The article ’10 Important Competition Law Cases’ provides a concise overview of ten significant competition law case laws from various jurisdictions that have shaped the landscape of antitrust regulation. Competition law, also known as antitrust law, plays a pivotal role in maintaining fair and competitive markets.
1. Competition Commission of India v. State of Mizoram, Civil Appeal No. 10820-10822 of 2014
Facts: The Government of Mizoram has released Expressions of Interest (EOI) to invite proposals for the selection of lottery distributors and selling agents for the State lotteries. These lotteries are conducted in compliance with the Mizoram Lotteries (Regulation) Rules, 2011, which were enacted under the provisions of the 1998 Lotteries (Regulation) Act.
This initiative encompassed both traditional paper-based methods as well as an online approach. According to the Expression of Interest (EOI), bids failing to achieve the minimum rate established by the Government of India, specifically Rs.5 lakh per draw for Bumper and Rs.10,000 per draw for other categories, would be promptly dismissed. In light of the Expression of Interest (EOI), a total of five bids were tendered, out of which four were deemed eligible due to their identical quotation of Rs. 10,000. In accordance with the state’s request, the chosen bidders were obligated to provide a security deposit amount.
Complainant No. 4 lodged a complaint with the Competition Commission of India (CCI) invoking Sections 3 and 4 in conjunction with Section 19(1)(a) of the Competition Act. Respondent No. 4 alleged that the bidders colluded and entered into an agreement that had a substantial negative impact on competition within the Mizoram lottery sector.
The Director General (DG) of the Competition Commission of India (CCI) uncovered initial evidence suggesting the presence of cartelization and significant manipulation by the bidding corporations. Nevertheless, the DG made the decision to retract the legal action against the State. In response to the objections raised by the Competition Commission of India (CCI), the government of Mizoram took action by initiating a legal process through the filing of a writ petition in the High Court.
Accusations of bidder cartelization and collusion have been levied. The state of Mizoram has been accused of using its dominant position as the administrator of state lotteries through the imposition of exorbitant financial requirements in the form of security deposits and advance payments.
Decision: In regard to anti-competitive behaviours within the lottery sector, such as bid-rigging during the tendering procedures for the selection of selling agents and distributors, The High Court has granted a stay on the final orders of the Competition Commission of India (CCI) till the appeal process is concluded. The Supreme Court acknowledged that the Competition Commission of India (CCI) possesses jurisdiction, despite lotteries being regulated at the state level. In the event that the Competition Commission of India (CCI) harbours suspicions regarding bid rigging practices in the process of selecting lottery-selling agents and distributors, it may commence an investigation.
2. Google Inc. & Ors v. Competition Commission of India, Competition Appeal (AT) No.01 of 2023
Facts: Google LLC and Google India Private Limited basically challenged the order passed by the CCI for the abuse of its dominant position in contravention of Section 4 of the Competition Act. CCI had imposed the imposition of Rs. 1337.76 Crores as a penalty on Google. The Competition Commission of India (CCI) noted that Google’s dominant position in the online search market was being used to prevent competing search engines from accessing the market.
Decision: Google Filed an Appeal to NCLAT against the order of the CCI and NCLAT upheld the decision of imposition of penalty by CCI
3. Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors, 2015 CCI 7
Facts: Mohit Manglani has challenged Flipkart, Jasper Infotech, Xerion Retail, and Amazon Vector E-commerce (collectively the “Opposing Parties”) in the Indian e-commerce market. The complainant asserted that the defendants violated the Competition Act of 2002 by engaging in exclusive selling and distribution agreements with product and service manufacturers. In addition, he argued that the parties possessed a product-specific monopoly due to their exclusive contracts, meaning that they dominated the market in every manner for the products that were only available through their websites.
Is it against the law to make exclusive arrangements for the purchase and selling of goods through cyberspace?
Decision: The Commission determined that the digital distribution channels of the OPs allow consumers to compare shops by comparing prices and features. Additionally, it allows them to schedule their own delivery time. The industry-wide adoption of AAEC (Appreciable Adverse Effect on Competition) does not appear to be the consequence of an exclusive agreement between manufacturers and e-portals.
“It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints,” CCI noted.
