As per sub-section (5) of Section 19, such relevant market can be
relevant geographic market or relevant product market. The
factors which are to be kept in mind while determining the
relevant geographic market are stipulated in sub-section (6) of
Section 19 and the factors which need to be considered while
determining the relevant product market are prescribed in
sub-section (7) of Section 19. These two sub-sections read as
under:
“(6) The Commission shall, while determining the
“relevant geographic market', have due regard to
all or any of the following factors, namely:-
(a) regulatory trade barriers;
(b) local specification requirements;
(c) national procurement policies;
(d) adequate distribution facilities;
(e) transport costs;
(f) language;
(g) consumer preferences;
(h) need for secure or regular supplies or
rapid after-sales services.
(7) The Commission shall, while determining the
“relevant product market”, have due regard to all or
any of the following factors, namely:-
(a) physical characteristics or end-use of
goods;
(b) price of goods or service;
(c) consumer preferences;
(d) exclusion of in-house production;
(e) existence of specialised producers;
(f) classification of industrial products.”
It is for this reason, the first and foremost aspect that needs
determination is: 'What is the relevant market in which
competition is effected?”
31) Market definition is a tool to identify and define the boundaries of
competition between firms. It serves to establish the framework
within which competition policy is applied by the Commission.
The main purpose of market definition is to identify in a
systematic way the competitive constraints that the undertakings
involved face. The objective of defining a market in both its
product and geographic dimension is to identify those actual
competitors of the undertakings involved that are capable of
constraining those undertakings behaviour and of preventing
them from behaving independently of effective competitive
pressure.
Therefore, the purpose of defining the 'relevant market' is to
assess with identifying in a systematic way the competitive
constraints that undertakings face when operating in a market.
This is the case in particular for determining if undertakings are
competitors or potential competitors and when assessing the
anti-competitive effects of conduct in a market. The concept of
relevant market implies that there could be an effective
competition between the products which form part of it and this
presupposes that there is a sufficient degree of interchangeability
between all the products forming part of the same market insofar
as specific use of such product is concerned.
32) While identifying the relevant market in a given case, the CCI is
required to look at evidence that is available and relevant to the
case at hand. The CCI has to define the boundaries of the
relevant market as precisely as required by the circumstances of
the case. Where appropriate, it may conduct its competition
assessment on the basis of alternative market definitions. Where
it is apparent that the investigated conduct is unlikely to have an
adverse effect on competition or that the undertaking under
investigation does not possess a substantial degree of market
power on the basis of any reasonable market definition, the
question of the most appropriate market definition can even be
left open.
33) The relevant market within which to analyse market power or
assess a given competition concern has both a product
dimension and a geographic dimension. In this context, the
relevant product market comprises all those products which are
considered interchangeable or substitutable by buyers because of
the products' characteristics, prices and intended use. The
relevant geographic market comprises all those regions or areas
where buyers would be able or willing to find substitutes for the
products in question. The relevant product and geographic
market for a particular product may vary depending on the nature
of the buyers and suppliers concerned by the conduct under
examination and their position in the supply chain. For example,
if the questionable conduct is concerned at the wholesale level,
the relevant market has to be defined from the perspective of the
wholesale buyers. On the other hand, if the concern is to
examine the conduct at the retail level, the relevant market needs
to be defined from the perspective of buyers of retail products.
34) It is to be borne in mind that the process of defining the relevant
market starts by looking into a relatively narrow potential product
market definition. The potential product market is then expanded
to include those substituted products to which buyers would turn
in the face of a price increase above the competitive price.
Likewise, the relevant geographic market can be defined using
the same general process as that used to define the relevant
product market.
35) Bearing in mind the aforesaid considerations, we concur with the
conclusion of the Tribunal. It is the notion of 'power over the
market' which is the key to analysing many competitive issues.
Therefore, it becomes necessary to understand what is meant by
the relevant market. This concept is an economic one.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6691 OF 2014
COMPETITION COMMISSION OF INDIA
V
CO-ORDINATION COMMITTEE OF
ARTISTS AND TECHNICIANS OF W.B.
FILM AND TELEVISION AND ORS.
Dated:MARCH 07, 2017.
Citation:AIR 2017 SC 1449
This appeal raises an interesting and important question of
law touching upon the width and scope of jurisdiction of the
Competition Commission of India (for short, the ‘CCI’) under
Section 3 of the Competition Act, 2002 (hereinafter referred to as
the 'Act'). Before we mention the nuances of the issue that has
arisen for consideration, it would be apposite to take stock of the
background facts under which the issue needs determination, as
the factual canvass would provide clarity of the situation that has
led to the dispute between the parties. Respondent No. 2 herein,
Mr. Sajjan Kumar Khaitan, is the proprietor of M/s. Hart Video
having his establishment in Kolkata. He is in the business of
distributing video cinematographic TV serials and telecasting
regional serials in the States of Eastern India, which includes the
State of West Bengal. M/s. BRTV, Mumbai, which is the producer
of T.V. programmes, had produced T.V. Serial named
'Mahabharat', original version whereof was in Hindi. The said
BRTV entrusted the sole and exclusive rights of ‘Mahabharat’ to
M/s. Magnum T.V. Serials to dub the Hindi version of the said
serial in Bangla with further rights to exploit its Satellite, Pay TV,
DTH, IPTV, Video, Cable TV and internet rights till September,
2016. Magnum TV, in turn, appointed Hart Video as the
sub-assigner to dub the said serial 'Mahabharat' in Bangla
language, which it did. Thereafter, for the purposes of telecasting
the said dubbed serial, an agreement was executed for the time
slot, on revenue sharing basis, with M/s. Bengal Media Pvt. Ltd.,
Kolkata, which is the owner of 'Channel 10', as well as with M/s.
