COMPAT quashes CCI order dismissing allegations of cartelisation and abuse of dominance against International Air Transport Association (IATA) and IATA- India. |

Competition Appellate Tribunal (COMPAT), New Delhi, in a landmark Order dated 15^th November, 2016, while allowing the appeal filed by the Air Cargo Agents Association of India (ACAAI) has set aside the order of the Competition Commission of India (CCI) dismissing allegations of fixing rate of commission payable to cargo agents by airlines, limiting and controlling the market and abuse of dominance against International Air Transport Association (IATA) and IATA-India.

CCI had initially referred the case filed by ACAAI in 2012 in which it had alleged both limiting and controlling the market and fixing rate of commission payable to cargo agents by airlines and abuse of dominance against International Air Transport Association (IATA) and IATA-India through IATA resolutions. The CCI found a prima facie case for violations of the Competition Act, 2002 (the Act) and referred the allegations for investigation to its investigating arm, the Director General (DG). The DG in its investigation report, while noticing that IATA resolutions did raise competition concerns, however, concluded that allegations of limiting and controlling the market and fixing rate of commission payable to cargo agents by airlines were not proved. CCI, agreeing with the DG investigation findings closed the case dismissing the allegations of only limiting and controlling the market and fixing rate of commission payable to cargo agents by airlines without taking any decision on the other allegation of abuse of dominance by IATA.

COMPAT, while remanding the matter for fresh investigation by the DG, ruled that the DG failed to furnish its findings on the allegation of abuse of dominance though made in the complaint. COMPAT, agreeing with the submissions made by the appellant counsels observed that CCI made a serious error by omitting to consider the plea of ACAAI to also investigate into the allegation of abuse of dominant position by IATA. The order has been set-aside with a direction to the DG to conduct a fresh investigation within 60 days.

The appellants, ACAAI were represented by Vaish Associates, Advocates through Mr. Jimmy Pochkhanawalla, Senior Advocate along with Mr. M.M. Sharma, Advocate, Head, Competition Law Practice, assisted by Ms. Deepika Rajpal, senior associate and Mr. Danish Khan, associate. IATA and IATA India were represented by Cyril Amarchand through Mr Rajshekhar Rao, Advocate and Mr. Bharat Budholia, Partner and his team.

COMMENT: The order represents an important development in jurisprudence in competition law. The COMPAT has laid down that CCI is required under law to decide on every allegations raised in a complaint even though it may have referred some of the other allegation(s) for investigation at prima facie stage. It may be noted that this order reiterates the settled jurisprudence laid down by the Supreme Court in the SAIL case.

Suggested Reading:

(i) Competition Commission of India (CCI) re-imposes penalty on 11 cement companies for cartelisation

(ii) COMPAT sets aside CCI’s penalty on Alkem Laboratories for indulging in anti-competitive practices-

(iii) CCI again fines Pharma Company for Anti-Competitive Activities

(iv) Bid-Rigging in Public Procurement: Some evolving trends in Indian Competition Law

(v) Competition Appellate Tribunal (COMPAT) directs Competition Commission of India (CCI) to re-consider penalties imposed on LPG manufacturers

(vi) COMPAT sets aside order against Cement Cartel

About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.