigorous enforcement of the competition
law. It need hardly be underscored that advocacy and enforcement have a common aim : to ensure that
competition is not distorted.
Ashok Chawla
3
Volume 9 : April - June 2014 Fair Play
IN FOCUS
WORK SHOP
Understanding Competition Law And Po

May 23, 2014
Chief Guest : Sri Alok Ranjan, IIDC, Uttar Pra
Organized By : U.P. Academy of Administration & Management, L
Advocacy Initiatives with State Governments

Competition is an essential ingredient of a liberalized economy.
It is a powerful instrument to help in achieving the
macroeconomic policy goals of a nation. It is the key to attain
allocative, productive and dynamic efficiencies, which in the
government context are important for maximising the overall
welfare of society. Government and markets are inextricably
linked. Governments set the legal and institutional frameworks
within which markets operate. They have an interest in market
outcomes and the way these are distributed between different
groups in society.
Some of the most harmful

effects to the economy do not
stem from anticompetitive
conduct by commercial actors
but from unintended
consequences of government
policies.
Frank Maier-Rigaurd (OECD)
olicy
adesh
Lucknow
Increased competition can improve

a countrys economic performance,
open business opportunities to its
citizens and reduce the cost of
goods and services. However,
often many legislations, public
policies and regulations may inhibit
competition in markets. The
distortions caused by government
may emanate from policies in the
area of trade, labour market,
procurement, infrastructure
development, investment etc. that
may sometimes favour public
agencies or create entry barriers
thereby compromising a
competitive environment.
Section 49 of the Competition Act,
2002 (the Act) empowers
Competition Commission of India
(CCI) to take suitable measures for
the promotion of competition
advocacy, creating awareness and
imparting training on competition
issues, not only for the private
bodies, but also for government
and policy makers. CCI, as a
regulatory authority, in terms of the
advocacy provisions of the Act, is
enabled to participate in the
formulation of the countrys
economic policies and to
participate in reviewing of laws
related to competition.
The Central/State Government,
while formulating a policy on
competition including review of
laws related to competition, or on
any other matter, may make a
reference to the Commission for its
opinion on possible effect of such
policy on competition. It is
pertinent to mention that the
opinion given by the Commission is
not binding upon the Central/State
Government. Further, under Sec 21
of the Act, statutory authorities may
make a reference to CCI on
competition issues; however, the
role of the Commission is advisory

only.
Why advocacy with State

Governments?
The Monopolies and Restrictive
Trade Practices Act (MRTP), 1969,
exempted State owned enterprises
(SOEs) from its purview. However,
to embrace the needs and
challenges of the new economic
order, the competition law regime
underwent a paradigm shift. The
MRTP Act gave a way to the new
competition law, the Competition
Act, 2002. The ambit of this law
extends to enterprises and
departments of the government, as
long as they are engaged in the
production, storage, supply and
distribution of goods or services in
a commercial manner.
The Act defines the term
enterprise in section 2(h) as
a person or a department of
the Government, but
does not include any activity
of the Government relatable
to the sovereign functions of
the Government including all
activities carried on by the
departments of the Central
Government dealing with
atomic energy, currency,
defence and space
Hence, the Act does not make any
distinction between the public and
private sector in enforcement. In
the last few years a large number
of cases have come against both
Central and State governments and
their public sector undertakings
before CCI. Keeping this in view,
for the last one year the focus of
advocacy efforts of CCI has been
Government; both Central and

State.
State Governments proactively
engage in areas like public health
and sanitation; communication;
roads; bridges; agriculture;
including agricultural education
and research; water supplies;
transportation, gas and gas works
etc. Effective implementation of
competition law would not only
improve the efficiency of the above
mentioned activities but also help
the states in reducing their fiscal
and revenue deficits through
efficiency gains and savings of
public money.
Approach
In order to utilize resources and
manpower effectively, and work
towards a long term partnership it
was decided to focus on a few
states on priority. Accordingly,
twelve states (based on high Gross
State Domestic Product at 2004-05
prices) namely Maharashtra, Uttar

