5th Rlc Saquib Rizvi Memorial- Respondent (Draft One)

for RESPONDENTS MEMORANDUM for

5th RLC SAQUIB RIZVI MEMORIAL MOOT COURT COMPETITION, 2013

Before THE HONOURABLE COMPETITION APPELLANT TRIBUNAL

Appeal No. 37 of 2013

RUDRESH RUDRESH JOURNALSIT JOURNALSIT ASSOCIATION..............................................PETITIO ASSOCIATION..............................................PETITIONER NER 1

v. PRESS TRUST OF KEDIA ……………………………………………….RESPONDENT

1

TECH PRINT, INC.........…………………………………………………..RESPONDENT

2


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The 5 RLC Saquib Rizvi Memorial National Moot Cou rt Competition 2013


TABLE OF CONTENTS

1. WHETHER THE APPEAL IS MAINTAIBALE?....................................... Error! Bookmark not defined.

Error! Bookmark not defined.

a)

Structural Analysis of Sections 26 and 27. .....................................

b)

Structural Topology of the Appellate provisions under the Act .. Error! Bookmark not defined.

c)

Unreasonable reach of extra-territorial jurisdiction ....................


2. THE

AGREEMENT ENTERED BETWEEN TECH PRINT AND PTK IS IN CONTRAVENTION TO SECTION 3 OF COMPETITION ACT OF KEDIA. .. Error! Bookmark not

defined.

a)

The Agreement was entered into by Press Trust Of Kedia in its Sovereign S overeign Capacity. .... Error!

Bookmark not defined.

b)

The Agreement is not hit by section 3 of the Competition Act of Kedia. ... Error! Bookmark not

defined.

c)

In arguendo, the said Agreement is not hit by Section 3(1) ......... Error! Bookmark not defined.

3. WHETHER THERE IS ABUSE OF DOMINANT POSITION .......... Error! Bookmark not defined. a) That Press Trust of Kedia and Tech Print did not have Dominant Position in the relevant market. ...................................................................................................... Error! Bookmark not defined. Relevant Market ...................................................................................


Dominant Position in the relevant market .........................................


Monopoly ..............................................................................................


b) In Arguendo: Assuming but not admitting that Press Trust of Kedia and Tech Print ha d Dominant position, there has actually been no abuse of Dominant Position. .... Error! Bookmark not defined.

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TABLE OF CONTENTS

1. WHETHER THE APPEAL IS MAINTAIBALE?....................................... Error! Bookmark not defined.


a)

Structural Analysis of Sections 26 and 27. .....................................

b)

Structural Topology of the Appellate provisions under the Act .. Error! Bookmark not defined.

c)

Unreasonable reach of extra-territorial jurisdiction ....................


2. THE

AGREEMENT ENTERED BETWEEN TECH PRINT AND PTK IS IN CONTRAVENTION TO SECTION 3 OF COMPETITION ACT OF KEDIA. .. Error! Bookmark not

defined.

a)

The Agreement was entered into by Press Trust Of Kedia in its Sovereign S overeign Capacity. .... Error!

Bookmark not defined.

b)

The Agreement is not hit by section 3 of the Competition Act of Kedia. ... Error! Bookmark not

defined.

c)

In arguendo, the said Agreement is not hit by Section 3(1) ......... Error! Bookmark not defined.

3. WHETHER THERE IS ABUSE OF DOMINANT POSITION .......... Error! Bookmark not defined. a) That Press Trust of Kedia and Tech Print did not have Dominant Position in the relevant market. ...................................................................................................... Error! Bookmark not defined. Relevant Market ...................................................................................


Dominant Position in the relevant market .........................................


Monopoly ..............................................................................................


b) In Arguendo: Assuming but not admitting that Press Trust of Kedia and Tech Print ha d Dominant position, there has actually been no abuse of Dominant Position. .... Error! Bookmark not defined.

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INDEX OF AUTHORITIES

ARTICLES

F F.M. Scherer & David Ross, Industrial Ross, Industrial Market Strucutre and Economic Perforemance, Perforemance, (1990) 3rd Edition, Edition, p. 42.



Gillian Hadfield, "Of Sovereignty and Contract: Damages for Breach of Contract by Government", Vol. 8 , (1999) Southern California Interdisciplinary Law Journal, 467. Journal, 467.

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Jonathan B. Baker," “per se” Rules in the Antitrust Analysis of Horizontal Restraints", Vol. 36, Issue no. 29 (1991) Antitrust (1991) Antitrust Bulletin, Bulletin, pp. 733, 740.

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Mitsuo Matsushita, Competition Law and Policy in the Context of the WTO System,

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(1995), 44 De Paul Law Review Shingo Seryo, Cartel And Bid Rigging " Antimonopoly Act and Competition Policy, Policy, Sept.

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11, 2002, JICA's Documents Designed for Developing States BOOKS

Abir Roy Jayant Kumar, ‘Competition Law in India’ , Eastern Law House Pvt. Ltd:

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Kolkata, 2008 Adi Talati, Nahar S. Mahala, ‘Competition Act, 2002 Law, Practice and Procedure’, Procedure’,

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Commercial Law Publishers (India) Pvt. Ltd: Noida, First Edn., 2006 Avtar Singh, Harpreet Kaur, ‘Competition Law’ , Eastern Book Co.: Lucknow, First Edn.,

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2012 Benjamin Klein and Andres V. Lerner, ‘Economics of Anti-trust Anti-trust Law, Edward Elgar

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Publishing Ltd.: Massachusetts, Vol. 2, 2008 Einer Elhauge, Damien Geradin, ‘Global Competition Law and Economics’, Oxford and

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Portland: Oregon, Second Edn., 2011 Mitsuo Matsuhita, Thomas J. Schoenabaum, Petros C. Mavroidis, ‘The World Trade

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Organization, Law Practice and Policy’, Oxford University Press: New York, Second Edn., 2006 P. Satyanayana Prasad, ‘Competition Law and Cartels’, Amicus Books, The Icfai

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University Press: Hyderabad, First Edn., 2007 III | P a g e th


MEMORANDUM for RESPONDENTS

Peter Van den Bossche, ‘The Law and the Policy of the WTO: Text, Cases and

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Materials’ , Cambridge University Press: New York, First Edn., 2005 

Richard Whish, ‘Competition Law’ , Oxford University Press: Oxford, Fifth edition, 2003

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S.M. Dugar, ‘ Law of Restrictive Trade Practices in India’, Taxmann Publications: New Delhi, 1976 T. Ramappa, ‘Competition Law in India: Policy, Issues and Developments’, Oxford

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University Press: New Delhi, Second Edn., 2006 Vinod Dhall, ‘Competition Law Today: Concepts, Issues, and the Law in Practice’ ,

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Oxford University Press: New Delhi, Second Edn., 2008 CASES REFERRED 

Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487.

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Ajay Pradhan v. State of Madhya Pradesh, AIR 1988 SC 1875, p. 1878.

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AKZO v. Commission, Case C- 62/86 [1991] ECR I-3359, [1993] 5 CMLR 530, ¶ 258.

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All India Tyre Dealers’ Federation v. Tyre Manufacturers, 2013 CompLR 0092.

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Appalchian Coals Inc. et al v. United States, 288 U.S. 344 (1933).

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AstraZeneca AB v. Commission, Case T-321/05 [2010] ECR II-000, [2010] 5 CMLR 1585, ¶ 242-254.

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British Airways v. EC Commission [2007] ECR I-2331, ¶¶ 69 and 86.

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Broadcast Music, 441 U.S. at 19-20, 99 S.Ct. at 1562.

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Commercial Solvents v. Commission, (1974) ECR 223.

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Competition Commission of India v. Steel Authority of India, 2010 CompLR 61.

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Easland Combines Coimbatore v. CCE , AIR 2003 SC 843, p.850.

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Emperor v. Benoarilal Sharma, AIR 1945 PC 48, p. 53.

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European Night Services Ltd. v. Commissioner , [1998] ECR II-3141.

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FICCI Multiplex Association of India v United Producers/Distributors Forum and Ors., (1 of 2009) decided on 25th May 2011. France Telecom v. Commission, Case T-340/03 [2007] ECR II-107, [2007] 4 CMLR 919, ¶¶ 99-101.

