The case of N. Sanjeev Rao v. Andhra Pradesh Hire Purchase Association, Case No. 49/2012, which was recently dismissed by the Commission, highlights two important developments which are a must in Indian competition jurisprudence.:

1.  It is necessary that the Parliament pass the Competition Amendment Bill, 2012 (see here and here for our previous posts on the same) at the earliest to recognise the concept of collective dominance under the Competition Act. Personally, I am of the opinion that too many genuine cases are getting dismissed due to this wide lacuna within the Act.

2. The Commission should apply a certain amount of pragmatism while deciding the relevant market in a particular case. For example, in this case, it is obvious that the market should have been, as submitted by the informants, “private auto financiers market in the cities of Hyderabad and Secunderabad, Andhra Pradesh.” The decision of the CCI that there was no case to differentiate private auto financers and other banking/non-banking entities which are in the business of extending automobile finance is clearly erroneous in light of practical realities. It is a well known fact that autowallahs would never qualify for an automobile loan with any decent bank, which is the exact reason why they need to resort to such financers in the first place, thus creating a clear distinction between the two different financial markets.