Pradesh, Tamil Nadu, Andhra
Pradesh, Gujarat, West Bengal,
Karnataka, Rajasthan, Kerala,
Madhya Pradesh, Haryana and
Punjab were identified for focused
advocacy interventions.
As a first step, Chief Secretaries of
the states were requested to
appoint a nodal officer; with an
objective to facilitate interaction
and disseminate the information on
competition law among various
stakeholders in that state. Within
the Commission itself, nodal
officers were appointed for each
state to facilitate coordination and
cooperation.
Thereafter, Members of the
Commission were requested to
adopt a handful of states for
advocacy engagement and
thereafter the Chief Secretaries
were approached to have a first
meeting in the state along with
their senior officers. To conduct
advocacy events with state

governments the CCI team
comprising a Member of CCI, one
Adviser and the nodal officer of the
state was constituted. The team
identified key areas of interest and
the sectors that exhibited
prevalence of anticompetitive
practices in the concerned state. As
a result of these efforts the
following interactions have taken
place
>
A workshop was organized in
Department of Industry, Govt.
of NCT of Delhi in April 2013,
to sensitize them about the
need to adopt competition
friendly policies and comply
with the provisions of the Act.
Two presentations were made
in the workshop; Overview of
Competition Law and Public
Procurement & Competition
Law.
>
After a meeting with the Chief
Secretary, Kerala and other
senior officer of State of Kerala

in July 2013, two workshops on
competition issues were
organised by Government of
Kerala in January, 2014 at
Thiruvananthapuram and Kochi
respectively.
>
After meeting with Chief
Secretary and other senior
officer of State of U.P. in July
2013, a Workshop on
Exploiting Benefits of
Competition was organised
with Government of Uttar
Pradesh at Lucknow in January
2014. This was followed by a
programme on "Understanding
of Competition law and policy"
organised by the Utter Pradesh
Academy of Public
Administration and
Management, Lucknow for the
senior government officials of
the State.
>
A workshop on Application of
Competition law was
organized in Mumbai in
October 2013. The participants
of the workshop included Chief
Secretary and senior officers of

Government of Maharashtra.
Two presentations were made
in the workshop; Scheme of
the Competition Act, 2002
including Powers, Functions &
Duties of CCI and Potential
Anti-Competitive Conduct of
Firms by way of Bidrigging/Cartelization. This was
followed by a workshop held at
Yashwantrao Chavan Academy
of Development and
Administration (YASHADA),
Pune in May, 2014 on
Competition law and public
procurement. Around 60 senior
officials from various
departments of Maharashtra
participated.
>
After a meeting with Chief
Secretary West Bengal and his
team, a workshop was held on
Competition law at Kolkata in
June, 2014 that was attended
by the senior government
officials of the State of West
Bengal.
What progress has been

made?
In order to provide impetus to the
initiative, the following steps have
been suggested by CCI
>
Constitution of a State level
Steering Committee on
competition issues
comprising secretaries,
representative of state PSEs,
state training institutions etc.
The Steering Committee
would guide the overall
strategy and review the
implementation of the
initiative periodically. The
Committee may have following
objectives:a) To disseminate information of
competition and to inculcate
a culture of competition
among various stakeholders
in that state.
b) To conduct assessment of
laws and policies in the light
of competition and to suggest
suitable amendments to
rectify provisions of the

legislation and policies that
impede competition.
c) To conduct state specific
market research with an
objective to understand and
identify the prevailing anticompetitive practices.
A Core Group on
>
Competition with 7-8
members, including a
representative of CCI, to be
constituted at state level,
which would be responsible
for promoting competition and

work under the guidance of
the Steering Committee.
>
Partner with a State Government
institution (e.g. State Training
Academy). The institution would
be responsible for transfer of
knowledge from CCI, organizing
training programs/workshops
(including training of trainers),
identification of possible areas
of reference to CCI for its
intervention, action, research,
etc.
The above recommendations have

been put in place by the State
governments of Maharashtra, Uttar
Pradesh and Kerala. The
experience of these engagements
has clearly indicated that State
Governments are keen to partner
with CCI in an endeavour to reap
the benefits of competition law. In
the next few months interactions
are planned with the other focus
states.
Conclusion
It is hoped that over time this
partnership would start working
towards assessment of existing
policies, regulations and
legislations in States that have the
capacity to impact the markets
adversely. Such an approach would
yield strong economic benefits as it
would make way for policy
alternatives that would continue to
meet socio-economic goals, while
promoting and fostering a
competition culture.
ANNUAL DAY 2014
It was on May 20, 2009 that

enforcement of all provisions of the
Competition Act 2002 (except
sections 5 & 6) came into effect.
Every year since then, 20 May is
commemorated as the Annual Day
in CCI. In this sequence CCI
celebrated its 5th Annual Day on
20th, May 2014. The highlight of
the event was the Annual Day