Calcutta Television Network Private Ltd., Kolkata, which is the
owner of CTVN+ Channel. These two channels were given hard
disks of four episodes of the serial on 2nd February, 2011 and 12th
February, 2011. An advertisement was placed in Daily
Newspapers on 19th February, 2011 informing the public at large
Civil Appeal No. 6691 of 2014 Page 2 of 41Page 3
that serial 'Mahabharat' would be telecast in Bangla on Channel
10 at 10.00 a.m. in the morning and on CTVN+ at 10.00 p.m.
every Sunday.
2) Certain producers in Eastern India have formed an association
called Eastern India Motion Picture Association (for short,
'EIMPA'). Likewise, the artists and technicians of film and
television industry in West Bengal have formed an association
known as 'Committee of Artists and Technicians of West Bengal
Film and Television Investors (hereinafter referred to as the
'Coordination Committee').
3) Telecasting of serial ‘Mahabharat’ in Bangla after dubbing it in the
said language from the original produced Hindi language was not
palatable to EIMPA or the Coordination Committee. In their
perception, serials produced in other languages and shown on the
T.V. Channels after dubbing them in Bangla would affect the
producers of that origin and, in turn, would also adversely affect
the artists and technicians working in West Bengal. The
apprehension was that it may deter production of such serials in
Bangla because of the entry of serials produced in other
languages and shown to the public by dubbing the same in their
language. Because of this reason, on 18th February, 2011 CTVN+
Civil Appeal No. 6691 of 2014 Page 3 of 41Page 4
received a letter from the Coordination Committee to stop the
telecast of the dubbed serial ‘Mahabharat’. Letter dated 1st
March, 2011 to the similar effect was written by EIMPA to CTVN+.
Identical demands were made to this Channel by the Coordination
Committee as well. It was stated in this letter that such a step
was necessary in the interest of healthy growth of film and
television industry in West Bengal. It was also alleged that for the
last thirteen years there was a convention and practice adopted in
the said region not to dub any programme from other languages
in Bangla and telecast them in West Bengal. Threat was also
extended to CTVN+ as well as Channel 10 that in case the
telecast is not stopped, their channels would face
non-cooperation from these two bodies, i.e., EIMPA and the
Coordination Committee.
4) When Mr. Sajjan Khaitan (Respondent No. 2), Proprietor of M/s.
Hart Video, came to know of the aforesaid developments and the
threat extended to CTVN+ and Channel 10 and found that these
two television channels were going to succumb to those
pressures, he informed the CCI of the aforesaid details and
requested the CCI to take action in the matter, as according to
him, the aforesaid act on the part of EIMPA as well as the
Coordination Committee contravened the provisions of the Act.
Even an interim relief was sought in the nature of direction from
CCI to CTVN+ and Channel 10 not to yield to the threats of
EIMPA and Coordination Committee and restart the telecast of the
serial which was stopped since 17th April, 2011. Hereafter,
Respondent No. 2 shall be described as the ‘informant’.
5) The CCI, after receiving the aforesaid information from the
informant formed a prima facie opinion that acts on the part of
EIMPA and Coordination Committee were anti-competitive.
Accordingly, matter was assigned to the Director General (DG) for
detailed investigation as per the procedure prescribed in the Act.
On investigation, the DG found that the details contained in the
information supplied by the informant were factually correct. On
that basis, he examined the matter in the context of provisions
contained in the Act.
6) In order to understand with clarity the task undertaken and
accomplished by the DG, we deem it proper to refer to some of
the relevant provisions of the Act at this stage. Chapter II of the
Act deals with 'prohibition of certain agreements, abuse of
dominant position and regulation of combinations'. It comprises
of Sections 3 to 6. Section 3 deals with anti-competitive
agreements and Section 4 prohibits the abuse of dominant
position. Section 5, on the other hand, takes care of those
acquisitions and mergers which have the potential to become
anti-competitive or attain dominant position, with threat to abuse
the said position in order to control such acquisition and mergers.
Section 6 empowers the CCI to regulate those combinations
which are stipulated under Section 5. Thus, this Chapter deals
with three kinds of practices which may be anti-competitive, viz.,
agreements which may turn out to be anti-competitive; abusive
use of dominant position by those enterprises or groups which
enjoy such dominant position as defined in the Act; and
regulations of combination of enterprises by means of mergers or
amalgamations so that they do not become anti-competitive or
abuse the dominant position which they can attain.
7) The scheme of this Chapter, therefore, is to ensure fair
competition by prohibiting trade practices which cause
appreciable adverse effects in competition in markets within India.
This task of curbing negative aspects of competition is assigned
to CCI. In the present case, since we are concerned with the
issue as to whether EIMPA and/or Coordination Committee
resorted to any anti-competitive agreement, it will be apposite to
scan through Section 3 of the Act and other provisions which
revolve there around. Section 3 reads as under :
“ 3. Anti-competitive agreements : (1) No enterprise
or association of enterprises or person or
association of persons shall enter into any
agreement in respect of production, supply,
distribution, storage, acquisition or control of goods
or provision of services, which causes or is likely to
cause an appreciable adverse effect on competition
within India.
(2) Any agreement entered into in
contravention of the provisions contained in
subsection (1) shall be void.
(3) Any agreement entered into between
enterprises or associations of enterprises or
persons or associations of persons or between any
person and enterprise or practice carried on, or
decision taken by, any association of enterprises or
association of persons, including cartels, engaged
in identical or similar trade of goods or provision of
services, which—
(a) directly or indirectly determines purchase
or sale prices;
(b) limits or controls production, supply,
markets, technical development, investment or
provision of services;
(c) shares the market or source of production
or provision of services by way of allocation of
geographical area of market, or type of goods or
services, or number of customers in the market or
any other similar way;
(d) directly or indirectly results in bid rigging or
collusive bidding, shall be presumed to have an
appreciable adverse effect on competition:
Provided that nothing contained in this sub-section
shall apply to any agreement entered into by way
of joint ventures if such agreement increases
efficiency in production, supply, distribution,
storage, acquisition or control of goods or provision
of services.