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Gold Wasser v. Ameritech Corp. 222 F.3d 390 (7th Cir. 2000)

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Gurudevdata VKSS Maryadit v. State of Maharashtra, AIR 2001 SC 1980, p. 1991.

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

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Hoffmann-la Roche & Co. AG v. Commission of the European Communities, [1979] 3 CMLR 211. ICICI Bank, Citibank and ors, (MRTP Cases 15/28, 6/28, 13/28, 12/28, 2/28, 11/28) decided on 7th June 2011. J.J. Shrimali v. District Development Officer, (1989) 1 GLR 396. IV | P a g e th



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JAK Communications Pvt. Ltd. v. Sun Direct TV Pvt. Ltd., 2011 CompLR 519 (CCI).

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Jindal Steel & Power Ltd v. Steel Authority Of India Ltd., Case N0. 11 /2009.

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Jindal Steel Power Plant v. Steel Authority of India Limited, [2012] 107 CLA 278 (Null).

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Kasturi & Sons v. Salivateswaran, AIR 1958 SC 507, pp. 510, 511.

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 

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Kasturilal Ralia Ram Jain v. The State of Uttar Pradesh,1965 AIR 1039, 1965 SCR (1) 375. M/s. Gulf Oil Corporation Ltd. v. Competition Commission of India & Ors., [2013] 114 CLA 25. Mannington Mills v. Congoleum Corporation, 595 F 2d 1287 ( 3rd Cir 1979). MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd., DotEx International Ltd. and Omnesys Technologies Pvt. Ltd., 2011 CompLR 0129 (CCI). MCX Stock Exchange Ltd. vs. National Stock Exchange of India Ltd., DotEx International Ltd. and Omnesys Technologies Pvt. Ltd., 2011 CompLR 0129 (CCI). Metro – SABA I, Case 26/76 Metro/ SABA I [1977] ECR 1875, ¶ 21. Mysore Paper Mills Ltd. v. The Mysore Paper Mills Officers Association, JT 2002 (1) SC 61.

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N.Nagendra Rao & Co v. State Of A.P., 1994 AIR 2663, 1994 SCC (6) 205.

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Nathi Devi v. Radha Devi Gupta, AIR 2005 SC 648, p. 659.

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Nelson Motis v. Union of India, AIR 1992 SC 1981, p. 1984.

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Peninsular and Oriental Steam Navigation Co. v. The Secretary of State for India, (186869) 5 Bom. H.C.R. 1. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111. Prasar Bharti (Broadcasting Corporation of India) v. TAM Media Research (P.) Ltd ., 2013 CompLR 0676 (CCI).

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Produce Market Committee v. Shri Ashok Harikuni & Anr. Etc., AIR 2000 SC 3116.

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R. D. Shetty v. International Airport Authority, (AIR 1979 SC 1628).

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Raghunath Rai Bareja v. Punjab National Bank , (2007) 2 SCC 230, (pp. 43, 44).

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Secretary of State for India in Council v. A. Cockcraft & Anr., (1914) I.L.R. 39 Mad. 351.

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Sh. Dhanraj Pillay and Others v. M / s . Hockey India, 2013 Comp LR 0543 (CCI).

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Shri Neeraj Malhotra, Advocate v. North Delhi Power Limited, BSES Rajdhani Power Limited and BSES Yamuna Power Limited , Case No. 06/2009. Solavay SA v. Commission, Case T-57/01 [2009] ECR II-4621, [2011] 4 CMLR 9, ¶ 275305.

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Som Prakash v. Union of India, AIR 1981 SC 212.

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Standard Oil Co. v. United States, 221 U.S. 1 (1911).

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State of Bombay v. Hospital Mazdoor Sabha, 1960 AIR 610, 1960 SCR (2) 866.

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State of Jharkhand v. Govind Singh, AIR 2005 SC 294, p. 296.

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State of Maharashtra v. Nandet Prabhani Operato rs Sangh, AIR 2000 SC 725, p. 727. V|Page th



Stirling Harbour Services Pty Ltd v Bunbury Port Authority, [2000] FCA 38; (2000) ATPR 41-752.

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The Secretary of State for India in Council v. Moment, (1912-13) 40 I. A. 48.

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Timberlane Lumber Co v. Bank of America, 549 F 2d 597 (9th Cir 1976).

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United Brands v. Commission, Case 27/76 [1978] ECR 207, [1978] 1 CMLR 11.

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United States v. Grinell Corporation, 384 US 563 (1966). Upper Doab Sugar Mills v. Shahdara (Delhi) Sahranpur Light Railway, AIR 1963 SC 217.

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Virgin/British Airways, OJ [2000] L 30/1.

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Volk v. Vervaecke, [1969] ECR 298.

CONSTITUTIONS REFERED:

Constitution of India, 1950.

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STATUTES REFERRED: 

Clayton Act, 1914

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Competition Act, 2002

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General Agreement on Trade and Tariffs, 1994

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Monopolies and Restrictive Trade Practices Act, 1969

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Sherman Act, 1890

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UK Competition Act, 1998

Reports

High Level Raghavan Committee Report on Competition, pg. 30, 35.

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MISCELLANEOUS

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Federal Communication Commission, Consumer Substitution Among Media, (September 2000), p. 39.

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Merger Guidelines of the Australian Governement; the Mergers Guidelines of the New Zealand Commerce Commission; and the Merger Enforcement Guidelines of the Canadian Competition Bureau.. Telecom Regulatory Authority of India, Consultation paper on Media Ownership, (2013), pp. 52-53.

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STATEMENT OF JURISDICTION

THE Respondents reserve the right the right to challenge the jurisdiction of the Tribunal.

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STATEMENT OF FACTS

1. Tech Print, Inc. (Tech Print) is multinational news and broadcasting company based in Texas, USA. It has offices in many countries like Australia, New Zealand etc. Being attracted by Kedia’s developing economy it wants to enter the Kedian news market. Press Trust of Kedia (PTK) is a government sponsored body having exclusive rights over certain political news which other media and news agencies are not permitted to air/print. 2. Under the Kedian constitution the Governemnt has rights to media censorship. In exercise of this right it has established Kedia under the Press Trust of Kedia Act. 3. Tech Print and PTK enter into an agreement whereby Tech Print agrees share its superior technological advances in news streaming and PTK has allowed exclusive rights to Tech Print to broadcast news items which PTK is exclusively permitted to do. I lieu of this PTK is to get huge amount from Tech Print and acess to Tech Print’s highly developed technology. 4. Rudresh Journalist's Association (RJA) a young journalist association filed a writ petition in the High Court of Kedia challenging this agreement. The court dismissed the same by passing an order whereby it said that the matter involved the question under Kedian Competition Law and therefore, the jurisdiction for same is with the Kedian Competition Commission. It did not however deal in length with the constitutionality of such an agreement. 5. Even the Government circles were not happy with this transfer, moreover there were rumors that the officers of PTK had taken bribes from Tech Print for this transfer. 6. RJA therefore approached Kedian Competion Commission (KCC) by filing information that PTK and Tech Print are monopolising the market. It also challenged clause (m), (n) and (p) of the agreement which confers rights on Tech Print. PTK and Tech Print argued that there is no provision in the Kedian Competition Law which punishes monopolisation which is a purely US economic concept. 7. On the basis of the report of the Director General and considering the rival submissions KCC passed an order under section 27 of the Kedian Competition Act, 2000. Their observation was that the Constitution under Article 19 allows for censorship of news and by virtue of this the Government has conferred rights on PTK. They considered the fact that the ownership of PTK with regard to total news is 35 %, with regard to political news is 100% but it lags in other sectors. They further added that PTK has been awarded this monopoly by the statute itself and all it has done is to enter into an agreement. 8. They rejected RJA's contention and said that the alleged agreement does not fall within section 3 and section 4 of Kedian Competition Act, 2000. Adding to this they also refused to

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deal with the constitutionality of the agreement and observed that they had no jurisdiction in this regard. Saying thus they closed the case without any costs. 9. Aggrieved by this order, RJA has sought to approach Competition Appellate Tribunal. Also the laws of Kedia are in pair materia with the laws of India.