Lecture delivered by Dr.
Raghuram Rajan, Honble
Governor of Reserve Bank of India
(RBI). As Chief Guest he also
released seven newly designed
Advocacy booklets brought out by
the Commission.
To celebrate the Annual Day more
than three hundred fifty guests

representing stakeholders,
competition law practitioners,
diplomats, government, media and
the banking sector were present.
After a welcome address by Mr
Ashok Chawla, Chairperson CCI,
Dr Rajan spoke on Competition in
the banking sector: Opportunities
and Challenges.
Dr Rajan opened his address by

acknowledging that Competition is the life
force of a modern economy and highlighted
the role of Competition Commission of India
as a central player contributing to sustainable
economic growth in India. He then analyzed
competition in Indias banking sector in
detail. He highlighted that the Reserve Bank
of India is committed to freeing entry into the
banking sector, as was evident from the grant
of two new banking licenses in the recent
past. He pointed out that although priority
sector lending would continue in a
developing country like India, there needs to
a continuous rethink on what constitutes the
priority sector as the economy evolves.
Focusing on public sector banks, the
Governor was of the view that a change in
governance, management, and operational
and compensation flexibility was needed to
improve their functioning. Maintaining that
the banking sector is on the cusp of
revolutionary change, he felt public sector
banks should venture into areas hitherto
unexplored by them without compromising
on their Public character.
The lecture was followed by an enthusiastic
question and answer session. The eclectic
nature of the audience was on display in the
range of questions fielded by Dr Raghuram
Rajan.
Secretary, Ministry of Company Affairs,
Government of India, Shri Naved Masood
concluded the function by proposing a vote
of thanks.
10
SECTION 3 & 4 ORDERS

M/s Coal India Limited found to
Abuse its Dominant Position
In Case No. 44 of 2013, the
Commission held M/s Coal India
Limited (CIL) responsible for
abusing its dominant position. CIL,
along with its subsidiaries, was
alleged to be enjoying a virtual
monopoly over the production and
supply of coal and was able to
force its consumers i.e., companies
involved in manufacturing of
Sponge Iron, Steel and dependent
upon it, to enter into one-sided
anti-competitive Fuel Supply
Agreement (FSA) and
Memorandum of Understandings
(MoUs) under which these buyers
had no bargaining power. Bereft of
any alternative option, these
buyers had no choice but to accept
the terms and conditions laid down
under the FSA and MoUs. Further,
despite such unfair terms and
conditions under the FSA and
MoUs, there was no guarantee for

the buyers that the quality or the
quantity of coal being supplied will
be in conformity with the terms
and conditions as mandated
therein. On various occasions,
these buyers rejected the poorquality coal supplied by the
opposite parties, but CIL regarded
it as a case of deemed delivery
under FSA and declared that the
buyer was liable to pay for the
rejected coal.
After perusing the material on
record and hearing the parties, the
Commission held that CIL and its
subsidiaries enjoy undisputed
dominance in the relevant markets
of supply of non-coking coal to the
sponge iron manufacturers in
India. It was observed that various
clauses such as grading of coal and
procedure for declaration of grade,
sample collection and assessment

of quality of coal, oversized
coal/stones and compensation,
issue of supply through MOU etc.,
are unfair. The Commission held
M/S CIL to be in contravention of
the provisions of section 4(2) (a) (i)
of the Act for imposing unfair/
discriminatory conditions in supply
of non-coking coal to the
informant and other consumers.
Accordingly, the Commission
directed them to cease and desist
from indulging in such conduct.
However, since a penalty was
imposed in an earlier case to the
tune of INR 1773.05 Crores on
CIL, the Commission decided not
to impose further penalty in this
case. The Commission, however,
ordered that the FSA be modified
in light of the observations and
findings made in the order.
No Abuse of Dominance by Adidas AG Group

premium sports goods for retailing.
In Case No. 10 of 2014, the

informant Mr. Om Datt Sharma
alleged that M/s Adidas AG,
Germany (OP 1), M/s Reebok
International Limited, USA (OP 2)
and M/s Reebok India Company,
New Delhi (OP 3), as a group,
infringed the provisions of Section
4 of the Competition Act, 2002
(the Act) with respect to sale of
As per the information, the

Informant was appointed as a
franchisee of OP 3 in Noida on
27.08.2003 through a franchise
agreement initially for three years,
subject to renewal. On oral
assurance of OP 3, the Informant
continued to carry on the business
as per the Agreement till February,
2009 without further renewal. It
was alleged that the OP 3 had
failed to fulfil several of its
obligations such as to pay the
amount due under the Agreement,
to collect the unsold stocks/goods
11
etc., which caused financial loss to

the informant and amounted to
imposition of unfair terms and
conditions in contravention of the
provisions of Section 4(2) (a) (i) of
the Act. Further, OP 3 was
practising differential discount
policy vis-a-vis other franchisees
which was discriminatory and
infringed the provisions of Section
4(2) (a) (ii) of the Act. The
Informant contended that though
the Agreement was executed prior
to the Act coming into force,
however, the Adidas AG Group
become liable since the anticompetitive effects of the
Agreement continued after the

enforcement of the relevant
provisions.
The Commission considered the
relevant market as the market of
premium sports-goods in Noida.
Based on the information
provided, it was observed that all
the Opposite Parties could be
treated as a group for the purpose
assessing dominance of the
Opposite Parties in the relevant
market. The Commission was of
the view that the Adidas AG Group

was in a dominant position in the
relevant market. It was observed
that the Agreement which was
alleged as unfair was entered into
in 2003 when the Group had not
even come into existence. Further,
the Commission was of the view
that although there were certain
differences between the two
franchisee agreements the
differences cannot be termed as
abusive unless they are
discriminatory within the meaning
of section 4(2) (a) (ii) of the Act.