Explanation.—For the purposes of this sub-section,
“bid rigging” means any agreement, between
enterprises or persons referred to in sub-section (3)
engaged in identical or similar production or trading
of goods or provision of services, which has the
effect of eliminating or reducing competition for bids
or adversely affecting or manipulating the process
for bidding
(4) Any agreement amongst enterprises or
persons at different stages or levels of the
production chain in different markets, in respect of
production, supply, distribution, storage, sale or
price of, or trade in goods or provision of services,
including—
(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance,
shall be an agreement in contravention of
sub-section (1) if such agreement causes or is
likely to cause an appreciable adverse effect on
competition in India.
Explanation.—For the purposes of this sub-section,
—
(a) “tie-in arrangement” includes any
agreement requiring a purchaser of goods, as a
condition of such purchase, to purchase some
other goods;
(b) “exclusive supply agreement” includes any
agreement restricting in any manner the purchaser
in the course of his trade from acquiring or
otherwise dealing in any goods other than those of
the seller or any other person;
(c) “exclusive distribution agreement” includes
any agreement to limit, restrict or withhold the
output or supply of any goods or allocate any area
or market for the disposal or sale of the goods;
(d) “refusal to deal” includes any agreement
which restricts, or is likely to restrict, by any method
the persons or classes of persons to whom goods
are sold or from whom goods are bought;
(e) “resale price maintenance” includes any
agreement to sell goods on condition that the
prices to be charged on the resale by the
purchaser shall be the prices stipulated by the
seller unless it is clearly stated that prices lower
than those prices may be charged.
(5) Nothing contained in this section shall
restrict— (i) the right of any person to restrain any
infringement of, or to impose reasonable
conditions, as may be necessary for protecting any
of his rights which have been or may be conferred
upon him under—
(a) the Copyright Act, 1957 (14 of 1957);
(b) the Patents Act, 1970 (39 of 1970);
(c) the Trade and Merchandise Marks Act,
1958 (43 of 1958) or the Trade Marks Act, 1999
(47 of 1999);
(d) the Geographical Indications of Goods
(Registration and Protection) Act, 1999 (48 of
1999); (e) the Designs Act, 2000 (16 of 2000); \
(f) the Semi-conductor Integrated Circuits
Layout-Design Act, 2000 (37 of 2000);
(ii) the right of any person to export goods
from India to the extent to which the agreement
relates exclusively to the production, supply,
distribution or control of goods or provision of
services for such export. ”
8) As can be seen from the bare reading of the aforesaid provision,
sub-section (1) of Section 3 puts an embargo on an enterprise or
association of enterprises or person or association of persons
from entering into any agreement in respect of production, supply,
distribution, storage, acquisition or control of goods or provisions
of services which causes or is likely to cause an appreciable
adverse effect on competition within India. Thus, agreements in
respect of distribution or provisions of services, if they have
adverse effect on competition, are prohibited and treated as void
by virtue of sub-section (2). Sub-section (3), with which we are
directly concerned, stipulates four kinds of agreements which are
presumed to have appreciable adverse effect on competition.
Therefore, if a particular agreement comes in any of the said
categories, it is per se treated as adversely effecting the
competition to an appreciable extent and comes within the
mischief of sub-section (1). There is no further need to have
actual proof as to whether it has caused appreciable effect on
competition. Proviso thereto, however, exempts certain kinds of
agreements, meaning thereby if a particular case falls under the
proviso, then such a presumption would not be applicable.
9) We have already mentioned in brief the contents of letters which
were written by EIMPA and the Coordination Committee to the
Channel 10 and CTVN+. The DG was to investigate as to
whether this ‘agreement’ falls within the four corners of Section
3(3)(b) of the Act, namely, whether it limits or controls production,
supply, markets, technical development, investment or provisions
of services.
10) Section 2(b) defines 'agreement' and reads as under:
“2(b) “agreement” includes any arrangement or
understanding or action in concert,—
(i) whether or not, such arrangement,
understanding or action is formal or in writing; or
ii) whether or not such arrangement,
understanding or action is intended to be
enforceable by legal proceedings ;”
11) Definitions of certain other expressions and terms which are
required to be noted are as follows:
“2 (l)“person” includes—
(i) an individual;
(ii) a Hindu undivided family;
(iii) a company;
(iv) a firm;
(v) an association of persons or a body of
individuals, whether incorporated or not, in India or
outside India; or
(vi) any corporation established by or under
any Central, State or Provincial Act or a
Government company as defined in section 617 of
the Companies Act, 1956 (1 of 1956);
(vii) any body corporate incorporated by or
under the laws of a country outside India;
(viii) a co-operative society registered under any
law relating to cooperative societies;
(ix) a local authority;
(x) every artificial juridical person, not falling
within any of the preceding sub-clauses.”