4. XYZ (Confidential) v. Alphabet Inc, Case No. 07 of 2020
Facts: The Competition Commission of India has found Google to be in violation of several provisions of the Competition Act, 2002. These violations include the following:
Google’s imposition of the Google Play Billing System (GPBS) as a mandatory requirement for paid apps and in-app purchases has been deemed to contravene Section 4(2)(a)(i) of the Act due to the imposition of an unjust condition on app creators.
Google was found to be in violation of Sections 4(2)(a)(i) and 4(2)(a)(ii) of the Competition Act due to its failure to utilise GPBS for its own services, such as YouTube, thereby engaging in discriminatory practices. This practise involves the imposition of biased conditions and pricing on ancillary applications that are crucial for the functioning of the system.
Based on the provisions outlined in Section 4(2)(b)(ii) of the Act, it can be argued that Google violated the law by imposing a requirement to utilise the Google Play Billing System. This action hindered the capacity of payment processors and app developers to engage in innovative practises and technical advancements within the market for in-app payment processing services. Furthermore, it diminished the motivation for further innovation in this domain.
The denial of market access to payment aggregators and app developers can be attributed to Google’s compulsory deployment of GPBS, which is in violation of Section 4(2)(c) of the Act.
Google’s actions have been found to be in violation of Section 4(2)(e) of the Act. This violation derives from Google’s utilisation of its dominant market position in licensable mobile operating systems and app stores for Android to safeguard its standing in the downstream markets.
Google’s utilisation of a distinct method to integrate its UPI application with the Play Store, as opposed to its competitors’ UPI applications, resulted in a breach of Sections 4(2)(a)(ii), 4(2)(c), and 4(2)(e) of the Act.
Whether Google was guilty of the alleged non-compliance and liable for a fine.
Decision: The CCI pointed out that section 4 of the Competition Act clearly forbids things like putting in place unfair conditions, denying market access, using pressure, putting in place extra requirements, etc. The CCI said that Google can’t say it didn’t have an anti-competitive goal because it set unfair standards and did other things that broke Section 4 of the Act. It is the responsibility of the dominant companies to make sure that the Act is followed. So, the court didn’t think Google’s case was valid and threw it out.
Google also broke Section 4 of the Act, so the CCI fined the company Rs. 936.44 crores and gave the company 60 days to pay the fine. Also, the CCI told Google to stop doing things that hurt competition and are against Section 4 of the Act.
5. Together We Fight Society v. Apple Inc., Case No. 24 of 2021
Facts: A non-government organisation called “Together We Fight Society” (TWFS) said that Apple uses anti-competitive restraints and abusive dominant practises in the markets for app distribution to smartphone and tablet users and for processing consumer payments for digital content made specifically for iOS mobile apps (called “in-app content”). The tip said that Apple stops software makers from reaching iPhone and iPad users outside of the “App Store,” which the tipper said to be under Apple’s control. Apple also required developers to use its in-app payment method, In-App Purchase (IAP), which had a 30 percent fee, which was 10 times higher than open market rates, in order to sell digital in-app material to customers.
The Informant said that the company’s monopolistic pricing and other practises that limit competition was an abuse of power that was against Section 4 of the Act. According to the source, Apple also has a tight grip on the Indian app store market for smartphones that run iOS and the market for mobile operating systems that don’t require a licence.
iOS devices can only be used with apps from Apple’s App Store. iOS app makers only have one way to sell their apps: through the App Store. People started saying that Apple controlled the whole market for distributing iOS apps because of this. The source said that Apple doesn’t let iOS users download app stores or apps directly from websites, that the App Store comes pre-installed on every iOS device it sells, that users can’t get rid of the App Store, and that all app developers have to agree that their apps will only be sold through the App Store.
Apple required app developers to use Apple’s in-app payment solution when selling digital content to customers inside an app. This limited the payment handling systems that app developers could use. This was especially bad because Apple charged a 30 percent fee for processing payments, while other payment handling services charged much lower fees.
Decision: The Competition Commission of India said that Apple has a monopoly in the Indian market for app stores for iOS because its App Store is the only way for app makers to reach customers with apps that are optimised for Apple’s smart mobile devices that run on Apple’s smart mobile operating system iOS. Then, Apple requires app developers who want to sell digital in-app content to their customers to use Apple’s in-app payment solution, called In-App Purchase (IAP).