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STATEMENT OF ISSUES

1. That this Tribunal has the jurisdiction to decide present case. 2. That the agreement entered between Press Trust of Kedia and Tech print is in contravention of Section 3 of Competition Act, 2000. 2.1 Whether both the parties fall within jurisdiction o0f section 3 of competition Act, 2000? 2.2 Whether the agreement is hit by section 3 of the Competition Act, 2000? 2.3 In Arguendo: Whether the said agreement is hit by Section 3(1) of Competition Act, 2000? 3. That Press Trust of Kedia and Tech Print have violated provisions of section 4, Competition Act, 2000. 3.1 Whether Press Trust of Kedia and Tech Print have dominant position in the relevant market? 3.2 Whether Press Trust of Kedia and Tech Print have abused their dominant position as per section 4(2) of Competition Act, 2000?

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SUMMARY OF ARGUMENTS

1. That this Tribunal has the jurisdiction to decide present case. By the language used by the Act, it is explicit that the legislature intends that only in those cases where, after conducting its procedural enquiry under Section 26 of the Act, the Commission finds that there has been a contravention of Section 3 or Section 4, it will proceed further to give orders under Section 27 of the Act. Thus, it is apparent that in the present case, the order passed by the CCK does not, prima facie, fall within Section 27 of the Act as the order states that the case does not fall within Sections 3 and 4, which is a patent contradiction to the essential condition of the provision itself. Section 53A(1)(a) explicitly specifies what are appealable. No other direction, decision or order of the Commission is appealable except those expressly stated can be appealed against; though a person may be aggrieved by it. . Drawing on the principle of Judicial Comity, the effects’ doctrine should be applied in a relatively restrictive way, requiring not only that there should be a direct and substantial effect within Kedia, but also that the respective interests of Kedia in asserting jurisdiction and of other States which might be offended by such assertion must also be weighed against one another. In the present case, the facts do not reveal any direct or substantial effect on competition within Kedia. The respondents hereby humbly submit that in light of the above arguments, the Competition Appellate Tribunal does not have the jurisdiction to entertain such appeals and the same is therefore not maintainable and should be dismissed forthwith. 2. That the agreement entered between Press Trust of Kedia and Tech print is in contravention of Section 3 of Competition Act, 2000. 2.1 Whether both the parties fall within jurisdiction o0f section 3 of competition Act, 2000? 2.2 Whether the agreement is hit by section 3 of the Competition Act, 2000? 2.3 In Arguendo: Whether the said agreement is hit by Section 3(1) of Competition Act, 2000? 3. That Press Trust of Kedia and Tech Print have violated provisions of section 4, Competition Act, 2000. 3.1 Whether Press Trust of Kedia and Tech Print have dominant position in the relevant market? Press Trust of Kedia does not have a dominant position in the relevant market of news, broadcasting and internet. Internet will be included as a part of relevant market XII | P a g e th



in the wake of emerging usage and growth of internet as medium of news. PTK only has 35% share for news and broadcasting media, if internet were to be included in the relevant market this share would be diluted. Further, the share of PTK which is already less than 40% even within news and broadcasting media will further decrease when internet is included. Tech print too does not have dominant position in the relevant market. This is because nothing with regards to size or resources has been mentioned in the factsheet. Further, the total share of Tech Print is also not mentioned. Hence, Tech Print does not have a dominant position. 3.2 Whether Press Trust of Kedia and Tech Print have abused their dominant position as per section 4(2) of Competition Act, 2000? PTK and Tech print have not abused their dominant position because they do not have dominant position in the relevant market. Also, assuming but not admitting that PTK and Tech Print do have dominant position, they have not violated provision of Section 4(2) (c) and section 4(2) (e) respectively. PTK has not denied market access to anyone because no one in the first place had a right to air/print political news. Further, this agreement helps in promoting efficiency which has been held to be a justifiable defense. Also, Tech Print cannot be said to have violated section 4(2) (e) because it never had a dominant position in any of the market.

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ARGUMENTS ADVANCED

1. WHETHER THE APPEAL IS MAINTAIBALE?

1.1 The appellants herein have filed an appeal at the Kedian Competition Appellate Tribunal based on the order of the Competition Commission of Kedia under section 27 of the Kedian Competition Act 2002. The respondents hereby humbly submit that the appeal is not maintainable per se, as essentially, the order cannot be considered in law, as one under the impugned sections in light of the submissions as under.

a) Structural Analysis of Sections 26 and 27. 1.2 Primarily, there are three main elements which are intended to be controlled by the implementation of the provisions of the Act, which have been specifically dealt with, under Sections 3, 4 and 6 read with section 19 and 26 to 29 of the Act. Vast powers have been given to the Commission to deal with the complaints or information leading to invocation of the provisions of sections 3 and 4 read with section 19 of the Act. Section 19 empowers the Commission to inquire into the violation of provisions of section 3(1) and section 4(2) to determine whether the agreement has an appreciable adverse effect on competition, or the enterprise enjoys a dominant position or whether a market constitutes a relevant market. The procedure to be followed during the enquiry after such a reference under section 19 by the commission has been provided for in section 26 of the Act. 1.3 Next, it is important to note here, section 27 of the Act. It reads as follows:

Orders by Commission after inquiry into agreements or abuse of dominant position 27. Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:(a) Direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be;

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(b) Impose such penalty, as it may deem fit which shall be not more than ten per cent. of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse: [Provided that in case any agreement referred to in section 3 has been entered into by a cartel, the Commission may impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty of up to three times of its profit for each year of the continuance of such agreement or ten per cent. of its turnover for each year of the continuance of such agreement, whichever is higher.] (c) [Omitted by Competition (Amendment) Act, 2007] (d) Direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission; (e) Direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs, if any:; (f) [Omitted by Competition (Amendment) Act, 2007] (g) Pass such other 45[order or issue such directions] as it may deem fit. [Provided that while passing orders under this section, if the Commission comes to a finding, that an enterprise in contravention to section 3 or section 4 of the Act is a member of a group as defined in clause (b) of the Explanation to section 5 of the Act, and other members of such a group are also responsible for, or have contributed to, such a contravention, then it may pass orders, under this section, against such members of the group.] 1.4 Thus, the Commission, after inquiry by the Director General under section 26(7) or by itself under section 26(8) adopts the course specified under sections 27 and 28 of the Act in the case of abuse of dominant position. It is pertinent to note here the opening words of the provision, which reflects a plain meaning. The opening paragraph of Section 27 reads, “Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely...” The words require no further explanation. An order under Section 27 can only be passed if the CCK finds a contravention of Sections 3 or 4 of the Act. 1.5 It is a fundamental principle of statutory interpretation that when the words of a statute are clear, plain or unambiguous, i.e., they are reasonably susceptible to only one meaning, the courts 2|Page th



are bound to give effect to that meaning irrespective of consequences.1 In the words of VISCOUNT SIMONDS, L.C., “Again and again, this board has insisted that in construing enacted words, we are not concerned with the policy involved, or with the results, injurious or otherwise, which may follow from giving effect to the language used.”2 In the present case, it is explicit that the legislature intends that only in those cases where, after conducting its procedural enquiry under Section 26 of the Act, the Commission finds that there has been a contravention of Section 3 or Section 4, it will proceed further to give orders under Section 27 of the Act. A plain reading of Section 27 of the Act shows that powers under this Section basically relate to penalising and issuing directions to, the party(s) violating the provisions of the Act, with no powers to give direct relief to individual parties who may have suffered on account of the anti-competitive conduct.3 Thus, it is apparent that in the present case, the order passed by the CCK does not, prima facie, fall within Section 27 of the Act as the order states that the case does not fall within Sections 3 and 4, which is thus a patent contradiction to the essential condition of the provision itself. Further, the order provides for closing of the matter on the ground that the case does not fall within the ambit of Section 3 or 4, which is not any order as provided for within the ambit of Section 27.

b) Structural Topology of the Appellate provisions under the Act 1.6 Section 53A of the Act provides for the Establishment of an Appellate Tribunal serving dual functions: a) To hear appeals against any direction issued or decision made or order passed by the Commission under section 26(2), 26(4), 27, 28, 31, 32, 33, 38, 39, 43, 43A, 44, 45 or 46; b) To adjudicate on claim for compensation that may arise from the findings, or the appellate order against any finding, of the Commission, or under section 42A or under section 53Q(2) and to pass orders for the recovery of the compensation.