xx xx xx
2(m) “practice” includes any practice relating to
the carrying on of any trade by a person or an
enterprise;
xx xx xx
2(r) “relevant market” means the market which
may be determined by the Commission with
reference to the relevant product market or the
relevant geographic market or with reference to
both the markets ;
2(s) “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 neighbouring
areas;
2(t) “relevant product market” 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;
2(u) “service” means service of any description
which is made available to potential users and
includes the provision of services in connection
with business of any industrial or commercial
matters such as banking, communication,
education, financing, insurance, chit funds, real
estate, transport, storage, material treatment,
processing, supply of electrical or other energy,
boarding, lodging, entertainment, amusement,
construction, repair, conveying of news or
information and advertising;
xx xx xx
2(x) “trade” means any trade, business, industry,
profession or occupation relating to the production,
supply, distribution, storage or control of goods and
includes the provision of any services; ”
12) At this stage, we would like to refer to Section 19 of the Act which
permits the CCI to conduct an enquiry into certain kinds of
agreements and dominant position of enterprise. Sub-section (1)
of Section 19 empowers the Commission to inquire into any
alleged contravention of the provisions contained in sub-section
(1) of Section 3 (i.e. anti-competitive agreements) or sub-section
(1) of Section 4 (i.e. abuse of dominant position). Sub-section (3)
deals with the factors which have to be kept in mind by the CCI
while undertaking an inquiry into anti-competitive agreements and
reads as under:
“19(3) The Commission shall, while determining
whether an agreement has an appreciable adverse
effect on competition under section 3, have due
regard to all or any of the following factors, namely:
(a) creation of barriers to new entrants in the
market;
(b) driving existing competitors out of the
market;
(c) foreclosure of competition by hindering
entry into the market;
(d) accrual of benefits to consumers;
(e) improvements in production or distribution
of services; of goods or provision
(f) promotion of technical, scientific and
economic development by means of production or
distribution of goods or provision of services.
13) Since the appreciable adverse effect on competition has to be
seen in the context of 'relevant market' as defined under Section
2(r) of the Act (already reproduced above), sub-section (5) of
Section 19 stipulates that in order to determine whether a market
constitutes a 'relevant market' for the purposes of this Act, CCI
shall have due regard to the 'relevant geographic market’, and
'relevant product market'. The factors which are to be taken into
account while determining relevant geographic market are
mentioned in sub-section (6) of Section 19. Likewise, the factors
which are to be taken into consideration while determining the
relevant product market are stipulated in sub-section (7) of
Section 19.
14) Having noticed the relevant provisions postulating the scheme
qua prohibited anti-competitive agreements, on the basis of which
investigation is to be made by the DG, the first aspect was to
determine as to what would be the 'relevant market'. The DG, in
his report submitted to the CCI, opined that in the instant case
'relevant market' would be the 'film and television industry of West
Bengal'. He further recorded that the Coordination Committee
consisted of persons or association of persons who were dealing
with identical market of film making. In his opinion any agreement
of joint action taken by the constituents, being in the nature of
horizontal agreement, could be examined under the provisions of
Section 3(3) of the Act. The impugned action of the Coordination
Committee and EIMPA threatening non-cooperation in case
telecast of the serials was not stopped and holding
demonstrations as well as organising strike, which resulted in
actually stopping the telecast of the serial by Channel 10 (though
CTVN+ continued to telecast), amounted to restricting its
commercial exploitation and was, therefore, unjustified. He found
that following conduct of the Coordination Committee specifically
contravened the provisions of the Act:
“a. Act of the Co-ordination Committee writing
a letter on 18.02.2011 to CCTVN Plus Channel
asking it to stop the telecasting of Mahabharata
serial.
b. Further, act of the Co-ordination Committee
writing a letter on 01.03.2011 to Channel 10 and
letters on 11.03.2011, 12.03.2011 and 14.03.2011
to CTVN Plus Channel asking them to stop the
telecast of Mahabharata serial.
c. Observance of one-day work stoppage on
07.04.2011 against telecast of the Mahabharata
serial by the members of all the constituents of
Co-ordination Committee and demonstration on the
same day from 11.00AM to 02.00PM at Rani
Rasoni Road in Kolkata.
d. The Co-ordination Committee approached
Shri Mithun Chakraborty, the leading actor of Indian
Film Industry and the Chief Adviser of Channel 10
and finally succeeded in getting the telecast of
Mahabharata stopped by Channel 10.”
15) The DG concluded that the action on the part of Coordination
Committee had resulted in foreclosure of competition by hindering
entry into the market. The DG also held that by not allowing the
dubbed version of the serial, the Coordination Committee
foreclosed the business opportunities for the businessmen
engaged in the production, distribution, and exhibition, telecast of
such programmes. The DG, therefore, concluded that the actions
on the part of EIMPA and Coordination Committee were in
violation of the provisions of Section 3(3)(b) of the Act, since they
restricted and controlled the market and supply of dubbed
versions of serials on the Television Channels through collective
intent of all the constituents/associations coming together on one
platform.
16) Certain fundamental objections were taken by the Coordination
Committee as well as EIMPA touching upon the jurisdiction of the
DG to inquire into the matter as according to them the inquiry was
beyond the scope of the Act. In nutshell, it was argued:
(a) The Coordination Committee comprised of artists and
technicians of West Bengal Film and T.V. Industry and consisted
of West Bengal Motion Picture Artists' Forum and Federation of
Cine Technicians and Workers of Eastern India only. The other
members like WATP, ATA and EIMPA were not in the Coordination
Committee. It was, in fact, a trade union of the artisans and
technicians under the Trade Union Act. Therefore, the
Coordination Committee was not an 'enterprise'.
Likewise, it was not a ‘person or ‘association of persons’
who were in the business of production, supply and distribution or
providing services etc. Therefore, their act would not fall under
Section 3(1) of the Act.
(b) It was argued that the Coordination Committee was not in a
position to control production programming marketing and
uplinking of any serial in the satellite channel and, therefore,
provisions of the Act would not apply to it.
(c) According to the Coordination Committee, the action which
they had taken was in the form of an agitation against the telecast
of Hindi serial after dubbing the same into Bangla in order to
safeguard the interest of its members. It was their constitutional
right to lodge such protests under Article 19(1)(a) of the
Constitution of India.
17) The DG, however, did not get convinced with the aforesaid
defence put by the Coordination Committee and found that the
agitation of the Coordination Committee was uncalled for
inasmuch as there was a huge potential of local film artists, and
the industry was not likely to suffer on account of the dubbed
serials shown on the said channels. He also found the industry of
television channels in Bangla was growing by leaps and bounds
and, therefore, argument of the Coordination Committee was not
based on facts. Thus, their action was held to be unjustified, as it
had resulted in foreclosure on competition by entering into the
market as well as foreclosure of business opportunities for the
businessmen engaged in the production, distribution and
exhibition/telecast of such programmes. This, according to him,
came within the mischief of Section 3(3)(b) of the Act.