This limits app developers’ ability to choose a payment processing system of their own, especially since Apple takes a 30 percent cut of payments while other payment processing solutions take a much smaller cut. Apple also forbids app developers from using third-party payment processing systems. The Commission found that there was a good reason to look into whether Apple broke sections 4(2)a), 4(2)b), 4(2)c), 4(2)d), and 4(2)e) of the Act. Because of this, CCI told the Director-General to do a probe under section 26(1).
6. Rohit Arora v. Zomato (P.) Ltd., Case No. 54 of 2020
Facts: A complaint was lodged under Section 19(1)(a) of the Competition Act, 2002 (Act) against Zomato Private Limited (OP) for purported infringements of Sections 3(4) and 4 of the Act in the case of Mr Rohit Arora v. Zomato Private Limited (now Zomato Limited). The individual providing information asserts that they have been an active user of the Zomato platform for an extended period of time, having consistently placed several orders through the service starting from the year 2018.
As per the informant, Zomato leveraged its dominant market position in the meal delivery industry to implement price hikes and impose delivery costs that were deemed inequitable, discriminatory, and excessively high on its clients. Additionally, there have been allegations that Zomato implemented measures to restrict restaurants from independently delivering their own food, as well as selectively allocating delivery executives to preferred restaurants while neglecting others. The informant provided three instances as evidence to support the complaint.
Initially, Zomato rescinded the order, citing the inability to fulfil the delivery due to your absence at the designated location for meal retrieval, coupled with the unavailability of contact via your provided phone number. Following an examination of the circumstances surrounding the restaurant’s handling of the user’s order and subsequent denial of a refund, the informant conducted additional research and uncovered that, in accordance with Term XIII outlined in the Terms of Service of the OP’s app, Zomato possesses the legal authority to impose liquidated damages, the specific amount of which is determined at the discretion of Zomato.
The assertion was made that the original poster’s abusive conduct encompassed the implementation of a capricious policy for cancellations. The second occurrence pertained to a situation of food leakage, and Zomato’s corresponding reaction was to assert that Zomato Valet had successfully executed the delivery of all his orders without any complications throughout the preceding week, thereby attaining an impeccable 5-star rating. We will provide him with positive feedback and presume that this occurrence was an isolated event on his part. The Informant perceived Zomato’s actions as an exploitation of its dominant market position.
The third instance entailed the inability to obtain a reimbursement subsequent to the cancellation of an order. Due to the initiation of the cooking process by the restaurant, Zomato solely provided a partial reimbursement amounting to fifty percent of the total order cost. The Informant presented a case asserting that Zomato’s cancellation policy was unjust, employing a comparative analysis with similar platforms such as Swiggy, Talabat.com, Deliveroo, Food Panda, and others.
Zomato’s immediate response to the first incident involved clarifying that the customer had placed an order through their platform and subsequently contacted the delivery partner directly, requesting communication via a landline instead of the registered cell number. The customer care employees at Zomato ensure that any instructions received through the app are effectively communicated to the delivery partner. Given that the delivery partner had already invested time, resources, and finances in collecting and conveying the order, it would have been inequitable for Zomato to provide the Informant with a complete reimbursement in light of the prevailing circumstances, whereby the instructions were promptly relayed to the delivery partner.
Decision: Based on the ruling of the CCI (Competition Commission of India), Zomato made efforts to refute the three reported instances of abuse presented by the Informant by providing evidence from the record. The Informant did not counter this evidence on its substantive merits. Consequently, the Commission determined that Zomato was not found to have engaged in any abusive conduct.
Notwithstanding Zomato’s objections, the Commission observed the presence of two discrete markets under consideration: the market for online meal ordering services rendered by food aggregator applications in India, and the market for food delivery services in India. The Commission has concluded that there is inadequate evidence to establish a preliminary case of a breach of the Act by the OP and has consequently issued an order for the immediate closure of the Information in accordance with Section 26(2) of the Act.
7. Dushyant v. National Accreditation Board for Testing and Calibration Laboratories (NABL), Case No. 48 of 2021
Facts: The individual referred to as the “Informant” in this particular case, Mr. Dushyant, submitted an application under Section 19(1)(a) of the Competition Act, 2002 (hereafter referred to as the “Act”). The application alleged that the National Accreditation Board for Testing and Calibration Laboratories (referred to as “NABL”) and other Government Departments/Affiliates had contravened Sections 3 and 4 of the Act.