Also, a manufacturer is not
obligated to follow a single
template agreement throughout its
existence. Accordingly, the
Commission was of the opinion
that the conduct of the Adidas AG
Group, prima facie, did not
amount to contravention of the
provisions of Section 4 of the Act
and accordingly, the Commission
closed the matter under the
provisions of 26 (2) of the Act.
Conduct of Ms Snapdeal.com and

Ms SanDisk Corporation not found to be Abusive
to produce a No Objection
Certificate (NOC) from OP 2 for
sale of its products on its web
portal. It was also alleged that OP 1
and OP 2, in agreement with each
other, were compelling the
informant to become the
authorized dealer of OP 2.
In case no. 17/2014 the Informant,

Mr. Ashish Ahuja had alleged that
Snapdeal.com (OP 1) and SanDisk
Corporation (OP 2) had violated
the provisions of Sections 3 and 4
of the Act in respect to online sale
of small-sized consumer storage
devices produced by OP 2 . The
Informant had entered into an
online agreement with OP 1 for
sale of goods through its online
website portal. It was alleged that
OP 1 took off the Informants
products from its online portal and
asked the Informant to sell the
products of OP 2 only or of the
authorized dealers of OP 2.
Further, OP 1 asked the Informant
The market for portable small-sized

consumer storage devices such as
USB pen drives, SD Memory Cards
and Micro SD Cards in India was
considered as the relevant market
by the Commission. It was
observed that such devices are
offered by firms such as Transcend,
Kingston, HP and others with
different capacities indicating that
the market is not concentrated. It
was observed that in the overall
consumer storage flash memory
market OP 2 is a market leader
followed by Transcend and
Kingston. The Commission was of
the view that the insistence by OP
2 that the storage devices sold
through the online portals should
be bought from its authorised
distributors by itself cannot be
considered as abusive as it is within
its rights to protect the sanctity of
its distribution channel. Further, in
a quality-driven market, brand
12
image and goodwill are important

concerns and it appears a prudent
business policy that sale of
products emanating from
unknown/ unverified/unauthorised
sources are not
encouraged/allowed.
With regard to the alleged conduct
of OP 1, the Commission observed
that it is operating in the ecommerce market wherein players
like FlipKart, Amazon, eBay,
ShopClues, Yebhi, jungle.com,
rediff.com, indiatimes.com etc. are
competitors of OP 1. With the
presence of large players as stated
above, OP 1 prima facie cannot be
termed as a dominant player in the
e-commerce market. In the
absence of dominance, the
conduct of OP 1 cannot be
considered as abusive in terms of
the provisions of Section 4 of the
Act. Further, the Commission
noted that the conduct of OP 2 in
restricting the market to its
authorised sellers alone, prima
facie, does not appear to be in
violation of Section 3 of the Act.
Accordingly, the Commission
closed the matter in terms of
Section 26(2) of the Act.
SECTION 5 & 6 ORDERS

Commission Approves the Combination Between
Trent Hypermarket Limited and
Tesco Overseas Investments Limited.
Tesco Overseas Investments

Limited (TOIL), a wholly owned
subsidiary of Tesco Plc, UK, filed a
notice for the acquisition of 50
percent of the issued and paid-up
equity share capital of Trent
Hypermarket Limited (THL)
pursuant to the execution of a Joint
Venture Agreement and a Share
Purchase Agreement between
TOIL, THL and Trent Limited
(Trent).
TOIL is the holding company for
several of the Tesco Groups
overseas retail businesses in various
countries, primarily engaged in the
retail trading of grocery and
general merchandise through
various formats including
hypermarkets, supermarkets,
convenience stores and franchised
stores. Trent is engaged in the
business of retail of ready-made
garments and accessories,
footwear, cosmetics, accessories,
gift items and household items, in
India. THL, a wholly owned