18) Against the aforesaid report of the DG, being adverse to the
Coordination Committee as well as EIMPA, both of them
preferred their objections before the CCI. These objections were
almost on the same lines which were taken before the DG and,
therefore, it is not necessary to repeat the same at this stage
inasmuch as we would be turning to the stand of the Coordination
Committee at the appropriate stage, in any case.
19) The CCI, after scanning through those objections, formulated two
questions which according to it fell for consideration. These are:
Issue 1
Whether EIMPA and Co-ordination Committee
imposed/attempted to impose restrictions on the telecast of
dubbed serial ‘Mahabharat’?
Issue 2
Whether the act and conduct of imposing restrictions
on telecast of the said serial is in violation of provisions of
the Act?
20) The CCI gave a fractured verdict on the aforesaid issues. As per
the majority, the complainant was able to give clinching evidence
thereby proving both the issues. The majority held that Channel
10 stopped the telecast of serial as a direct consequence of the
threats extended to it by EIMPA as well as Coordination
Committee through their various letters coupled with the
agitations and demonstration held by them. In this manner,
pressures were exerted on both Channel 10 and CTVN+ not to
telecast the dubbed serial, though as far as CTVN+ is concerned
it did not succumb to such a pressure. But Channel 10 gave in by
discontinuing the telecast of the serial. In this manner, first issue
was decided in the affirmative.
Taking up the second issue, the majority members held that
since the Coordination Committee was not an 'enterprise',
question of breach of Section 4 did not arise. However, the
activities of the Coordination Committee fell within the ambit of
Section 3 of the Act and violated that provision since it had
adverse effect on competition. It accepted that the Coordination
Committee (and for that matter even EIMPA) were trade unions.
Notwithstanding, they were not exempted from the purview of the
Act. Qua the Coordination Committee specifically, the CCI was
influenced by the fact that even when bodies like WATP, ATA and
EIMPA were not members of the Coordination Committee, still it
was found that the Coordination Committee takes the measures
in consultation with these associations and, therefore, the
Coordination Committee must be deemed to be comprised of all
the five members.
21) Judicial member in the CCI put discordant note as he differed
from the majority opinion. According to him, first mistake
committed by the DG was that he did not identify the 'relevant
market' correctly. According to him, 'relevant market' was
'broadcast of TV serial' and not 'Film and TV Industry of West
Bengal' as found by the DG. After identifying the relevant market
as broadcast of TV serials, learned member opined that
broadcast of TV serials took place either by way of Direct to
Home Services (DTH) or through Cable and, therefore,
broadcasting service is altogether a separate market, different
from production, exhibition and distribution of films. Insofar as the
two channels, namely, CTVN+ and Channel 10 are concerned,
they were in the market for telecasting programmes for the
viewers of the DTH category or Cable TV category and were not
in production, distribution or exhibition of dubbed films. According
to the minority view, since the offending parties, i,e., Coordination
Committee and EIMPA, were not active in the relevant market of
broadcast of dubbed TV serials, there was no question of any
violation of any provisions of the Act. It was further held that
Section 3 of the Act does not take into its fold coercive actions
taken by workers' union affecting the various facets or products or
service market, affecting production, distribution and supply of
goods or services. It was accepted that, as a matter of fact, the
Coordination Committee as well as EIMPA had put pressure on
these channels from broadcasting the dubbed TV serial in
question through various means. However, it could not be treated
as an economic pressure. It was an act of trade union putting
such pressures which was outside the domain of the Act and not
an 'agreement' amongst the enterprises, active in the same
relevant market, which resulted in discontinuing the telecast of
dubbed serials. Further, the TV channels were at liberty to ignore
such coercive facts. The minority opinion went to the extent of
expressing that right to hold dharnas, boycotts, strikes etc. was
fundamental right of any trade union guaranteed under Article
19(1)(a) of the Constitution which could not be taken away by the
Act, unless it is shown that the offending parties were involved in
economic activities in the same 'relevant market' and they had
entered into an 'agreement' which finds foul with the provisions of
Section 3 of the Act.
22) Significantly, it is only the Coordination Committee which
preferred the appeal before the Competition Appellate Tribunal
(hereinafter referred to as the 'Tribunal'). EIMPA, by its conduct,
accepted the majority decision of the CCI. It is for this reason the
Tribunal did not go into the issue with reference to EIMPA. It
discussed the stand of the Coordination Committee and
deliberated itself confining to the activities of the Coordination
Committee to find out whether majority view of CCI was correct in
law. By the impugned judgment, it has held otherwise thereby
setting aside the majority view and accepting the minority opinion
of the CCI resulting into allowing the appeal of the Coordination
Committee and holding that there is no contravention of Section 3
of the Act which could not even be invoked on the facts of this
case. In the first place, the Tribunal has affirmed the opinion of
the dissenting member of the CCI on the question of 'relevant
market' by holding that it was not the ‘Film and Television Industry
in the State of West Bengal’, but the relevant market was the
‘telecasting of the dubbed serial on television in West Bengal’.
Thereafter, the Tribunal took note of the provisions of Section 3(3)
of the Act and concluded that the Coordination Committee was
not trading in any groups, or provisions of any services, much
less by the persons engaged in identical or similar trade or
provisions of services. Therefore, it could not be said that there
was any 'agreement' as envisaged in Section 3 entered into.
According to the Tribunal, Section 3(3)(b) of the Act applies to the
competitors who would be in the same line of commercial activity
and by their agreement tend to restrict the competition. No
evidence to this effect was available in the instant case. It was
merely a protest of the Coordination Committee voicing its
grievance for the benefit of its members and even if such a move
on the part of the Coordination Committee was wrong and even if
its agitation was influenced by foul play in projecting that
exhibiting dubbed TV serial would affect their prospects of getting
further work, that by itself would not become a competition issue
covered by the Act.