As per the source, the National Accreditation Board for Laboratories (NABL) has entered into Exclusive Service Agreements (ESAs) with other Operating Parties (OPs), which restrict them from engaging any accrediting service apart from NABLs. All bidders/suppliers that are recommended must exclusively utilise NABL and its accredited laboratories for their accreditation requirements. The complainant alleged a violation of Section 3 (4) of the Act on the grounds that the presence of other certification agencies in India constituted a breach. As per the informant’s account, this technique ultimately resulted in a limitation of market access as it facilitated NABL’s consolidation of its dominant position within the industry and suppressed competition. According to the whistleblower, there were alleged violations of Sections 4(2)(a) and 4(2)(c) of the Act.
Whether there was a violation of provisions of sections 3 and 4 by OPs or not?
Decision: As per the findings of the CCI, the Informant failed to provide substantiating evidence on the existence of an exclusive agreement between NABL and OPs that would confer advantages solely to NABL. Hence, the Competition Commission of India (CCI) currently does not have any suspicions regarding any entities engaging in any violations of Section 3(4) of the Act. The Competition Commission of India (CCI) determined that there was no violation of section 4 of the Act, as the Informant failed to provide substantiating data regarding the market share or dominance of any of the concerned entities in support of their claims.
There was a lack of evidence suggesting that the National Accreditation Board for Laboratories (NABL) had any involvement in the development of policies, guidelines, procurement regulations, or governing legislation that were relied upon by the organisations seeking accreditation. Moreover, it should be noted that original posters (OPs) possess the authority to establish procurement regulations, and such actions should not be automatically perceived as intrinsically detrimental to competition.
There is a lack of information indicating other suppliers, aside from the present OPs, are also implementing the same terms. Consequently, the presence of alternative accrediting bodies does not pose a threat to competition. The Competition Commission of India (CCI) determined that the alleged offenders who instigated the probe failed to establish a “prima facie case” of contravening Section 3 and/or Section 4 of the aforementioned legislation. Consequently, a mandate was issued to promptly conclude the case.
8. Thupili Raveendra Babu v. CCI, Competition Appeal (AT) No.09/2021
Facts: In this case, the petitioner was an executive engineer in the Central Public Works Department (CPWD) of the Ministry of Urban Development for the Government of India. He desired a voluntary retirement so that he could study law. The petitioner asserts that the Bar Council of India (BCI) regulates the legal education and training standards in India. It has a monopoly on regulating the Indian legal system and is the dominant force in legal education.
The petitioner asserted that candidates in the general category who have attained the age of 30 or more were disqualified from pursuing a legal education in accordance with Clause 28 of Schedule III, Rule 11 to Part IV – Rules of Legal Education, 2008, which is part of the BCI Rules enacted pursuant to the Advocates Act of 1961. The allegedly stringent age restrictions of the BCI create an indirect barrier to entrance for younger competitors.
The BCI violated Section 4 of the Competition Act of 2002 by “misusing its dominant position” when it inserted contested clause 28. Additionally, the BCI had engaged in dubious authority abuse.
In turn, the petitioner had requested that the Commission determine that the BCI had violated Section 4 and engaged in an impermissible exercise of discretion in issuing the challenged Clause 28. Additionally, the petitioner requested a stay of the challenged clause 28 under Section 33. The CCI determined that there was no prima facie case under Section 4, so it ordered the information to be promptly closed in accordance with Section 26(2) of the Act. Therefore, the dissatisfied petitioner chose to file an appeal with the NCLAT.
The Bar Council of India fulfills its primary function as a Statutory Body, according to the NCLAT. Thus, the Bar Council of India does not engage in any economic or commercial activity and cannot be considered an “enterprise”. The NCLAT ruled that the BCI is concerned with training individuals who aspire to be solicitors to high standards and providing them with the necessary resources.
The Determination made by the Supreme Court of India pertained to the classification of the Bar Council of India as a non-enterprise under Section 2(h) of the Companies Act 2013. This classification was based on the fact that the Bar Council of India is a statutory body established under Section 4 of the Advocates Act, 1961. Furthermore, the Bar Council of India possesses the exclusive authority to formulate rules and regulations pertaining to legal education standards.