subsidiary of Trent, is engaged in
the business of multi-format retail
trading in India including
hypermarkets, supermarkets and
smaller convenience stores. The
Commission observed that while
THL is engaged in the business of
multi-format retail trading in India
including hypermarkets,
supermarkets and smaller
convenience stores, TOIL is not
present in the retail market in India
and therefore, there is no
horizontal overlap between the
business activities of THL and TOIL
in the retail market in India.
The Commission also observed that
the retail market in India comprises
both organised and unorganised
retailing. The organized retailing
includes the hypermarkets,
supermarkets, departmental stores
etc. The retail market in India is
dominated by a large number of
unorganized retailers consisting of
13
the local kirana shops, ownermanned or self-owned general

stores and shops, hawkers,
pavement vendors etc. Further,
due to increased internet
penetration and changing lifestyles,
the Indian retail market has also
witnessed a surge in online retailers
which has widened the choice for
the consumers. Further, the total
revenue of THL was also
considered insignificant as
compared to the size of the overall
retail market as well as the
organised retail market in India.
The Commission approved the
combination under sub-section (1)
of Section 31 of the Act. However,
the Commission imposed a
penalty of INR three crores on
TOIL as the notice of the
combination was not given by
TOIL within the time prescribed
under sub-section (2) of Section 6
of the Act.
Commission approves the combination between

Thomas Cook India Limited and
Sterling Holiday Resorts (India) Limited
Thomas Cook (India) Limited

(TCIL), Thomas Cook Insurance
Services (India) Limited (TCISIL),
a subsidiary of TCIL, and Sterling
Holiday Resorts (India) Limited
(SHRIL) filed a notice, whereby,
the resorts and time share business
of SHRIL was proposed to be
transferred by way of a demerger
from SHRIL to TCISIL and SHRIL,
with its residual business, was
proposed to be amalgamated into
TCIL.
TCIL was stated to be engaged in
travel and travel related services
including leisure travel services,
corporate travel services and
foreign exchange services. TCISIL,
was stated to be an Insurance
Regulatory and Development
Authority (IRDA) registered
corporate agent of Bajaj Allianz
General Insurance Company
Limited, engaged in the business of
selling insurance to outbound
travellers as well as, though in a
very small proportion, health
insurance, home insurance, motor

insurance, personal accident
insurance, fire insurance and
marine insurance. SHRIL was
stated to be engaged in the
business of providing premium
hotel services, vacation ownership
services or the timeshare services,
normal hotel services like renting of
rooms, restaurants, holiday
activities, etc. as well as providing
corporate clients with MICE
(meetings, incentives, conference &
events) services.
The combination concerned the
travel and hotel related services in
and from India. As per the details
provided in the notice, the Parties
were not engaged in similar
business. The business of TCIL
offering holiday package/other
travel related services and the
business of SHRIL providing resort
and hotel services were related to
each other at different stages/levels
of the production chain. However,
it was stated by the parties that the
14
vertical arrangements between

SHRIL and TCIL were insignificant.
The Commission observed that
SHRIL is primarily engaged in the
vacation ownership services where,
in general, the customers are stated
to directly deal with the service
provider. It was further observed
that the business of hotel services
across India is relatively fragmented
and there are different channels for
availing the hotel services along
with the presence of large number
of big players as well as
intermediaries/agents.
The Commission approved the
combination under sub-section (1)
of Section 31 of the Act. However,
the Commission imposed a
penalty of INR 1 crore under
Section 43A of the Act on the
parties, for consummating the
market purchases of equity shares
of SHRIL before giving notice to
the Commission for the proposed
transaction.
INVESTIGATIONS INITIATED
Association of Third Party Administrators vs.
General Insurers' (Public Sector) Association of India.
The Commission has recently

ordered an investigation by the
Director General, CCI under
Section 26 (1) of the Act against
General Insurers (Public Sector)
Association of India (GIPSA) and
other Public Sector General
Insurance Companies for alleged
anti-competitive practices.
It was alleged that the Public
Sector General Insurance
Companies namely New India
Insurance, Oriental Insurance,
United Insurance and National
Insurance dealing in health
insurance business were not
allowing Third Party Administrators
(TPAs) to function independently
and on the contrary have created

in-house TPAs to settle any
insurance claims. The aforesaid
conduct of the opposite parties was
against the prevailing world wide
practice to keep TPAs independent
from the insurance companies. It
was also alleged that the GIPSA
which is an ad-hoc unregistered
body is providing a platform to the
insurance companies to share
sensitive information with each
other, which not only affects
competition in the market, but also
provides space to them for
exchanging information regarding
claims ratio, marketing efforts,
terms and condition of TPAs etc.
15
The Commission after considering