23) Challenging the aforesaid view of the Tribunal, Mr. Chandhiok,
learned senior advocate appearing for the CCI, referred to the
various provisions of the Act and also extensively read out from
the exercise undertaken by the DG and the majority view of the
CCI. His submission was that exercise undertaken by the DG
and approved by the CCI in its majority decision was correct in
law. He questioned the manner in which 'relevant market' has
been assigned limited sphere as, according to him, the matter
related to film and television industry of the State of West Bengal
and the concerted action of the Coordination Committee was to
obviously effect the competitiveness in the entire film and
television industry of the State of West Bengal. He also read out
various definitions from the Act, which we have already
reproduced above. His submission was that the definition of
'agreement' contained in Section 2(b) had a much wider
connotation and any such agreement which was anti-competitive
in nature between persons or association of persons was hit by
Section 3.
24) Learned counsel appearing for the Coordination Committee, on
the other hand, heavily relied upon the impugned judgment and
submitted that the conclusion drawn therein was correct in law as
the Coordination Committee, which was in the nature of a trade
union, and not in the business of production, supply, distribution,
storage, acquisition or control of goods or provision of services,
could not be covered within the scope of Section 3 of the Act. He
also submitted that the action on the part of the Coordination
Committee had nothing to do with the competition and it was the
fundamental right of the Coordination Committee, as a trade
union, to lodge legitimate protest. He submitted that even if in this
protest the Coordination Committee had exceeded the limits, that
may be an action actionable under any other law but would not
fall within the domain of Competition Law.
25) We have given our due consideration to the respective
submissions and have minutely gone through the orders passed
by various authorities, glimpse whereof is already reflected
above.
26) Two fundamental aspects which need determination are:
(i) What is the 'relevant market' for the purposes of inquiry into
the impugned activity of the Coordination Committee? and
(ii) Whether the action and conduct of the Coordination
Committee is covered by the provisions of Section 3 of the Act?
27) Before we discuss the aforesaid questions, it would be necessary
to clear the air on some of the fundamental aspects relating to the
Act.
28) The Competition Act of 2002, as amended in 2007 and 2009,
deals with anti-trust issues, viz. regulation of anti-competitive
agreements, abuse of dominant position and a combination or
acquisition falling within the provisions of the said Act. Since the
majority view of the CCI also accepted that the impugned
activities of the Coordination Committee did not amount to abuse
of dominant position, and it treated the same as anti-competitive
having appreciable adverse effect on competition, our discussion
would be focused only on anti-competitive agreements. Section 3
of the Act is the relevant section in this behalf. It is intended to
curb or prohibit certain agreements. Therefore, in the first
instance, it is to be found out that there existed an ‘agreement’
which was entered into by enterprise or association of enterprises
or person or association of persons. Thereafter, it needs to be
determined as to whether such an agreement is anti-competitive
agreement within the meaning of the Act. Once it is found to be
so, other provisions relating to the treatment that needs to be
given thereto get attracted.
29) While inquiring into any alleged contravention, whether by the
Commission or by the DG, and determining whether any
agreement has an appreciable adverse effect on competition
under Section 3, factors which are to be taken into consideration
are mentioned in sub-section (3) of Section 19, which are as
follows:
“19. Inquiry into certain agreements and
dominant position of enterprise. –
xx xx xx
(3) The Commission shall, while determining
whether an agreement has an appreciable adverse
effect on competition under section 3, have due
regard to all or any of the following factors,
namely:-
(a) creation of barriers to new entrants in the
market;
(b) driving existing competitors out of the
market;
(c) foreclosure of competition by hindering
entry into the market;
(d) accrual of benefits to consumers;
(e) improvements in production or distribution
of goods or provision of services;
(f) promotion of technical, scientific and
economic development by means of
production or distribution of goods or provision
of services.
xx xx xx”
30) The word 'market' used therein has reference to 'relevant market'.
As per sub-section (5) of Section 19, such relevant market can be
relevant geographic market or relevant product market. The
factors which are to be kept in mind while determining the
relevant geographic market are stipulated in sub-section (6) of
Section 19 and the factors which need to be considered while
determining the relevant product market are prescribed in
sub-section (7) of Section 19. These two sub-sections read as
under:
“(6) The Commission shall, while determining the
“relevant geographic market', have due regard to
all or any of the following factors, namely:-
(a) regulatory trade barriers;
(b) local specification requirements;
(c) national procurement policies;
(d) adequate distribution facilities;
(e) transport costs;
(f) language;
(g) consumer preferences;
(h) need for secure or regular supplies or
rapid after-sales services.
(7) The Commission shall, while determining the
“relevant product market”, have due regard to all or
any of the following factors, namely:-
(a) physical characteristics or end-use of
goods;
(b) price of goods or service;
(c) consumer preferences;
(d) exclusion of in-house production;
(e) existence of specialised producers;
(f) classification of industrial products.”
It is for this reason, the first and foremost aspect that needs
determination is: 'What is the relevant market in which
competition is effected?”
31) Market definition is a tool to identify and define the boundaries of
competition between firms. It serves to establish the framework
within which competition policy is applied by the Commission.
The main purpose of market definition is to identify in a
systematic way the competitive constraints that the undertakings
involved face. The objective of defining a market in both its
product and geographic dimension is to identify those actual
competitors of the undertakings involved that are capable of
constraining those undertakings behaviour and of preventing
them from behaving independently of effective competitive
pressure.
Therefore, the purpose of defining the 'relevant market' is to
assess with identifying in a systematic way the competitive
constraints that undertakings face when operating in a market.