1

Nelson Motis v. Union of India, AIR 1992 SC 1981, p. 1984; Gurudevdata VKSS Maryadit v. State of Maharashtra, AIR 2001 SC 1980, p. 1991; State of Jharkhand v. Govind Singh, AIR 2005 SC 294, p. 296; Nathi Devi v. Radha Devi Gupta, AIR 2005 SC 648, p. 659. 2 Emperor v. Benoarilal Sharma, AIR 1945 PC 48, p. 53. See further Ajay Pradhan v. State of Madhya Pradesh, AIR 1988 SC 1875, p. 1878; State of Maharashtra v. Nandet Prabhani Operators Sangh , AIR 2000 SC 725, p. 727; Easland Combines Coimbatore v. CCE , AIR 2003 SC 843, p.850; Raghunath Rai Bareja v. Punjab National Bank , (2007) 2 SCC 230, (pp. 43, 44). 3 MCX Stock Exchange Ltd. vs. National Stock Exchange of India Ltd., DotEx International Ltd. and Omnesys Technologies Pvt. Ltd., 2011 CompLR 0129 (CCI).

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Thus it is to be noted that Section 53A(1)(a) explicitly specifies what are appealable. No other direction, decision or order of the Commission is appealable except those expressly stated can be appealed against; though a person may be aggrieved by it. Subsequently, Section 53B provides for an appeal to the Appellate Tribunal. 1.7 Section 53(B) states that appeal may be preferred by any person who is aggrieved by any directions, decisions or orders of the Commission strictly referred to in clause (a) of Section 53A.4 This necessarily implies that the appellate jurisdiction is very restricted. The Act contemplates limited appeal to the Tribunal, as specified under section 53A(a) of the Act, and no other. Though Orders passed under Section 27 are appealable by provision of Section 53A(a), the respondents humbly submit that the objections raised in paragraph 1.5 of this memorial prove to be a serious bar against any appeal. 1.8 In light of the above arguments it is pertinent to note that the fundamental rule of Statutory Interpretation affecting jurisdiction of Courts is that provisions excluding jurisdiction of civil courts and provisions conferring jurisdiction on authorities and tribunals other than civil courts are strictly construed.5 In the present case, as has been demonstrated above, the order given by the CCK is not, per se, an order under Section 27 and since an appeal to this forum is very limited, any order, which does not explicitly fall within the ambit of the orders that are listed to be appealable, cannot be conveniently accommodated by turning a blind eye to the mistake which is apparent, and thus needs to be rectified first. A strict construction of the jurisdiction conferred on the tribunal makes it clear that an order under section 27 by the commission can only be appealable when the commission concludes that the respondents have indeed contravened Section 3 or 4, which is not so in the present case. 1.9 In All India Tyre Dealers’ Federation v. Tyre Manufacturers,6 a subsequent application for rectifying the order of the CCI was accepted by the CCI which clearly stated that: “ It is clear from a plain reading of Section 27 that orders under Section 27 can only be passed where after inquiry, the Commission finds a contravention of Sections 3 or 4 of the Act. Since in the present case, no contravention of either Sections 3 or 4 was found by the Commission after inquiry, the Order in question cannot be made under Section 27 of the Act.” The judgment pronounced in Competition Commission of I ndia v. Steel Authority of I ndia7 lays down the correct position of law in this regard:

4

Section 53B (1), Competition Act, 2002. Kasturi & Sons v. Salivateswaran, AIR 1958 SC 507, pp. 510, 511; Upper Doab Sugar Mills v. Shahdara (Delhi) Sahranpur Light Railway, AIR 1963 SC 217. 6 2013 CompLR 0092. 7 2010 CompLR 61. 5

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“The provisions of section 26 and 53A of the Act clearly depict the legislative intent that the framers never desired that all orders, directions and decisions should be appealable to the Tribunal. Once the legislature has opted to specifically state the order, direction and decision, which would be appealable by using clear and unambiguous language, then the normal result would be that all other directions, orders etc. are not only intended to be excluded, but in fact, have been excluded from the operation of that provision.”

c) Unreasonable reach of extra-territorial jurisdiction 1.10 The effects’ doctrine cannot be excercised unconditionally. Drawing on the principle of Judicial Comity, the effects’ doctrine should be applied in a relatively restrictive way, requiring not only that there should be a direct and substantial effect within Kedia, but also that the respective interests of Kedia in asserting jurisdiction and of other States which might be offended by such assertion must also be weighed against one another.8 In the present case, the facts are completely silent and the appellant has not been sufficiently able to assert as to what grievous direct and substantial effect the agreement has caused within Kedia and is thus baseless on the ground of asserting extra-territorial jurisdiction. 1.11 The respondents hereby humbly submit that in light of the above arguments, the Competition Appellate Tribunal does not have the jurisdiction to entertain such appeals and the same is therefore not maintainable and should be dismissed forthwith.

8

Timberlane Lumber Co v. Bank of America, 549 F 2d 597 (9 th Cir 1976) ; Mannington Mills v. Congoleum Corporation, 595 F 2d 1287 ( 3 rd Cir 1979).

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MEMORANDUM for RESPONDENTS 2.

THE AGREEMENT ENTERED BETWEEN TECH. PRINT AND PTK IS IN CONTRAVENTION TO SECTION 3 OF COMPETITION ACT OF KEDIA. a) The Agreement was entered into by Press Trust Of Kedia in its Sovereign Capacity.

2.1 It is humbly submitted before this Hon’ble Tribunal that PTK qualifies as state under Article 12 of the Constitution and the agreement entered into by it has been in discharge of its statutory duties hence it is exempt from Section 3 and Section 4 of the Competition Act of Kedia. Article 12 of the Constitution of Kedia is as follows: “ In this part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”9 2.2 The concept of ‘other authorities’ falling within State has caused a great deal of inconvience to the judiciary but as of now the settled position with respect to this can be summarized by way of the following test which has evolved over a lot many cases: 1. “If the entire share capital of the corporation is held by government, it would go a long way towards indicating that the corporation is an instrumentality or agency of government 2. The existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. 3. It may also be a relevant factor…whether the corporation enjoys monopoly status which is State conferred or State protected. 4. If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of government.

9

Article 12, Constitution of India.

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5. Specifically, if a department of government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of government.”10 2.3 The conditions enumerated in point 1, 2, 3, 4 are completely fulfilled in the present case as PTK is State sponsored, it performs the Governmental function of news censorship, it has complete authority to ascertain as to which news item should be aired. The functions are definitely of great public importance, dissemination of news is an important task in democracy, and it not only lets people take informed decisions but is also very important for the health of the nation. It enjoys complete statutory monopoly in the area of political news. As to condition 2 since the trust is State funded then by implication it can be said that it has upper control in its functioning. On top of that the officials of the trust belonged to the administrative services of the State. Similarly in Mysore Paper Mills Ltd. v. The Mysore Paper Mills Officers Association,11 Supreme Court held that“Company substantially financed and financially controlled by the Government, managed by a Board of Directors nominated and removable at the instance of the Government and carrying on important functions of public interest under the control of the Government is 'an authority' within the meaning of Art.12.” 2.4 Since it has now been proved that PTK is State as per the Constitution, it is contended that while entering into contract PTK was discharging its statutory duty and therefore enjoys immunity. “…where an act is done, or a contract is entered into, in the exercise of powers usually called sovereign powers; by which we mean powers which cannot be lawfully exercised except by sovereign, or private individual delegated by a sovereign to exercise them, no action will lie.”12 2.5 When the government enters into the world of contract and assumes the position of a private person for juridical purposes, however, it never leaves behind its sovereign status and its overriding power.13 In Kasturilal Ralia Ram Jain v. The State of Uttar Pradesh,14 some police officers of the State seized gold from the appellant in exercise of their statutory powers, but were negligent in dealing with its safe custody. As a result of such negligence the gold was not returned to the appellant and so, he filed the suit against the State claiming the value of the gold. 10

R. D. Shetty v. International Airport Authority, (AIR 1979 SC 1628); Som Prakash v. Union of India, AIR 1981 SC 212; Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487; Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111; Ramana Dayaram Shetty vs The International Airport Authority of India, 1979 AIR 1628, 1979 SCR (3)1014. 11 JT 2002 (1) SC 61. 12 Peninsular and Oriental Steam Navigation Co. v. The Secretary of State for India, (1868-69) 5 Bom. H.C.R. 1. 13 Gillian Hadfield, "Of Sovereignty and Contract: Damages for Breach of Contract by Government", Vol. 8 , (1999) Southern California Interdisciplinary Law Journal, 467. 14 1965 AIR 1039, 1965 SCR (1) 375.