the matter was prima facie
satisfied that a case was made out
under Section 3 of the Act. It was
observed that the Opposite Parties
have floated in house TPAs to
reduce their claim ratio which may
potentially result into rejection of
claims on ad-hoc basis. The said
practice was found by the
Commission to not be in
alignment with prevailing global
practices where the TPAs and
insurers are operating
independently.
Chief Materials Manager, North Western Railways

vs. Milton Industries Limited and 04 ors.
The Commission has acted in the
matter on the basis of information
filed by the Chief Materials
Manager, North Western Railways
alleging a cartel between Opposite
Parties in the tender process for
supply of Fire Retardant Fabric
(FRF) to the Railways.
It was alleged that out of 5
Opposite Parties only one Opposite
Party used to quote regularly in the
tender process and others simply
16
abstained from quoting any rate in

the tender process. It was
therefore alleged that all the
Opposite Parties have a nexus with
Opposite Party No. 4 which usually
quotes very exorbitantly without
any reasons.
The Commission prima facie held
that all the RDSO approved
Opposite Parties are engaged in
the business of FRF have entered
into a tacit understanding with
each other to facilitate the
Opposite Party No. 4 to secure the
tender at the prices it quoted by
abstaining from the tender process.
It was further observed that such
behavior indicates deliberate
reduction of competition in the
supply of FRF to Railways which
not only hampers competition, but
is also violative of Section 3 (3) of
the Act. While directing the
investigation by Director General
CCI, the Commission has also
taken into consideration past
conduct of the cartel which was
closed by the Commission as the
matter was related to the period
prior to the date of enforcement of
Section 3 of the Act.
ADVOCACY INITIATIVES
Trade Associations
Shri Ashok Chawla, Chairperson, CCI inaugurated a

conference on Boosting Competition Compliance
Tackling Challenges organized by Confederation of
Indian Industry at Mumbai in June 2014. Shri
Augustine Peter, Member, CCI chaired a technical
session on Merger Regulations at the same
conference
Officers of CCI held a session on Competition
Compliance in ASSOCHAMs Seminar on
Compliance & Complications under Companies Act
2013 in June 2014 at New Delhi.
Professional/Management Institutes
Officers of the Commission addressed IIM Lucknow- NOIDA Campus in May 2014 on Competition
policy in India, which was attended by participants of the executive program.
Members of ICAI-EIRC were addressed on Scope for Chartered Accountants under the Competition Act
at Kolkata in June, 2014.
17
Internship
Programme
To familiarize students with
Competition Law, CCI has an
internship programme for
students pursuing study in
law, economics,
management and regulatory
governance. Under the
programme students get an
opportunity to research on
various competition related
issues under a mentor from
Commission. From April to
June 2014, twenty three
students successfully interned
with the Commission.
18
EVENTS
A three member CCI delegation

led by Chairperson Mr. Ashok
Chawla attended the three day
ICN annual conference (April 2325) and the pre-ICN forum
organised by the World Bank on
April 22, 2014 at Marrakech,
Morocco.
CCI delegation participated in a
number of conference sessions and
meetings which included the preICN forum meeting titled
competitive domestic markets: the
cornerstone to boost trade and
competiveness on April 22, 2014.
During the three day ICN
conference- the delegation
attended the opening session, first
plenary session on State-owned
Enterprises under Competition
Law, second plenary session on
Agency Effectiveness Working
Group: Investigative process and its
BOS, meeting with United Nations
Conference Trade and
Development and ICN-Co Chairs
Meeting. On the second day the
delegation attended the optional
BOS on the ICN curriculum
Project, the Advocacy Working
Group Plenary in Teaming up
International
Competition
Network
against Cartels: how ICN promotes

effective cartel enforcement, BOS
and optional Merger Working
Group Meeting. On day three the
delegation attended the Merger
Working Group Plenary on
International Cooperation in
Merger Cases, and the merger BOS
on Fostering Convergence in
Merger Notification & Procedures :
Challenges for New Competition
Agencies and the role of MWG
Outreach, the session on
implementation, and the closing
ceremony.
The Delegation attended and
convened following meetings
during the conference:
I.
Meeting with the USFTC and

the DOJ heads and officials
II. Meeting with BRICS

counterparts, and
III. Meeting with Asia Pacific
Competition Authorities
19
CCI officials participated

in various workshops/
seminars/ meetings,
some of which are:
a) OECD-Korea
Policy Center
Workshop on
Evidentiary Issues
in Establishing
Abuse of
Dominance held
during June 2014
in Jeju Island,
Korea.
b) 2nd Training Course
on Competition
Law and Policy for
Asian Countries
organized by the
Japan Fair Trade
Commission
(JFTC) & Asian
Development
Bank (ADB)
during June 2014
in Tokyo, Japan.
Capacity Building Events

a) Induction training for the newly joined direct recruitment officers was
organized in CCI during April 2014.
b) Three Specialized workshop for CCI officials under EU- Capacity
Building Initiative for Trade and Development (CITD) program were
organized during May 2014. The subjects were as below
Prima Facie Investigations
Drafting Orders in Combination Cases
Advocacy: Public Access to CCI Orders
20
DEVELOPMENTS IN OTHER
JURISDICTIONS
CCS Fines First