This is the case in particular for determining if undertakings are
competitors or potential competitors and when assessing the
anti-competitive effects of conduct in a market. The concept of
relevant market implies that there could be an effective
competition between the products which form part of it and this
presupposes that there is a sufficient degree of interchangeability
between all the products forming part of the same market insofar
as specific use of such product is concerned.
32) While identifying the relevant market in a given case, the CCI is
required to look at evidence that is available and relevant to the
case at hand. The CCI has to define the boundaries of the
relevant market as precisely as required by the circumstances of
the case. Where appropriate, it may conduct its competition
assessment on the basis of alternative market definitions. Where
it is apparent that the investigated conduct is unlikely to have an
adverse effect on competition or that the undertaking under
investigation does not possess a substantial degree of market
power on the basis of any reasonable market definition, the
question of the most appropriate market definition can even be
left open.
33) The relevant market within which to analyse market power or
assess a given competition concern has both a product
dimension and a geographic dimension. In this context, the
relevant product market comprises all those products which are
considered interchangeable or substitutable by buyers because of
the products' characteristics, prices and intended use. The
relevant geographic market comprises all those regions or areas
where buyers would be able or willing to find substitutes for the
products in question. The relevant product and geographic
market for a particular product may vary depending on the nature
of the buyers and suppliers concerned by the conduct under
examination and their position in the supply chain. For example,
if the questionable conduct is concerned at the wholesale level,
the relevant market has to be defined from the perspective of the
wholesale buyers. On the other hand, if the concern is to
examine the conduct at the retail level, the relevant market needs
to be defined from the perspective of buyers of retail products.
34) It is to be borne in mind that the process of defining the relevant
market starts by looking into a relatively narrow potential product
market definition. The potential product market is then expanded
to include those substituted products to which buyers would turn
in the face of a price increase above the competitive price.
Likewise, the relevant geographic market can be defined using
the same general process as that used to define the relevant
product market.
35) Bearing in mind the aforesaid considerations, we concur with the
conclusion of the Tribunal. It is the notion of 'power over the
market' which is the key to analysing many competitive issues.
Therefore, it becomes necessary to understand what is meant by
the relevant market. This concept is an economic one.
36) In the instant case, the geographic market is the State of West
Bengal and to this extent there is no quarrel inasmuch as
activities of the Coordination Committee were limited to the said
State. The dispute is as to whether relevant market would cover
‘broadcast of TV serial’ or it would take within its sweep ‘film and
TV industry of the State of West Bengal’. TV serial in question
was produced in Hindi. It was thereafter dubbed in Bangla.
When the two channels, namely CTVN+ and Channel 10, decided
to broadcast this TV serial in dubbed form, i.e. in Bangla
language, this move was opposed by the Coordination Committee
and EIMPA. The Tribunal has upheld the minority view of CCI in
saying that nature of the information does not show anything
which could even be distinctly connected with the whole 'film and
television industry in the State of West Bengal'. The information
is only against showing the dubbed serial on the television and it
has no relation whatsoever with production, distribution, etc. of
any film or any other material on the TV channels.
We feel that this is a myopic view taken by the Tribunal
which ignores many other vital aspects of this case, most
important being the width of the effect of the aforesaid cause on
which the agitation was led by the Coordination Committee. The
effect is not limited to the telecast or broadcast of the television
serial. No doubt, the Coordination Committee was against the
‘broadcast of the television serial ‘Mahabharat’ on the aforesaid
two channels, in the dubbed form. However, even as per the
agitators, the said broadcast was going to adversely affect the TV
and Film Industry of West Bengal and the alleged purport behind
the threats was to save the entire TV and Film Industry. The
Coordination Committee itself mentioned so in its letter dated
February 18, 2012 as under:
“We came to know that you are publicizing in your
channel that Bengali dubbed version of
“Mahabharat” will be telecasted in your channel,
shortly this is for your kind information that the
whole TV and Film Industry had fought back
ruthlessly against telecast of Bengali dubbed
versions of Hindi serials in DD-1 slot in 1997 and
since that agitation DD National Network has
stopped telecasting any Bengali dubbed version of
Hindi programs. At the same time, it is to be noted
that the film industry was also successful in
debarring the release of Bengali dubbed version of
Hindi Movie “Luv Kush” produced by Mr. Dilip
Kankaria of Deluxe Films in the year 1997.
We have done this to stop withering away of the
prestigious and internationally acclaimed
Bengali Film and Television Industry, thereby
creating job for artistes, workers and allied
people associated with this industry.
Hence we would request you to stop telecast of
dubbed Bengali version of “Mahabharat” in your
channel.
(emphasis added)”
37) The relevant market was, therefore, not limited to the
broadcasting of the channel but entire film and television industry
of West Bengal. Whether it was the misgiving of the Coordination
Committee that telecast of dubbed version of ‘Mahabharat’ is
going to affect Bengali film and television industry or it was a
genuine concern, is not the relevant factor while defining the
‘relevant market’1
. It is the sweep of the aforesaid action which is
1 It may be observed that majority view of CCI has rejected the plea of the Coordination
Committee as well as EIMPA that allowing the dubbed film will take away jobs from Bengali
artistes according to CCI: “If the Bengali films and TV serials are preferred over the non-Bengali
content as a result of competitive process, ultimately the Bengali artists will get benefited. The
to be considered. Even in the perception of the Coordination
Committee, telecast of Bengali dubbed version of ‘Mahabharat’
was going to affect the whole Television and Film Industry. In
view thereof, it was hardly a matter of debate as to what would be
the relevant market.
38) With this we advert to the central issue that bogs the parties,
namely, whether the activities in which the Coordination
Committee indulged in can be treated as 'agreement' for the
purpose of Section 3 of the Act.
39) At the outset, it may be noticed that the entities which are roped
in, whose agreements can be offending, are enterprise or
association of enterprises or person or association of persons or
where the agreement is between any person and an enterprise.
