CCI approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited (CCI Press Release 10th March 2022)

The Competition Commission of India (CCI) approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited

The proposed combination pertains to the proposed acquisition of Seventy-Six percent of the equity shares of Prione Business Services Private Limited (Target)by Amazon Asia-Pacific Resources Private Limited (Acquirer).

Acquirer is an indirect wholly owned subsidiary of Amazon.com, Inc. (ACI). ACI is the ultimate parent entity of the Amazon group. The Acquirer does not undertake any business activity in India. However, ACI, the ultimate parent company of the Acquirer, has certain indirect subsidiaries either registered in India or having business operations in India.

Target is an Indian owned and controlled company, and is controlled by Hober Mallow Trust (Hober Mallow). Seventy Six percent of the share capital of the Target is held by Hober Mallow. Acquirer already owns Twenty three percent of the share capital of the Target, and Amazon Eurasia Holdings S.a.r.l. owns One percent of the share capital of the Target. The Target offers a variety of services tailored to help small and medium businesses (“SMBs”) run their online businesses efficiently, inter alia, including digital cataloguing, advertising, training and consulting, advisory and value-added services, adopting digital payments, and other overall enablement services.

Target has a wholly owned subsidiary Cloudtail India Private Limited (CT). CT is engaged in B2C retail business in India, and currently offers for sale products to customers on the online marketplace, http://www.amazon.in operated by Amazon Seller Services Private Limited (Amazon Marketplace). CT is also engaged in wholesale (B2B) trading of products through online and offline channels.

Detailed order of the CCI will follow.

CCI organises 7th Edition of National Conference on Economics of Competition Law

Key discussion :

Emergence of technology giants and the challenges and novel questions it poses for regulation and regulators.

Key technological and economic factors such as, network effects, scale economies, synergies between intangible assets within technology ecosystems etc. that give rise to concentration of market power in digital markets.

Importance of investments in intangible assets such as brands, software, patents etc., financing aspects such as the predominance of venture capital funds and private equity funding.

Outlined the role of economics in unravelling the intricacies of markets, in understanding the state of competition and what aids, abets or hinders it.

The architecture of the Competition Act, 2002 is such that adjudication entails appreciation of the economics of markets and the impugned conduct.

Refer extract of Press release dated 04th March 2022

The Competition Commission of India (CCI) today organized the Seventh National Conference on Economics of Competition Law in virtual mode. Mr Neelkanth Mishra Member, Economic Advisory Council to the Prime Minister, was the Keynote Speaker at the Conference. Mr Ashok Kumar Gupta, Chairperson, CCI, delivered the Special Address at the Inaugural Session and Dr Sangeeta Verma, Member, CCI opened the Conference with her opening remarks. 

The Keynote Address by Mr Neelkanth Mishra focused on the emergence of technology giants and the challenges and novel questions it poses for regulation and regulators. Mr Mishra, in his address, discussed the key technological and economic factors such as, network effects, scale economies, synergies between intangible assets within technology ecosystems etc. that give rise to concentration of market power in digital markets. Elucidating the features and metrics that are relevant in digital markets distinguishing them from traditional markets, he referred to the importance of investments in intangible assets such as brands, software, patents etc., financing aspects such as the predominance of venture capital funds and private equity funding. While technology sectors, owing to their innate features may be susceptible to winner-take-all market structures, they also hold enormous potential to drive innovation, facilitate new business models and help remove inefficiencies in the value chain, he pointed out. The question that merits attention in this context is whether concentration of capital and market power, size and scale of the technology giants, by themselves, be seen as a threat to competition, he said. He concluded by presenting a set of questions for regulators to ponder over so that the regulatory approach remains informed of the complexities of digital markets, entailing deep-rooted assessment, global collaboration and cautious reaction. 