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The State contented that the work done by it was in discharge of sovereign functions. The Court said, “it is not difficult to realize the significance and importance of making such a distinction particularly at the present time when, in the pursuit of their welfare ideal, the Governments of the States as well as the Government of India naturally and legitimately enter into many commercial and other undertakings and activities which have no relation with the traditional concept of Governmental activities in which the exercise of sovereign pow er is involved.” Thus a distinction was made between sovereign functions and other functions and the Government was held to be immune with respect to its governmental functions. 2.6 The approach of Kasturilal was also adopted in The Secretary of State for India in Council v. Moment,15 “the State pleads immunity against claims for damages resulting from injury caused by negligent acts of its servants, the area of employment referable to sovereign powers must be strictly determined. Before such a plea is upheld, the Court must always find that the impugned act was committed in the course of an undertaking or employment which is referable to the exercise of sovereign power, or to the exercise of delegated sovereign power…” The claim for injuries in a road accident were denied in Secretary of State for India in Council v. A. Cockcraft & Anr.,16 because of the finding that the provision and maintenance of roads, especially a military road, is one of the functions of Government carried on in the exercise of its sovereign powers and is not an undertaking which might have been carried on by private persons. 2.7 One of the tests to determine if the legislative or executive function is sovereign in nature is whether the State is answerable for such actions in courts of law. For instance, acts such as defence of the country, raising armed forces and maintaining it, making peace or war, foreign affairs, power to acquire and retain territory, are functions which are indicative of external sovereignty and are political in nature. Therefore, they are not amenable to jurisdiction of ordinary civil court. No suit under Civil Procedure Code would lie in respect of it. The State is immune from being sued, as the jurisdiction of the courts in such matter is impliedly barred… An exercise of political power by the State or its delegate does not furnish any cause of action for filing a suit for damages or compensation against the State for negligence of its officers. Reason is simple. Suppose there is a war between two countries or there is outbreak of hostilities between two independent States in course of which a citizen suffers damage. He cannot sue for recovery of the loss in.17 2.8 When the Government operates in the field of commerce and industry, the provisions of the Act would apply to them but they would have no application if the activity or function is

15

(1912-13) 40 I. A. 48. (1914) I.L.R. 39 Mad. 351. 17 N.Nagendra Rao & Co v. State Of A.P., 1994 AIR 2663, 1994 SCC (6) 205. 16

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governmental or sovereign in character.18 In N. Nagendra Rao & Co. v. State of A.P,19 the Court defined non-sovereign functions as “discharge of public duties under a statute, which are incidental or ancillary and not primary or inalienable function of the State”. In the present case the reason for giving news rights to PTK was just not to disseminate the news to the people but also to censor news which might cause discontent against the Government. It was the only agency which was bestowed with this right and if any other enterprise undertook this activity, there liable both under the civil as well as the criminal law of Kedia. The act of PTK whereby it entered into agreement with Tech Print can be seen as a discharge of its sovereign functions because acquiring of advanced technology by it can be said to be a function flowing out of the power given to it. In J.J. Shrimali v. District Development Officer 20 the court included welfare activities carried on during famine to be well within the ambit of Sovereign functions. 2.9 The concept of sovereignty in a constitutional democracy is different from the traditional concept of sovereignty which is confined to 'law and order', 'defence', 'law making' and 'justice dispensation'. In a democracy governed by the Constitution the sovereignty vests in the people and the State is obliged to discharge its constitutional obligations contained in the Directive Principles of the State Policy in Part - IV of the Constitution of India. From that point of view, wherever the government undertakes public welfare activities in discharge of its constitutional obligations, as provided in part-IV of the Constitution, such activities should be treated as activities in discharge of sovereign functions. Therefore, such welfare governmental activities cannot be brought within the fold of industrial law by giving an undue expansive and wide meaning to the words used in the definition of industry regarding immunity to sovereign powers.21 2.10 It is therefore humbly contended before the Hon’ble Tribunal that ‘The Agreement’ was entered into by PTK in its sovereign capacity and hence its acts do not follow within the ambit of Section 3.

b) The Agreement is not hit by section 3 of the Competition Act of Kedia. 2.11 It is humbly pleaded before the Hon’ble tribunal that ‘The Agreement’ is not hit by Section 3 of the Act because first of all for Section 3 to apply there must be effect on competition in the market which is absent in the present case. Secondly the agreement entered into by the players has in no way caused any appreciable adverse effect to the competition. 18

State of Bombay v. Hospital Mazdoor Sabha, 1960 AIR 610, 1960 SCR (2) 866. 1994 AIR 2663, 1994 SCC (6) 205. 20 (1989) 1 GLR 396. 21 Produce Market Committee v. Shri Ashok Harikuni & Anr. Etc., AIR 2000 SC 3116. 19

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2.12 In the recently decided Jindal Steel & Power Ltd v. Steel Authority Of India Ltd.,22 the plea of ‘no effect on competition’ was raised by the counsel for SAIL. The facts of the case are strikingly similar to the present case, Indian Railways had given all rights relating to carriages to SAIL, this was a practice being followed since long. Jindal challenged it claiming it to be anticompetitive. However, the Court rejected the plea on the basis that there was no competition in the market because the Indian Railways had statutory monopoly and no other player had right to undertake the activity. Similar approach was followed by the Commission in M/s. Gulf Oil Corporation Ltd. v. Competition Commission of India & Ors., 23 and Sh. Dhanraj Pillay and Others v. M / s . Hockey India.24 In the present factual matrix prior to the entry of Tech Print no other player except for PTK had right to print or air political news, nothing has changed even after the entry of Tech Print, the level of competition remains same even after its entry. 2.13 Also, for this section to apply there must be appreciable adverse effect on the competition. In Appalchian Coals I nc. et al v. United States 25 it was held that a co-operative enterprise is not to be condemned as undue restraint because it may effect a change in market conditions, where the change would be in mitigation of recognised evils and would not impair but rather foster fair competitive practices or benefit the consumer. The fact that the party’s market share exceeds the threshold does not by itself imply anything.26 In the present case after ‘The Agreement’ the quality of news would become better. The exclusive rights of PTK coupled with the advanced technology of Tech Print are bound to bring evolution in the news industry. This will in a way be beneficial for the consumers and public at large. The de minimis ie the notion of appreciable effect rule can be applied here. If the agreement is not capable of significantly affecting trade it is not to be considered anti competitive.27 The probability and not mere possibility of its consequences as appreciably affecting competition is the requirement.28 The purpose appears not to prohibit the mere possibility, but to prevent competition adversely.29 A similar reasoning was adopted by the Court in Standard Oil Co. v. US.30

22

Case N0. 11 /2009. [2013] 114 CLA 25. 24 2013 Comp LR 0543 (CCI). 25 288 U.S. 344 (1933). 26 Joined Cases T-374/94, T-375/94, T-384/94 and T-385/94, European Night Services Ltd. v. Commissioner , [1998] ECR II-3141. 27 Case 5/69, Volk v. Vervaecke, [1969] ECR 298. 28 D.P. Mittal, Competition Law & Practice, (2011) 3rd Edition, Taxmann Publications (P.) Ltd., New Delhi, p. 176. 29 Id. at 177. 30 221 U.S. 1 (1911). 23

