KEY M&A MATTERS
- CCI imposes penalties on SABIC for gun-jumping
OTHER KEY DEVELOPMENTS
- The Competition (Amendment) Bill, 2022, proposing significant amendments to the Competition Act, 2002, was introduced in the Lok Sabha (Parliament) in August 2022.
- The CCI published a market study on competition and regulatory issues in the taxi and cab aggregator industry with a focus on surge pricing.
KEY ENFORCEMENT MATTERS
- CCI closes allegations of bid-rigging in appointment of lottery agents
- Delhi HC dismisses appeals by WhatsApp and Facebook against the Single Judge's order, refusing to set aside CCI's order
- Gujarat HC & Karnataka HC dismiss writs filed against CCI orders initiating investigations
- Delhi HC reiterates jurisdiction of the CCI in cases relating to the Patents Act
- Bombay HC dismisses writs filed by media companies against CCI's order
A QUICK SNAPSHOT
Enforcement Matters
Mergers & Acquisitions
ENFORCEMENT ACTION
#1 CCI closes case alleging bid-rigging in the appointment of lottery agents by the State of Mizoram
- On September 15, 2022, the Competition Commission of India (CCI) closed an investigation into allegations of bid-rigging in the appointment of lottery agents by the Government of Mizoram (GoM).
- The information, filed by Tamarai Technologies Private Limited, alleged that the four opposite parties had colluded in responding to an expression of interest issued by the GoM by quoting an identical rate of INR 10,000 per draw. The CCI while directing the DG to investigate did note that the GoM was discharging functions relating to regulation of lotteries and was not an 'enterprise' under the Competition Act, 2002 (Act).
- The Director General (DG) found a contravention of Section 3(3) of the Act, noting that the opposite parties had renegotiated prices of the bids to be submitied and had engaged in prior consultations. At this stage, two of the opposite parties and the GoM filed writ petitions before the Gauhati High Court (Gauhati HC) challenging the order directing investigation, the DG report as well as the CCI's order forwarding the DG report to the parties. The Gauhati HC noted that the lottery business falls under the doctrine of res extra commercium and would not be covered under the Act and proceeded to quash the DG report and set aside the CCI orders. On appeal, the Hon'ble Supreme Court (SC) noted that anti-competitive aspects, even in the tendering process with respect to State managed lotteries, can be inquired into under the Act and proceeded to set aside the judgment of the Gauhati HC.
- The CCI then considered the DG report along with the arguments of the parties and noted that the prices quoted by the opposite parties were identical since they were in line with the applicable rules. The CCI also did not find any evidence of restriction of competition in the bidding process. In the absence of sufficient evidence, the CCI disagreed with the DG's findings and closed the case.
The CCI's order can be accessed here.
#2 Delhi High Court dismisses appeals filed by WhatsApp and Facebook challenging the CCI's order of investigation into WhatsApp's 2021 Policy update
On August 25, 2022, the Delhi High Court (Delhi HC) dismissed two appeals filed against an order passed by a Single Judge of the same court, which had refused to set aside CCI's order directing an investigation into WhatsApp's 2021 terms of service and privacy policy update (2021 Update). The writs challenging the CCI's order were filed by WhatsApp and Facebook (Appellants).
The CCI, in its order directing investigation, had observed that WhatsApp being a dominant player in the relevant market for OTT messaging apps through smartphones in India may have abused its dominant position by formulating overarching terms and conditions in the new policy and only giving a 'take-it-or-leave-it' option to the users.
The Appellants argued that the 2021 Update has already been challenged before the Hon'ble SC and is under adjudication. Therefore, it was argued that the CCI cannot initiate a separate investigation as it may lead to conflicting outcomes from different forums. It was also alleged that the CCI has not recorded sufficient reasons to form a prima facie opinion.
The Delhi HC observed that:
The appeals were accordingly dismissed, and the order passed by the single judge of the Delhi HC were upheld. This implies that the CCI can continue its investigation against WhatsApp.
The decision of the Delhi HC can be accessed here.
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