In his Special Address, Mr Ashok Kumar Gupta outlined the role of economics in unravelling the intricacies of markets, in understanding the state of competition and what aids, abets or hinders it. The architecture of the Competition Act, 2002 is such that adjudication entails appreciation of the economics of markets and the impugned conduct, he said. Referring to the growing emphasis placed by the Commission on market studies, Mr Gupta mentioned that the application of this complex economic legislation could only be effective when it appropriately accounted for market specificities. Given the inherently dynamic nature of markets especially the new age markets, the Commission engages proactively with stakeholders through its Market Studies and Stakeholder consultations.  The learnings from these market studies allow the Commission to appreciate various strategic market interactions in oligopolistic markets and going forward the Commission proposes to undertake several market studies for the purpose of enforcement and advocacy, he added.

In her opening remarks, Dr Sangeeta Verma talked about the feedback loop between antitrust research and enforcement. She stressed on the need for the evolving academic discourse and the shifts in economic understanding to reflect in antitrust enforcement. On the other hand, a growing body of antitrust case law with rigorous economic analyses could stimulate follow-on research, she mentioned. For accurate yet speedy investigation and disposal of cases, she said, it was important that parties, both in antitrust and combination matters, made their submissions and arguments giving due regard to the economic framework that applies to the industry concerned.

The Conference Plenary was on ‘Reforms and Deepening of Markets’. Mr Amitabh Kant, Chief Executive Officer, NITI Aayog, Mr Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management, Ministry of Finance, Government of India, Dr M. S. Sahoo, Distinguished Professor, National Law University, Delhi and Dr Nachiket Mor, Visiting Scientist, The Banyan Academy of Leadership in Mental Health and Senior Research Fellow, IIIT Bangalore were the distinguished panellists at the Plenary. The Plenary was moderated by Ms Latha Venkatesh, Executive Editor, CNBC TV18.

The Conference also included two technical sessions on Competition and Regulation: Empirical Inquiries; and Competition Law and Policy: Issues and Approaches, where researchers presented papers on economics of competition law. The technical sessions were chaired by Dr Pami Dua, Director, Delhi School of Economics and Dr Aditya Bhattacharjea, Senior Professor, Delhi School of Economics.

CCI imposes penalty on Tyre manufacturers and their Association for indulging in cartelisation (CCI Press Release dated 02nd Feb 2022)

The CCI imposed penalties of Rs. 425.53 crore on Apollo Tyres, Rs. 622.09 crore on MRF Ltd., Rs. 252.16 crore on CEAT Ltd., Rs. 309.95 crore on JK Tyre and Rs. 178.33 crore on Birla Tyres, besides passing a cease and desist order. In addition, a penalty of Rs. 0.084 crore was also imposed on ATMA.

👉 This case was initiated on the basis of a reference received from the Ministry of Corporate Affairs (MCA) under Section 19(1)(b) of the Act.

👉 Earlier, the said order of the CCI had been kept in sealed cover as per the directions of the Hon’ble Madras High Court, issued in W.A. No. 529 of 2018, preferred by MRF Limited. Thereafter, the Division Bench of the Hon’ble Madras High Court vide an order dated 06.01.2022, dismissed the aforesaid writ appeal.

👉 Aggrieved with the same, the tyre companies preferred SLPs before the Hon’ble Supreme Court, which were dismissed vide its order dated 28.01.2022.

CCI imposes penalty on maritime transport companies for indulging in cartelisation (Lesser penalty approx. INR 24.23 Cr, INR 10.12 Cr, and INR 28.69 Cr) (CCI Press Release 24 Jan 2022)

The Competition Commission of India (‘CCI’) passed a final order against four maritime transport companies namely Nippon Yusen Kabushiki Kaisha (‘NYK Line’), Kawasaki Kisen Kaisha Ltd. (‘K-Line’), Mitsui O.S.K. Lines Ltd. (‘MOL’) and Nissan Motor Car Carrier Company (‘NMCC’) for indulging in cartelisation in the provision of maritime motor vehicle transport services to automobile Original Equipment Manufacturers (OEMs) for various trade routes. Amongst these four companies, NYK Line, MOL and NMCC were lesser penalty applicants before CCI.  