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2.14 Appreciable adverse effect on competition does not refer to a particular list of agreement but a particular economic consequence which may be produced by quiet different sort of agreements in varying circumstances.31 Here all the effects which are being alleged are hypothetical and there is no possibility of their happening in near future. In contrast to this, the agreement will be beneficial to the customer because now they can get superior quality of news and there is every possibility that the prices might decrease once the technology gets adapted to the needs of Kedia. 2.15 Article 1 of the Sherman Act states that “every contract (…) in restraint of trade or commerce (…) is hereby declared to be illegal. Supreme Court has however asserted that not every restraint of trade is per se illegal. The restraint has to be undue and unreasonable; the SC also developed the “ancillary restraint” doctrine: restrictions which are inherent to a contract which in itself is absolutely neutral from a competition point of view are not caught by Section 1 of Sherman Act.32 PTK has merely entered into agreement with Tech Print, there is no change in competition because of this and no appreciable harm can be deduced. In fact to the contrary there are benefits attached to it. 2.16 There must be substantial harm to competition. 'Substantial' is an important concept in competition and consumer law and it arises in a number of provisions. ‘Substantial’ has been defined in case law as large, weighty, big, real or of substance or not insubstantial. However it is not straightforward; the meaning of substantial depends on the context and in a relative sense. An effect is considered to be substantial if it is important or weighty in relation to the size of the particular market.33 In Stirling Harbour Services Pty Ltd v Bunbury Port Authority,34 Justice French said that to work out whether competition is being substantially lessened, “...there [must] be a purpose, effect or likely effect of the impugned conduct on competition which is substantial in the sense of meaningful or relevant to the competitive process.” There are similar provisions in the Eupopean Commision Treaty as well however they do not apply to operation of services of general economic interest or having the character of a revenue producing monopoly. If such rules obstruct the performance, in, law or in fact, of the particular task assigned to them provided the interest of the community is not prejudiced.35 2.17 Even the presumption of per se illegality attached to Section 3 is rebuttable. The Court has made clear, however, that the test for determining what constitutes “ per se” unlawful price-fixing is one of substance, not semantics. “ Per se” rules of illegality are judicial constructs, and are based in large part on economic predictions that certain types of activity will more often than not

31

Supra note 28, p. 171. Supra note 28, p. 30. 33 Australian commision 34 [2000] FCA 38; (2000) ATPR 41-752. 35 Supra note 28, p. 29. 32

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unreasonably restrain competition.36 In determining whether to characterize conduct as “per se” unlawful, the Court considers whether the practice facially appears to be one that would always or almost always tend to restrict competition and decrease o utput.37 2.18 In Metro – SABA I,38 the confirmed the need to take into account workable competition when assessing an undertaking’s market behavior. This concept recognizes the fact the reduction of the number of economic entities on market does not necessarily diminish the intensity of competition on the relevant market. On, the contrary it might sometimes lead to a more balanced market structure and even to an increase of effective competition. 2.19 As per the High Level Raghvan Committee report agreements are considered illegal only if they result in unreasonable restrictions on competition. This concept has been derived from UK and US. Under the U.K. law, an agreement infringes the law only if it has as its object or effect an appreciable prevention, restriction or distortion of competition. This is obviously to be determined on a case-by-case basis.39 2.20 It is therefore prayed before the Hon’ble Tribunal that PTK and Tech Print are not in contravention of Section 3 because there has been no effect on the competition because of their agreement and no appreciable adverse effect has thus been caused.

c) In arguendo, the said Agreement is not hit by Section 3(1) 2.21 In arguendo, the counsel for the Respondent plead that Section 3 (1) of the Act cannot be read separately; it should always be read either with Section 3 (3) or Section 3 (4). In the landmark judgment of FICCI Multiplex Association of India v United Producers/Distributors Forum and Ors.,40 the commission expressed its views in regard to Section 3 (1), “The Commission is of the view that Section 3(1) of the Act should not be evoked independently. The philosophy of competition is concerned primarily with ensuring free competition between existing or potential competitors because competition results in allocative and productive efficiencies that result in consumer welfare. Imposition of switching costs cannot be per se anticompetitive in absence of vertical or horizontal agreements.” A similar view was expressed by the Court a number of cases.41

36

Jonathan B. Baker," “per se” Rules in the Antitrust Analysis of Horizontal Restraints", Vol. 36, Issue no. 29 (1991) Antitrust Bulletin, pp. 733, 740; F F.M. Scherer & David Ross, Industrial Market Strucutre and Economic Perforemance, (1990) 3rd Edition, p. 42. 37 Broadcast Music, 441 U.S. at 19-20, 99 S.Ct. at 1562; 38 Case 26/76 Metro/ SABA I [1977] ECR 1875, ¶ 21. 39 High Level Raghavan Committee on Competition, pp. 30, 35. 40 (1 of 2009) decided on 25th May 2011. 41 Shri Govind Aggarwal & Ors vs M/S Icici Bank Ltd. & Ors., MANU/CO/0073/2011; ICICI Bank, Citibank and ors, (MRTP Cases 15/28, 6/28, 13/28, 12/28, 2/28, 11/28) decided on 7th June 2011.

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2.22 It is therefore submitted that PTK and Tech Print cannot be held liable solely under Section 3 (1) as it always has always to be read either with 3 (3) or 3 (4) and hence cannot be invoked individually.

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3. WHETHER THERE IS ABUSE OF DOMINANT POSITION 3.1 The appellants have alleged that the respondents, PTK and Tech Print, have abused their dominant position. The Competition Commission has a duty to keep a check on abuse of dominant position by an enterprise in a relevant market. With this objective, Section 4 was added to the Competition Act, 2000 which is similar to Article 102 of EU Competition Law. 3.2 The Respondents state that before it can be said that a firm has abused its dominant position, it needs to be proved that the firm had a dominant position in the relevant market .42 Further, Section 4 of the Act prevents abuse of dominant position by an enterprise. According to the same it is required that firstly; there must be an enterprise or a group of enterprise who has dominant position in the market. Secondly, the enterprise or group is abusing such dominant position by indulging in anti-competitive practices to maintain or increase its position in the market.43 3.3 The respondents argue that the act of PTK and Tech Print cannot be said to fall within the purview of section 4 of the Competition Act, 2000. This is because PTK does not have a dominant position in the relevant market . Also, as per the information provided in the factsheet, Tech Print does not have a dominant position. Further, assuming but not admitting that the respondents have dominant position, there has been no abuse of the same.

a) That Press Trust of Kedia and Tech Print did not have Dominant Position in the relevant market. 3.4 In the United States v. E.I. du Pont de Nemours & Co.,44 it has been observed that monopoly power is defined to be the power to control market prices or exclude competition. Dominant position as defined in the explanation to Section 4 says that a position of economic strength exercised by the firm in the market which enables it to behave independently of its competitors and affect them or the market in its favor. 3.5 A dominant position is always with reference with reference to a relevant market which consists of relevant product market and relevant geographic market.45 The Raghavan Committee in its report have also stressed on the importance of identification of relevant in order to assess the firm's dominant position.46

42

Vinod Dhall (Editor), Competition law Today, Oxford University Press (2007), p. 59. Section 4, Competition Act, 2000. 44 351 US 377. 45 Explanation 1, section 4, Competition Act. 46 SVS Raghavan Committee, Report of High Level Committee on the Competition Law and Policy , ¶¶ 4.4.5 and 4.4.2 (2000). http://theindiancompetitionlaw.files.wordpress.com/2013/02/report_of_high_level_committee_on_ competition_policy_law_svs_raghavan_committee.pdf. 43

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MEMORANDUM for RESPONDENTS Relevant Market