Global Cartel
The Competition Commission of
Singapore (CCS) has fined three
Japanese bearings manufacturers
and their Singapore subsidiaries
S$9.3 million for taking part in a
ball bearing pricing cartel, the first
move in a global investigation of
price-fixing by car parts makers.
CCS fined Nachi-Fujikoshi Corp
S$7.6 million, the largest fine the
regulator has ever levied. NSK Ltd
and NTN Corp were given smaller
fines of S$455,652 and S$1.3
million respectively. This was the
enforcers first international cartel
case involving foreign-registered
companies and their Singapore
subsidiaries.
CCS found that the Parties were

competitors and met regularly at
meetings both in Japan and
Singapore where they exchanged
information, discussed and agreed
on sales prices for Bearings sold to
their respective Aftermarkets
Customers in Singapore, so as to
maintain each participants market
share and protect their profit and
sales.
In levying the financial penalties,
CCS took into account various
factors such as seriousness of the
infringements, each partys relevant
turnover, duration of the
infringements, aggravating and
mitigating factors etc.
21
EU fines three
producers of
canned
mushrooms
32 million
in cartel
settlement
The European Commission has
imposed fines totalling
3,22,25,000 on Lutce,
Prochamp and Bonduelle for
participating in a cartel to
coordinate prices and allocate
customers of canned mushrooms
in Europe during more than a year.
The cartel members exchanged
confidential information on
tenders, set minimum prices,
agreed on volume targets and

allocated customers. Lutce was
not fined as it revealed the
existence of the cartel to the
Commission. Prochamp benefitted
from fine reductions for
cooperating with the investigation
and was fined 20 21 000.
Bonduelle was fined 30 204 000
for breaching antitrust rules.
In setting the level of fines, the
Commission took into account, in
particular, the companies' sales of
the products concerned in the
European Economic Area (EEA),
the serious nature of the
infringement, its geographic scope
and its duration.
Fair Play Volume 89 : January

- March
April - June
20142014
KFTC imposed
penalty against
turf bid riggers
Koreas Fair Trade Commission
(KFTC) has fined 17 artificial turf
manufacturers 7.4 billion Won
(5.3 million) for colluding to rig
bids on more than 200 public
projects. Five of the companies
whose violations were particularly
serious and who actively took part
in bid rigging may face criminal
prosecution.
22
The manufacturers had rigged the

artificial turf bids called for by the
Public Procurement Services (PPS)
upon requests from schools, local
governments etc. They discussed
each bidding procedure in
advance over the telephone or
through meetings before (or after)
receiving tender documents.
Collusions have been made
continually for 255 bidding
procedures (total amount of
contracts awards: approximately
73.3 billion won). Consequently,
the average ratio of successful bid
prices reached approximately 95%,
much higher than the average ratio
of successful bid prices tendered
for contracts made without
collusion, which was
approximately 65%.
KNOW YOUR COMPETITION ACT
Appellat
n
eT
o
itti
u
rib
nal
Com
pe
This issue focuses on the Competition

Appellate Tribunal (COMPAT)
accountancy, management,
industry, public affairs,
administration or in any other
matter which in the opinion of the
Central Government, may be
useful to the Appellate Tribunal.
The Chairperson and Members of
COMPAT are appointed by the
Central Government from a panel
of names recommended by a
selection committee that consists
of the Chief Justice of India or his
nominee and two Secretaries of
Government of India.
The Competition Appellate

Tribunal (COMPAT) was created in
the year 2007 by way of amending
the Competition Act, 2002. It
became functional on May 15,
2009. It is a an adjudicatory body
headed by a sitting or retired judge
of the Supreme Court or the Chief
Justice of a High Court along with
two other Members.
Eligibility
Tenure
A Member of the Appellate