The evaluation of available evidence revealed that there was an agreement between NYK Line, K-Line, MOL and NMCC with the objective of enforcement of “Respect Rule”, which implied avoiding competition with each other and protecting the business of incumbent carrier with the respective OEM. To achieve the said objective, the maritime transport companies resorted to multi-lateral as well as bilateral contacts/ meetings/ e-mails with each other to share commercially sensitive information which, inter alia, included freight rates. They also aimed to preserve their position in the market and maintain or increase prices, including by resisting requests for price reduction from certain OEMs. 

Accordingly, based on a cumulative assessment of the evidence, the Commission held all the four opposite parties, i.e., NYK Line, K-Line, MOL and NMCC, guilty of contravention of the provisions of Section 3 of the Competition Act, 2002 (the Act), which prohibits anti-competitive agreements including cartels, from 2009 to 2012. Further, 14 individuals of NYK Line, 10 individuals of K-Line, 6 individuals of MOL and 3 individuals of NMCC, were also held liable for the anti-competitive conduct of their respective companies, in terms of the provisions of Section 48 of the Act. 

As three companies filed lesser penalty applications, the Commission gave benefit of reduction in penalty by 100% to NYK Line and its individuals, 50% to MOL and its individuals and 30% to NMCC and its individuals. Accordingly, the Commission directed K-Line, MOL and NMCC to pay penalties to the tune of approx. INR 24.23 crores, INR 10.12 crores and INR 28.69 crores respectively, besides passing a cease-and-desist order.

Tribunals/Quasi-Judicial Bodies

In India, Tribunals are a part of the Executive branch of the Government which are assigned with the powers and duties to act in judicial capacity for settlement of disputes. Part XIV of the Constitution of India makes provisions for establishment and functioning of the Tribunals in India. They are quasi-judicial bodies that are less formal, less expensive and enable speedy disposal of cases.

There are tribunals for settling various administrative and tax-related disputes, including Central Administrative Tribunal (CAT), Income Tax Appellate Tribunal (ITAT), National Company Law Tribunal (NCLT), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), National Green Tribunal (NGT) and Securities Appellate Tribunal (SAT), among others. Tribunals were added in the Constitution by Constitution (Forty-second Amendment) Act, 1976 as Part XIV-A, which has only two articles viz. 323-A and 323-B. Article 323A provides that a law made by the parliament may provide for establishment of an Administrative Tribunal for the Union and a separate Administrative Tribunal for each state or two or more states. Article 323 B empowers the parliament or state legislatures to set up tribunals for matters other than those mentioned under Article 323A.

Types of Tribunal in India

1. Debt recovery Tribunal

The Debt Recovery Tribunals have been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. (DRT) was established for expeditious adjudication and recovery of debts due to banks and financial institutions in order to reduce the non-performing assets of the Banks and Financial Institutions. Prior to the introduction of Debt Recovery Tribunal, petitions had to be filed separately for adjudication of cases and execution proceedings in different courts depending upon their jurisdiction. DRT acts as a single judicial forum for adjudication of cases as well as execution of the decrees passed for recovery of debts due to banks and financial institutions under RDDBFI Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

2. National Company law

Tribunal National Company Law Tribunal (NCLT) is a quasi-judicial body exercising equitable jurisdiction, which was earlier being exercised by the High Court or the Central Government. It has been established by the Central government under section 408 of the Companies Act, 2013 with effect from 1st June 2016. The Tribunal has powers to regulate its own procedures. The establishment of the National Company Law Tribunal (NCLT) consolidates the corporate jurisdiction of the following authorities:

i)Company Law Board


ii) Board for Industrial and Financial Reconstruction.

iii) The Appellate Authority for Industrial and Financial Reconstruction

iv) Jurisdiction and powers relating to winding up restructuring and other such provisions, vested in the High Courts.

3. Consumer Forum

To protect the rights of the consumers in India and establish a mechanism for settlement of consumer disputes, a three-tier redressal forum containing District, State and National level consumer forums has been set up. The District Consumer Forum deals with consumer disputes involving a value of upto Rs. 1 crore. State Commission has jurisdiction in consumer disputes having a value of upto Rs.10 crore. The National Commission deals in consumer disputes above Rs.10 crores, in respect of defects in goods and or deficiency in service. It is important to note that consumer courts do not entertain complaints for alleged deficiency in any service that is rendered free of charge or under a contract of personal service.