3.6 The Competition Act, defines relevant market in respect of relevant geographical market and the relevant product market47. The words of section 2(s) say that Relevant geographic market means a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighboring areas. And Section 2(t) defines Relevant Product Market as means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use. 3.7 In United States v. Grinell Corporation48 , the key test mentioned to identify relevant product market is given as substitutability. In the last 20 years the 'science' of market definition has evolved considerably. The EC's Notice on the Definition of the Relevant Market for the Purposes of [EU] Competition Law49 , adopts the so-called 'hypothetical monopolist' test (SSNIP) for defining markets. Other Competition Authorities also adopt this test for defining relevant market.50 The appellant has argued that the relevant product market consist of news and broadcasting media only. The respondent, however, contends that the relevant market in the present circumstance will consist of News, broadcast and internet. This is bec ause internet is emerging as substitute for viewing news. 3.8 In 2000, a report prepared by FCC on Consumer Substitution among media showed clear evidence of substitution between Internet and broadcast TV, both overall and for news and between the Internet and daily newspapers for news consumption.51 Further, the report stated that "newspapers seem to serve as substitutes for TV news on broadcast and cable, radio news, and news on the Internet. In addition, the news on the Internet appears to serve as a substitute for news on broadcast television." This was said when only 55% of people had access to internet and out of these 55% only 31% people used internet to view news.52 Further, if such was the situation in 2000, then it can be concluded for present situation that this viewership would have increased considering the emergence and trend of dot com world in recent past. Also, in India the TRAI has observed that in the recent past, the consumption of online media has become significant and it is steadily growing. As a result of the growth of telecommunication technology and progressive migration of new media into digital markets, the online media has 47

Section 2(r), Competiton Act, 2000. 384 US 563 (1966). 49 OJ [1997] C 372/5. 50 Merger Guidelines of the Australian Governement; the Mergers Guidelines of the New Zealand Commerce Commission; and the Merger Enforcement Guidelines of the Canadian Competition Bureau. 51 Federal Communication Commission, Consumer Substitution Among Media, (September 2000), p. 39 . 52 Ibid, pp. 29-30. 48

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evolved rapidly and has witnessed a steep rise in its consumption. As per the report of the Indian Readership Survey (IRS 2012, Q2), Internet users have shown a half yearly growth rate of 35%. Apparently, online media has the potential to make a strong positive contribution to plurality by way of making available diverse view points and thereby reducing the ability of any one voice to dominate. 53 3.9 The studies from US and India leads us to conclusion that internet is a source of news for not only advance economy but also for emerging economic market. As the facts, state that Kedia is an emerging economic market and therefore, from the above paragraphs, it can be said that internet is emerging as a source for viewing news. Thus, news on internet is a substitute for news and broadcast media. Applying the SSNIP test, consumers will move to internet or broadcast if the prices of newspapers were to be increased. Hence, the relevant product market for the present case will constitute of news, broadcasting and internet media. It cannot be confided to just news and broadcasting media because internet is emerging as a strong medium for viewing news in today's world. 3.10 The relevant geographical market consists of the area in which the enterprise in question operates. It is that area in which the sellers sell the product and buyers purchase the same. The delineation of geographic market helps to indicate which other firms impose a competitive constraint on the one(s) under investigation. The legal test for determination of geographic market was given in United Brands v. Commission,54 where the courts stated that a clearly defined geographic area is an area within which the product is marketed and where the conditions are sufficiently homogeneous for the effect of the economic power of the undertaking concerned to be able to evaluate it. In the present case, Press Trust Kedia operates only in India as the evidence to contrary is not mentioned. Tech Print, on the other hand, operates outside and this agreement with PTK is the first step taken by Tech Print to enter Indian market. Dominant Position in the relevant market

3.11 Now that relevant market has been established, the dominant position of the enterprise has to be established. The respondents argue that they do not enjoy a dominant position in the established relevant market. 3.12 Dominant position as per explanation to section 4 is a position of strength in the market that allows the firm to operate independently of its competitors. The factors to be considered while establishing a firm's dominant position are enumerated in section 19(4). In Hoffmann-la Roche & Co. AG v. Commission of the European Communities55 , Court held that in determining dominant 53

Telecom Regulatory Authority of India, Consultation paper on Media Ownership, (2013), pp. 52-53 Case 27/76 [1978] ECR 207, [1978] 1 CMLR 11. 55 [1979] 3 CMLR 211. 54

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position of an enterprise the relationship between the market shares of the undertaking over its competitors, the existence of highly developed sales network and the absence of potential competition are relevant factors. 3.13 The market share of an enterprise plays an important role in determining firm's dominant position but it cannot be taken as sole factor. Further, in many cases, the Competition Commission of India, ECJ have considered the dominant position of the enterprise when its share was more than 50%. In AKZO v. Commission56 , the Court of Justice said that a market share of 50% or more could be considered to be very large so that, in the absence of exceptional circumstances pointing the other way, an undertaking with such a market share will be presumed dominant.57 The AKZO presumption has been followed by General courts in recent past in the cases of France Telecom v. Commission58 , Solavay SA v. Commission59 and AstraZeneca AB v. Commission60. Further, in paragraph 14 of EC's Guidance on Article 102 Enforcement Priorities it has said that dominance is 'not likely' if the undertaking's market share is below 40%; however, it goes on to say that there could be some cases below that figure that may deserve its attention. The decision in Virgin/British Airways61 is the first and only case where a firm with 39.7% market share was said to be in dominant position. 3.14 Also, the market share mentioned in the facts is the share in the market of news and broadcasting media. It doesn't take into account the internet media. Were, that to be done, the share of PTK is bound to decrease from 35% because; firstly there has been no mention of PTK having any share in the internet media and secondly, including internet in the market will increase the sphere in which the share of PTK is to be established. Nothing in the facts has been mentioned about the size or resources of Press Trust of Kedia apart from the fact that it is government sponsored. Further, facts are also silent on the percentage of sponsorship given by government. Thus, it cannot be established that the size or resources of PTK is such so as to indicate towards it having dominant position. 3.15 Press Trust of Kedia has 35% of total market share in media and broadcasting sector. This doesn't take into consideration internet media. Also, the second distant holding has share of 19%. The share of other competitors is not mentioned but it can be inferred that the same will be less than 19%. Even so, they have the ability to affect PTK. This is because, if two or more competitors with share around 19% were to form a group or a joint venture or act in similar

56

Case C- 62/86 [1991] ECR I-3359, [1993] 5 CMLR 530, ¶ 258. AKZO v Commission, Case C- 62/86 [1991] ECR I-3359, [1993] 5 CMLR 530, ¶ 258. 58 Case T-340/03 [2007] ECR II-107, [2007] 4 CMLR 919, ¶¶ 99-101. 59 Case T-57/01 [2009] ECR II-4621, [2011] 4 CMLR 9, ¶ 275-305. 60 Case T-321/05 [2010] ECR II-000, [2010] 5 CMLR 1585, ¶ 242-254. 61 OJ [2000] L 30/1. 57

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manner, then such an act will affect PTK. Thus, the competitors in the market affect the position of PTK and hence it cannot be said to exercise dominant position. Monopoly

3.16 Press Trust of Kedia has monopoly with respect to political news only and not news in general. It is true that this monopoly over political news is granted by Statute; however it is only with respect to one segment of news. Therefore, the respondent argues that such a monopoly status cannot establish dominant position of PTK. 3.17 With respect to dominant position of Tech Print, there is no sufficient evidence which can point that Tech Print has dominant position outside India. The facts only mention that it has superior technological advances in news streaming and that it is a multinational company with offices in many countries.

b) In Arguendo: Assuming but not admitting that Press Trust of Kedia and Tech Print had Dominant position, there has been no abuse of Dominant Position. 3.18 The respondent at outset argues that as there is no dominant position there cannot be abuse. However, assuming but not admitting that the respondent did have dominant position, it has not abused it. Section 4(2) of the Competition Act defines abuse of dominant position a s follows: There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group. — a) directly or indirectly, imposes unfair or discriminatory — (i) condition in purchase or sale of goods or service; or (ii) Price in purchase or sale (including predatory price) of goods or service. Explanation. — For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory condition or price which may be adopted to meet the competition; or b) limits or restricts — (i) production of goods or provision of services or market therefor; or (ii) technical or scientific development relating to goods or services to the prejudice of consumers; or c) indulges in practice or practices resulting in denial of market access in any manner; or

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d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or e) Uses its dominant position in one relevant market to enter into, or protect, other relevant market.

