Month: November 2013

3rd BRICS International Competition Conference 2013 [Coverage]

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There was a lot of media coverage of the B.R.I.C.S. International Competition Conference, 2013. And instead of going into lengthy and repetitive details, posted below are the links on all the major coverage of the Conference:

 

P.M. to Inaugurate BRICS Conference Tomorrow

Break the Bureaucratic Shackles from PSU’s, Says P.M.

India Calls for Global Cooperation Among Anti-trust Regulators

Competitive Markets Resilient to Economic Uncertainties: Pilot

C.C.I. to Ink Pact with E.U. Regulator this Week

BRICS Competition Authorities Sign Accord

Inaugural Address by Dr. Manmohan Singh, Hon’ble Prime Minister of India

Keynote Address by Mr. Sachin Pilot, Hon’ble Minister of State (Independent Charge) of Corporate Affairs

Welcome Address by Mr. Ashok Chawla, C.C.I. Chairperson 

 

 

 

 

Brief Notes – II

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Continuing with my comments on contemporary competition case law, on the agenda today is the decision of the Competition Appellate Tribunal in M/s. United Phosphorous Limited and Others v. Competition Commission of India & Others. The decision is well known and has been already debated upon a lot and frankly, I have nothing new to contribute. The C.C.I. will probably file an Appeal in the Supreme Court against the decision. It is an open debate as of today. However, if a wager was in order, the odds are that the concept of “Relevant Turnover” for the calculation of penalty is probably here to stay under Indian Competition Law. But what is frustrating is that the Competition Act just does not help to reach a solution. In fact, truth be told, the C.O.M.P.A.T. has reached it’s conclusion more on the basis of international precedents rather than actual application and interpretation of Indian law. This is not surprising. To quote Section 2(y) of the Act:

“turnover” includes value of sale of goods or services;

Ambiguous and exceedingly broad, to say the least. Furthermore, since Section 2(z) of the Act allows for borrowing definitions from the Companies Act, 1956, then one may try to derive an interpretation through the definition of “Turnover” as given under Section 43A of the same:

“turnover” of a company, means the aggregate value of the realisation made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;

But not only can this definition not be taken in light of Section 2(y), but also, Section 43A lends the definition on a different context to that of the issue in the case.

Two observations of the Tribunal do deserve a mention. Firstly, the C.O.M.P.A.T. has affirmed and now firmly established that mere price parallelism alone cannot be enough for drawing an inference of cartelisation. Secondly, it has differentiated between the terms of “Restricted Turnover” (as used by it in MDD Medical Systems India Pvt. Ltd. v. Foundation for Common Cause & Ors.; Appeal No. 93 of 2012) and “Relevant Turnover” as delivered in this Order – the discussion can be found on page 48 of the Order.

Brief Notes

I have been falling behind in case law readings in recent weeks, which is why a number of posts are presently saved as half finished drafts on the Dashboard of the Blog. Nevertheless, while trying to finish the backlog, I recently had the opportunity to sift through the recent Orders of the Commission. Two of them stand out and thus deserve a special mention.:

The first is that of Mr. Larry Lee Mccallister v. M/s Pangea3 Legal Database Systems Pvt. Ltd., mostly for the reason that as far as can be recalled, this is the first time the Commission has dealt with Non-Compete clauses under the Competition Act. The reasoning seems to be sound on the facts and circumstances of the case as the matter was more about the personal grievances of a particular individual rather than that of anti-competitive or consumer harm. Personally, am waiting for the day when the C.C.I. has to deal with a Telefonica like situation in the context of cooperative joint ventures or M & A transactions.

For those who are not aware about the above mentioned case, in 2010, Telefonica acquired sole control of the Brazilian mobile operator, Vivo, which was previously jointly owned by Telefonica and Portugal Telecom. In the context of this transaction, the parties inserted a clause in the purchase agreement indicating that Telefonica and Portugal Telecom would not compete with each other in Spain and Portugal as between the end of September 2010 and the end of 2011. The European Commission opened an investigation in January 2011, and the parties terminated the non-compete agreement in early February 2011. The European Commission held that, by virtue of the non-compete agreement, Telefonica and Portugal Telecom had deliberately agreed to stay out of each other’s home market. The European Commission considered that this preserved the status quo in Spain and Portugal, which hindered the integration process of the E.U. telecom sector and prevented the parties from competing with each other for offering clients the most advantageous conditions. Despite the short duration of the infringement, which was only 4 months, the European Commission fined Telefonica €66,894,000 and Portugal Telecom €12,290,000.

The second one is Shubham Srivastava v. Department of Industrial Policy & Promotion (D.I.P.P.)/Supplementary Order , which deserves to be added in the growing list of Orders of the Commission on determining the scope of the definition of the term “Enterprise” under Section 2(h) of the Act. In the Order, while dismissing the Information, the C.C.I. has held that D.I.P.P., under the Ministry of Commerce and Industry, would fall under the definition of “Enterprise” under the Act.

Hope this satisfies readers for now. More (finally) finished posts to follow in the next few days. 🙂

International Conference on Competition Regulation, Competition and Competitiveness: Implications for Indian Businesses

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“Indian Institute of Management (IIM) Kashipur, India is orgnising an International Conference on Competition Regulation, Competition and Competitiveness: Implications for Indian Businesses on November 20, 2013 at Hotel Eros , Nehru Place, New Delhi, India.

The conference is being organized by the Centre of Excellence on Competitiveness (“CoE”), IIM Kashipur, India in association with Corporate Knowledge Foundation (CKF) and AZB Partners as Knowledge Partner.

The objective of the conference is to build and provide a global networking and interaction platform to understand and examine recent developments and prospects of competition regulation to influence corporate strategy and operating practices of businesses and identify the actionable agenda for companies, market participants and policy makers.”

For more details, see here.

3rd Biennial International Conference on “Competition Reforms:Emerging Challenges in a Globalising World”

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“One of the key initiatives that CUTS and CUTS Institute for Regulation and Competition (CIRC) have taken in last few years is to provide a platform to deliberate and discuss key economic and governance challenges to competition and economic regulation at an international level and had organized two previous conferences in New Delhi, India.

The idea for this biennial series was conceived in the backdrop of developing countries concerns of frequent regulatory failures that undermine the capacity to achieve policies important to citizens and consumers. Such failures are due to persistent and common patterns of over-regulation, under-regulation, poorly designed regulation and implementation, and weak institutional capacities.”

Date: November 18-19, 2013, New Delhi

For further details, click here.

Also, a reminder for the upcoming 3rd B.R.I.C.S. International Competition Conference, 2013, though personally think it’s sad that the attendance for the conference is strictly by invitation. 😦

The E – Retailer War Has Reached India.

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A recent Economic Times article reported how a number of “small brick-and-mortar retailers have banded together to seek protection from e-commerce companies, which they say are undercutting them with predatory pricing. The retailers, mostly from Bangalore – home base for Flipkart, India’s largest e-tailer – have written to the Competition Commission of India, complaining that their online counterparts are selling goods below cost and skirting Indian laws on foreign direct investment in retail.”

This is not surprising and frankly, it was only a matter of time. In fact, in one of our previous posts, we focused on the Department of Justice (DoJ) complaint filed against the five publishers (Hachette, Penguin, Simon and Schuster, Macmillan and Harper Collins) alleging their agreement with Apple to be anti-competitive. 

My personal opinion is that this is part of the Schumpeterian Cycle of “Creative Destruction”, and this struggle is inevitable. To be honest, in the larger scheme of the economic world, this disputes is trivial, as instances of such disputes abound in economic history.