4. Motor Accident Claims

Tribunal (MACT) The Motor Accidents Claims Tribunal deals with matters related to compensation of motor accidents victims or their next of kin. Victims of motor accident or legal heirs of motor accident victims or a representing Advocate can file claims relating to loss of life/property and injury cases resulting from Motor Accidents. Motor Accident Claims Tribunal are presided over by Judicial Officers from the State Higher Judicial Service and are under direct supervision of the Hon’ble High Court of the respective state.

5. Central Administrative Tribunal (CAT)

Central administrative Tribunal is a multi-member body to hear on cases filed by the staff members alleging non-observation of their terms of service or any other related matters and to pass judgments on those cases. This Tribunal established in pursuance of the amendment of Constitution of India by Articles 323A.

6. National Green Tribunal (NGT)

National Green Tribunal was established for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation of damages to persons and property and for related matters.

7. Income Tax Appellate Tribunal (ITAT)

ITAT is a quasi judicial institution set up in January, 1941 and specializes in dealing with appeals under the Direct Taxes Acts. The orders passed by the ITAT are final, an appeal lies to the High Court only if a substantial question of law arises for determination.

Presently ITAT has 63 Benches at 27 different stations covering almost all the cities having a seat of the High Court

Judicial updates-19th Jan 2022

Judicial updates-19th Jan 2022

CCI directs probe against Google for Abusing its Dominant Position against Publishers

In re Digital News Publishers Association (CCI) dated 07/01/2022

NCLT/NCLAT should not pass ad hoc orders regarding fee and expenses payable to Resolution Professionals

Devarajan Raman Vs Bank of India Limited (Supreme Court of India) dated 05/01/2022

NCLAT Stays Order Initiating CIRP as parties entered Settlement Agreement

Vinayak K Deshpande Vs Nexo Industries P Ltd (NCLAT Chennai) dated 04/01/2022

SC Restores Limitation Extension & excludes Period From 15.03.2020 to 28.02.2022 From Limitation

In Re Cognizance For Extension of Limitation (Supreme Court of India) dated 10/01/2022

Section 45 PMLA Act Gets Triggered while Considering Anticipatory Bail Plea

Asst. Director Enforcement Directorate Vs Dr. V.C. Mohan (Supreme Court of India) dated 04/01/2022

Builder obliged to provide occupancy certificate to flat owners & Failure amount to deficiency in service

Samruddhi Co-operative Housing Society Ltd. Vs Mumbai Mahalaxmi Construction Pvt. Ltd. (Supreme Court of India) -11/01/2022

Comments made during Mediation or Settlement Proceedings cannot be relied by Courts

Arjab Jena@ Arjab Kumar Jena Vs. Utsa Jena @ Pattnaik (Supreme Court of India) dated 05/01/2022

Nobody has a fundamental right to a public holiday

Kishnabhai Nathubhai Ghutia Vs Administrator Union Territory (Bombay High Court) dated 05/01/2022

God cannot be summoned by Court for inspection or verification

S.P. Eswaramurthy Vs Government of Tamil nadu (Madras High Court) dated 06/01/2022

Employees refusing regular promotion offer disentitled to financial upgradation benefits

Union of India Vs Manju Arora (Supreme Court of India) dated 03/01/2022

Legal updates

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Ola has not abused its dominant position and not entered into anti-Competitive agreements in violation of the provisions of the Competition Act, 2002 (NCLAT order)

The NCLAT judgment dated 07th Jan 2022 in Meru Travels Solutions Pvt. Ltd. v. CCI refused to set aside the order passed by the Competition Commission of India in 2017 and held that Ola has not abused its dominant position and that it has not entered into anti-Competitive agreements in violation of the provisions of the Competition Act, 2002.