Decision: In the contested order, the Supreme Court upheld the NCLAT’s ruling. The petitioner then submitted the present petition to appeal the contested ruling. According to Section 4 of the Advocates Act and as determined by the Supreme Court of India, the Bar Council of India is a statutory body. It has the sole authority to establish standards for the integrity of legal education. Since this was not an “enterprise” as defined by Section 2(h) of the 2002 Competition Act, there was no violation. In addition, the Supreme Court determined that the challenged order contained no obvious defects that warranted a rehearing. Consequently, the urgent petition for review was to be denied.
9. Digital News Publishers Association v. Alphabet Inc, Case No. 41 of 2021
Facts: The present case pertains to a complaint lodged under Section 19(1)(a) of the Competition Act, 2002 against Alphabet Inc., Google LLC, Google India Private Limited, and Google Ireland Limited (cc) by the Digital News Publishers Association. This association is a Section 8 Company established with the objective of promoting, supporting, facilitating, fostering, safeguarding, and advancing the interests of digital news publishers.
Given Google’s recent announcement to discontinue compensation for digital news publishers for snippets displayed in search engines and its requirement for publishers to create mirror sites in the Accelerated Mobile Pages (AMP) format, allowing Google to cache articles and deliver content directly to mobile devices, DG has been directed to commence an investigation into Google’s business practises.
Decision: Google is the most prominent online search engine, with more than half of all visits to news websites originating there. Although Google allowed website links belonging to Informant members to appear in search engine results, the Informant claimed that Google placed unfair restrictions on them in some manner, either directly or indirectly.
The Informant asserted that Google abused its dominant position to impose unfair and arbitrary conditions on its members in violation of Section 4(2)(a)(i) because the members of the Informant were not informed of or given any information regarding the amount of revenue earned by Google by providing advertisements on the websites/links of the Informant. Google arbitrarily allows a small portion of its profits to Informant’s contributors. The news organisations retained a smaller proportion of the proceeds.
The source also claimed that Google’s unfair practices affect consumers and the journalism industry by discouraging reporters and editors from putting forth the effort required to produce high-quality journalism when they are compensated with a smaller portion of the revenue. The source added that despite Google’s lack of original news production, the company has expanded its presence in the news industry by leveraging its dominant position in related areas. It was argued that Google not only has a monopoly in search in India but also has a very strong position in advertising intermediation and controls the majority share at each level. According to the source, Google abused its dominant position in every possible manner.
The Informant is unable to negotiate the membership terms and must accept them as it is. The complainant requested that the Commission investigate Google’s actions for a possible violation of Section 4 of the Act pursuant to Section 26(1) of the Act. The Commission estimated Google’s proportion of the mobile search engine market to be between 98% and 99% from April 2019 through July 2021.
In determining Google’s market dominance, the Commission took into account not only market share data but also the Informant’s extensive comments on Section 19(4) additional considerations. In light of the foregoing, the Commission has determined that further investigation is warranted into allegations that Google violated Section 4(2)(a) of the Act. The Commission noted that if the DG conducted an investigation, all parties would have an equal opportunity to present their side of the story. Accordingly, the DG was instructed to investigate the allegations in accordance with Section 26(1) of the Act.
10. JSW Paints (P.) Ltd. v. Asian Paints Ltd., Case No. 36 of 2019
Facts: The informant accused the paint manufacturer, referred to as “OP,” of violating sections 3 and 4 by imposing an exclusive supply agreement and preventing paint dealers from selling the informant’s paint. However, there was a lack of concrete evidence to support these allegations, and as a result, no case of contravention of sections 3 and 4 could be established.
Decision: The Competition Commission of India (CCI), relying on the conclusions drawn by the Director General (DG), determined that there should be compelling evidence, establishing a high likelihood, that a dominant and well-established market player is employing strategies to eliminate a smaller competitor or a new entrant from the market. This applies irrespective of the smaller player’s size or inherent competitive advantages. These strategies may involve inducing or pressuring downstream entities to refrain from engaging with or supporting the new entrants.
Contributions from: Sanjoli Verma And Apurva Neel