Tribunal shall be a person of ability,
integrity and standing having
special knowledge of, and
professional experience of not less
than twenty-five years in,
competition matters, including
competition law and policy,
international trade, economics,
business, commerce, law, finance,
23
The Chairperson or a Member of

the Appellate Tribunal shall hold
office for a term of five years and
shall be eligible for reappointment. Provided that no
Chairperson or other Member of
the Appellate Tribunal shall hold
office after he has attained the age
of sixty-eight years or sixty-five
years respectively.
Commission can file the appeal

before COMPAT within a period of
60 days. However, the COMPAT
has the power to condone delay
beyond this period of sixty days.
Powers
COMPAT is the forum for first
appeal before which any direction,
decision or orders passed by the
CCI as provided under section
53A(a) of the Act are adjudicated.
The COMPAT has powers to
adjudicate on any claim for
compensation which may arise
from either the findings given by
the CCI or the orders passed by the
COMPAT upon receiving an
application from the affected party.
The orders passed by CCI under
sections 26(2), 26(6), 27, 28, 31,
32, 33, 38, 39, 43, 43A, 44, 45 or
46 of the Act are challengeable
before COMPAT. Any person
aggrieved by the direction,
decision or order passed by the
As per Section 53O of the Act, the

COMPAT is not bound by the
procedure laid down under the
Code of Civil Procedure, 1908 but
shall follow the principles of natural
justice. It has powers to regulate its
own procedure subject to the Act
and any rules made by Central
government.
Further, COMPAT has the power
inter alia to summon and enforce
the attendance of a person, receive
evidence on affidavit, issue
commissions for examination of
witness. The COMPAT is vested
with the power to review its
decisions. It is also vested with
numerous powers to enforce its
orders, including contempt powers

as vested to High Courts under the
Contempt of Courts Act, 1971.
Every order made by the Appellate
Tribunal shall be enforced by it in
the same manner as if it were a
decree made by a court in a suit
pending therein.
Finally, the appeal challenging the
orders or decisions of the COMPAT
is to be filed in the Supreme Court
within 60 days of receipt of the
order.
Currently the COMPACT is
headquartered in New Delhi and
functioning from 1, Shahjahan
road, New Delhi 110011.
Competition Commission of India

The Hindustan Times House
18-20, Kasturba Gandhi Marg
New Delhi- 110001
Please visit www.cci.gov.in for more information about the Commission.
For any query/comment/suggestion, please write to advocacy@cci.gov.in
Disclaimer: The contents of this publication do not necessarily reflect the official position of the Competition Commission of
India. Contents of this newsletter are only informative in nature and not meant to substitute for professional advice. Information
and views in the newsletter are fact based and incorporate necessary editing.
24

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Fair Play - Quarterly Newsletter of Competition Commission of India - Vol. 9

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The Quarterly Newsletter of Competition Commission of India (CCI)

VOLUME 9 : APRIL - JUNE 2014

Advocacy Initiatives with State Governments

FROM THE DESK OF THE CHAIRPERSON

IN FOCUS ADVOCACY INITIATIVES WITH

KNOW YOUR COMPETITION ACT

Editor-in-Chief : Dr. Sadhna Shanker

Fair Play Volume 9 : April - June 2014

FROM THE DESK OF THE CHAIRPERSON

Volume 9 : April - June 2014 Fair Play

Understanding Competition Law And Po

Chief Guest : Sri Alok Ranjan, IIDC, Uttar Pra

Organized By : U.P. Academy of Administration & Management, L

Advocacy Initiatives with State Governments

Fair Play Volume 9 : April - June 2014

Some of the most harmful

Increased competition can improve

role of the Commission is advisory

Why advocacy with State

Volume 9 : April - June 2014 Fair Play

Government; both Central and

Fair Play Volume 9 : April - June 2014

prices) namely Maharashtra, Uttar

advocacy events with state

senior officer of State of Kerala

Secretary and senior officers of

What progress has been

Volume 9 : April - June 2014 Fair Play

rectify provisions of the

for promoting competition and

Fair Play Volume 9 : April - June 2014

The above recommendations have

ANNUAL DAY 2014

It was on May 20, 2009 that

the event was the Annual Day

than three hundred fifty guests

Volume 9 : April - June 2014 Fair Play

Dr Rajan opened his address by

Fair Play Volume 9 : April - June 2014

SECTION 3 & 4 ORDERS

MoUs, there was no guarantee for

sample collection and assessment

No Abuse of Dominance by Adidas AG Group

In Case No. 10 of 2014, the

As per the information, the

etc., which caused financial loss to

Agreement continued after the

the view that the Adidas AG Group

of section 4(2) (a) (ii) of the Act.

Conduct of Ms Snapdeal.com and

In case no. 17/2014 the Informant,

Fair Play Volume 9 : April - June 2014

The market for portable small-sized

image and goodwill are important

SECTION 5 & 6 ORDERS

Tesco Overseas Investments

India. THL, a wholly owned

the local kirana shops, ownermanned or self-owned general

Volume 9 : April - June 2014 Fair Play

Commission approves the combination between

Thomas Cook (India) Limited

Fair Play Volume 9 : April - June 2014

insurance, home insurance, motor

vertical arrangements between