The Appellants were informants before the CCI and contended before the Commission that Ola has abused its dominant position by predatory pricing and by entering into anti-competitive agreements with its drivers. Since the Commission prima facie found the allegation of abuse of dominant position to be true, it ordered the Director General (DG) to investigate the matter as per the terms of Section 26(1). Based on the investigation report, it was concluded that Ola did not in fact abuse its dominant position and was not in violation of Section 3 and 4 of the Act.

The Appellants are Fast Track Call Cab Pvt. Ltd. and Meru Travel Solutions Pvt. Ltd., who provided radio taxi services to customers from point-to-point movement in the geographical market of Bengaluru.

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Judgement copy:

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CCI Order u/s 43A, 44 & 45 of the Competition Act, 2002 in the case of Amazon.com NV Investment Holding LLC-(Penalty imposed u/s 43A- 200 Cr. , u/s 44 -1 Cr. , u/s 45- 1 Cr)

CCI Order u/s 43A, 44 & 45 of the Competition Act, 2002 in the case of Amazon.com NV Investment Holding LLC-(Penalty imposed u/s 43A- 200 Cr. , u/s 44 -1 Cr. , u/s 45- 1 Cr)

In terms of Section 43A of the Act, if any person or enterprise fails to give notice under sub-section (2) of Section 6 of the Act, the Commission shall impose on such person or enterprise a penalty which may extend to one percent of the total turnover or the assets, whichever is higher, of such a combination. In case of a contravention under Sections 44 and 45 of the Act, each of the said provision renders the contravening person liable, inter alia, to a penalty, as provided therein. Though the penalty under Sections 43A, 44 and 45 of the Act can be to the extent mentioned therein, the Commission has sufficient discretion to consider the conduct of the parties and the circumstances of the case to arrive at an appropriate amount of penalty.

All the contraventions arise from a deliberate design on the part of Amazon to suppress the actual scope and purpose of the Combination, and the Commission finds no mitigating factor. Resultantly, the Commission considers it appropriate to levy the maximum penalty of INR One Crore each under the provisions of Section 44 and Section 45 of Act. Accordingly, Amazon is directed to pay a penalty of INR Two Crore.

As regards failure to notify combination in terms of the obligation cast under Section 6(2) of the Act, Section 43A of the Act enables the Commission to impose a penalty, which may extend to one percent of the total turnover or the assets, whichever is higher, of such a combination. Accordingly, for the above mentioned reasons, the Commission hereby imposes a penalty of INR Two Hundred Crore upon Amazon.

CCI approves acquisition of minority stake in Delhivery byFedEx India and acquisition of certain operating assets of FedEx India and TNT India Private Limited by Delhivery (CCI Press Release 23 Nov 2021)

The Competition Commission of India (CCI) approves acquisition of minority stake in Delhivery Limited (Delhivery) by FedEx Express Transportation and Supply Chain Services (India) Private Limited (FedEx India) and acquisition of certain operating assets of FedEx India and TNT India Private Limited (TNT) by Delhivery.

The proposed combination relates to the i) acquisition of minority stake in Delhivery by FedEx India and, ii) acquisition of operating assets of FedEx India and TNT by Delhivery. Apart from the above, the parties also propose to enter into certain interconnected and ancillary transactions.

FedEx India

FedEx India offers end-to-end logistics solutions in India under the FedEx brand, including express parcel deliveries, full and less-than truck load freight services, and warehousing and supply chain management/third party logistics services. FedEx India caters to B2B, B2C and C2C (Retail) customers and provides wide range of shipping solutions for all business needs.

Delhivery

Delhivery is engaged in the provision of logistics services in India. As part of its logistics services, Delhivery provides transportation, warehousing, freight services and supply chain management/third party logistics services to various customers. Delhivery’s logistics services are provided to enterprises and persons who operate across different business models and are present across the value chain (individuals, big brands, small and medium enterprises, e-commerce platforms etc.).

TNT

TNT India is part of the FedEx group and also provides logistics services inter alia in the form of express parcel deliveries, special services, and freight services.

Detailed order of the CCI will follow.