3.19 The respondent argues that it has not contravened any of the provisions of Section 4(2). Hence it cannot be held liable for abuse of dominant position. The following paragraphs further justify the conduct of the respondent. 3.20 Section 4(2) (a): This section talks about imposition of unfair or discriminatory price as unfair and abusive of dominant position of the firm. In United Brands v. Commission,62 ECJ has stated that imposition of unfair selling and purchase price by a dominant firm amounts to abuse. It further, added that it has to be ascertained whether the dominant undertaking has made use of opportunities arising out of its dominant position in such a way as to reap trading benefits which it would not have reaped if there had been normal competition. Charging a price which is excessive because it has no reasonable relation to the economic value of the product supplied is an abuse.63 In the present case, there is no factual evidence which points that PTK had imposed unfair or discriminatory prices. Similarly nothing has been mentioned of sort that points that Tech Print is charging unfair prices from consumers. Hence, the respondents cannot said to have contravene provisions of section 4(2) (a). 3.21 Section 4(2) (b): Limiting or restricting production of goods or provision of services or market therefor, technical or scientific development relating to goods or services to the prejudice of customers is abuse of dominant position. This means that if an enterprise imposes directly or indirectly any unfair or discriminatory conditions in purchase or sale of goods or services. It provides that there shall be an abuse of a dominant position, if an enterprise directly and indirectly discriminates in providing services to the customers or restricts technical development relating to services to the prejudice of the customers.64 The respondent argues that in the present case, there was no such discrimination on part of the respondents. Further, the agreement was entered into by PTK so that it could stream the news better and thus provide its consumer with better quality of news.

62

Supra note 55. Ibid. 64 Prasar Bharti (Broadcasting Corporation of India) v. TAM Media Research (P.) Ltd ., 2013 CompLR 0676 (CCI). 63

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3.22 Provisions of Section 4(2)(b)(i) of the Act, which stipulate that there shall be abuse of dominant position if any enterprise limits or restricts market of goods.65 This means that the market of goods was available to the aggrieved party, but by the act of the enterprise the same has been now restricted. In the present factual case, the appellant was never allowed to air/print political as the same was exclusive right of PTK. Hence, when the appellant never had right, the question of it getting violated doesn't co me into question. 3.23 Section 4(2) (c): Indulging in practice resulting in denial of market access is abuse of dominant position. Engaging in refusal to deal or refusal to supply result in denial of market access.66 A dominant firm has no general duty to cooperate with its competitors.67 In the recent case of Jindal Steel Power Plant v. Steel Authority of India Limited 68, SAIL has entered into an exclusive supply arrangement with Indian Railways (IR). It was alleged that the said MOU resulted in denial of market access to JSPL by foreclosing a substantial part of the relevant market. CCI had said that under the circumstances, it cannot be said that SAIL has denied market access for any competitor when none existed. In this case, Indian Railways never had any contract with Jindal Steel at any point of time, nor did it have any contract with SAIL at any time before this. Relying on this judgment, the respondents argue that PTK had for the first time contracted to allow Tech Print to air/print political news. Also, the appellant or any company does not have right to air/print political news. Hence, when the appellant didn't have any right, they cannot have been denied it. Thus, the act of the respondent does not result in denial of market access for the appellant or any company. 3.24 In British Airways, however, the ECJ accepted that the dominant position undertaking's conduct could be justified by efficiencies (although it was not in that case);69 “....it ten needs to be examined whether there is an objective economic justification for the discounts and bonuses granted...an undertaking is at liberty to demonstrate that its bonus system producing an exclusionary effect is economically justified. It has to be determined whether the exclusionary effects arising from such system, which is disadvantageous for competition, may be counterbalanced, or outweighed, by advantages in terms of efficiency which also benefit the consumer. If the exclusionary effect of that system bears no relation to advantages for the market and consumers, or if it goes beyond what is necessary in order to attain those advantages, that system must be regarded as an abuse.”

65

Shri Neeraj Malhotra, Advocate v. North Delhi Power Limited, BSES Rajdhani Power Limited and BSES Yamuna Power Limited , Case No. 06/2009. 66 Supra note 28, p. 319. 67 Gold Wasser v. Ameritech Corp. 222 F.3d 390 (7 th Cir. 2000) 68 [2012] 107 CLA 278 (Null). 69 Case C-95/04, British Airways v. EC Commission [2007] ECR I-2331, ¶¶ 69 and 86

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3.25 Further even the Guidance paper provides for an ‘efficiency defense’ in that undertaking may justify their conduct on grounds of efficiencies which are sufficient to ensure that there is no net harm to consumers.70 In Jefferson Parish Hospital v. Hyde71 , the respondent in the Federal District Court alleged that the petitioner was indulging in anti-competitive practices by contracting with one firm of anesthesiologists requiring all services for the petitioner to be performed by that firm. The Court found that the anti-competitive consequences of the contract were minimal and outweighed by the benefits in form of improved patient care. This was further upheld by the Supreme Court who said that as there is no evidence of effect on prices or that the market as whole was affected.72 3.26 In the present case the agreement entered into between PTK and Tech Print by which Tech Print will share its superior technological advances in news streaming and PTK has allowed exclusive rights to Tech Print to broadcast news items which PTK is exclusively permitted to do. PTK argues that the use of superior technological advances will improve the streaming of the news and so also bring a definitive efficiency to the manner in which th e news is streamlined.73 3.27 Section 4(2) (d): When an enterprise makes a conclusion of contracts subject to acceptance by other parties which, by their nature or according to commercial usage, have no connection with the subject-matter of the contract abuses its dominant position. Forcing obligations which have no relation to the subject-matter of a contract are illegal and anti-competitive.74 In the present case, the respondent argues that there has been no violation of Section 4(2) (d). The agreement between PTK and Tech Print is about mutual obligations of both the parties. It does not seek to impose any compulsion on any party to accept any supplementary obligations not connected with subject-matter of the contract. 3.28 Section 4(2) (e): There is an abuse of dominant position if an enterprise uses its dominant position in one relevant market to enter into or protect other relevant market. This means that when an undertaking uses its market power in one market to affect competition in other market. In order to decide whether there is a violation of Section 4(2)(e), it is necessary to define and distinguish the two relevant markets. It is also necessary to prove that the O.P is dominant in one relevant market and now trying to enter or protect the other relevant market.75

70

Alison Jones & Brenda Sufrin, EU Competition Law, Oxford, p. 381. 466 US 2. 72 Supra note 72, p. 383 73 Factsheet, p. 5. 74 Supra note 28, p. 325. 75 JAK Communications Pvt. Ltd. v. Sun Direct TV Pvt. Ltd., 2011 CompLR 519 (CCI). 71

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3.29 The decision in Commercial Solvents v. Commission76 , provides that abuse of dominant position occurs if a firm uses its dominant position in one relevant market to effect competition in other relevant market. 3.30 In MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd., DotEx International Ltd. and Omnesys Technologies Pvt. Ltd.77 , the CCI had held NSE to be in contravention of section 4(2) (e). The CCI reached such conclusion by first identifying the relevant market in which NSE had dominant position and that it used this strength to enter into another relevant market. It held that NSE holds a position of strength on the CD segment market comparable to its position in the CD and non CD segment markets as a whole and it enjoys advantages in the CD segment market by virtue of its dominance in the non CD segment market. Lastly it stated that Lastly, NSE has used its position of strength in the non CD segment to protect its position in the CD segment. This is in contravention of Section 4(2)(e). 3.31 It becomes clear from the above mentioned case, that two things are required if an undertaking is to be attracted by this provision: firstly, it has to be dominant in one market and secondly, it uses this dominant position to enter into other distinct relevant market. In the present case, Tech Print was not in a dominant position in any relevant market. The respondent argues that if Tech Print never had a dominant position in any market, it cannot be said to use its dominant position to enter into the market of Kedia. Through the agreement, Tech Print cannot be said to have abused its dominant position when it didn't possess any dominant position. 3.32 In conclusion, the respondents contend that they were not in dominant position in the relevant market. Further, even if it was to be assumed that the respondents were in dominant position then there has been no abuse of the same.

76

(1974) ECR 223. 2011 CompLR 0129 (CCI).

77

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5th Rlc Saquib Rizvi Memorial- Respondent (Draft One)

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