The expression 'enterprise' may refer to any entity, regardless of
its legal status or the way in which it was financed and, therefore,
it may include natural as well as legal persons. This statement
gets further strengthened as the agreement entered into by a
'person' or 'association of persons' are also included and when it
is read with the definition of 'person' mentioned in Section 2(l) of
protectionist policies which are being followed will not come to the aid of Bengali artistes, if on
content they cannot compete. Such policies are anti-thesis of the principles of free market.”
the Act. Likewise, definition of 'agreement' under Section 2(b) is
also very widely worded. Not only it is inclusive, as the word
'includes' therein suggests that it is not exhaustive, but also any
arrangement or understanding or even action in concert is termed
as 'agreement'. It is irrespective of the fact that such
arrangement or understanding is formal or informal and the same
may be oral as well and it is not necessary that the same is
reduced in writing or whether it is intended to be enforceable by
legal proceedings or not. Therefore, the Coordination Committee
would be covered by the definition of ‘person’. However, what is
important is that such an ‘agreement’, referred to in Section 3 of
the Act has to relate to an economic activity which is central to the
concept of Competition Law. Economic activity, as is generally
understood, refers to any activity consisting of offering products in
a market regardless of whether the activities are intended to earn
a profit. Some examples may be given which would not be
covered by Section 3(3) of the Act. An individual acting as a final
consumer is not an enterprise or a person envisaged, as he is not
carrying on an economic activity. We may also mention that the
European Union Competition Law recognises that an entity
carrying on an activity that has an exclusively social function and
is based on the principle of solidarity is not likely to be treated as
carrying on an economic activity so as to qualify the expressions
used in Section 3. The reason is obvious. The 'agreement' or
'concerted practice' is the means through which enterprise or
association of enterprises or person or association of persons
restrict competition. These concepts translate the objective of
Competition Law to have economic operators determine their
commercial policy independently. Competition Law is aimed at
frowning upon the activities of those undertakings (whether
natural persons or legal entities) who, while undertaking their
economic activities, indulge in practices which effect the
competition adversely or take advantage of their dominant
position.
40) The notion of enterprise is a relative one. The functional
approach and the corresponding focus on the activity, rather than
the form of the entity may result in an entity being considered an
enterprise when it engages in some activities, but not when it
engages in others. The relativity of the concept is most evident
when considering activities carried out by non-profit-making
organisations or public bodies. These entities may at times
operate in their charitable or public capacity but may be
considered as undertakings when they engage in commercial
activities. The economic nature of an activity is often apparent
when the entities offer goods and services in the marketplace and
when the activity could, potentially, yield profits. Thus, any entity,
regardless of its form, constitutes an 'enterprise' within the
meaning of Section 3 of the Act when it engages in economic
activity. An economic activity includes any activity, whether or not
profit making, that involves economic trade.
41) In the instant case, admittedly the Coordination Committee, which
may be a ‘person’ as per the definition contained in Section 2(l) of
the Act, is not undertaking any economic activity by itself.
Therefore, if we were to look into the ‘agreement’ of such a
‘person’, i.e. Coordination Committee, it may not fall under
Section 3(1) of the Act as it is not in respect of any production,
supply, distribution, storage, acquisition or control of goods or
provision of services. The Coordination Committee, which is a
trade union acting by itself, and without conjunction with any
other, would not be treated as an ‘enterprise’ or the kind of
'association of persons' described in Section 3. A trade union
acts as on behalf of its members in collective bargaining and is
not engaged in economic activity. In such circumstances, had the
Coordination Committee acted only as trade unionists, things
would have been different. Then, perhaps, the view taken by the
Tribunal could be sustained. However, what is lost in translation
by the Tribunal i.e. in applying the aforesaid principle of the
activity of the trade union, is a very pertinent and significant fact,
which was taken note of by the DG as well as the CCI in its
majority opinion. It is this: The Coordination Committee (or for
that matter even EIMPA) are, in fact, association of enterprises
(constituent members) and these members are engaged in
production, distribution and exhibition of films. EIMPA is an
association of film producers, distributors and exhibitors,
operating mainly in the State of West Bengal. Likewise, the
Coordination Committee is the joint platform of Federation of
Senior Technician and Workers of Eastern India and West Bengal
Motion Pictures Artistes Forum. Both EIMPA as well as the
Coordination Committee acted in a concerted and coordinated
manner. They joined together in giving call of boycott of
competing members i.e. the informant in the instant case and,
therefore, matter cannot be viewed narrowly by treating
Coordination Committee as a trade union, ignoring the fact that it
is backing the cause of those which are ‘enterprises’. The
constituent members of these bodies take decision relating to
production or distribution or exhibition on behalf of the members
who are engaged in the similar or identical business of
production, distribution or exhibition of the films. Decision of
these two bodies reflected collective intent of the members.
When some of the members are found to be in the production,
distribution or exhibition line, the matter could not have been
brushed aside by merely giving it a cloak of trade unionism. For
this reason, the argument predicated on the right of trade union
under Article 19, as professed by the Coordination Committee, is
also not available.
42) When the lenses of the reasoning process are duly adjusted with
their focus on the picture, the picture gets sharpened and
haziness disappears. One can clearly view that prohibition on the
exhibition of dubbed serial on the television prevented the
competing parties in pursuing their commercial activities. Thus,
the CCI rightly observed that the protection in the name of the
language goes against the interest of the competition, depriving
the consumers of exercising their choice. Acts of Coordination
Committee definitely caused harm to consumers by depriving
them from watching the dubbed serial on TV channel; albeit for a
brief period. It also hindered competition in the market by barring
dubbed TV serials from exhibition on TV channels in the State of
West Bengal. It amounted to creating barriers to the entry of new
content in the said dubbed TV serial. Such act and conduct also
limited the supply of serial dubbed in Bangla, which amounts to
violation of the provision of Section 3(3)(b) of the Act.
43) Resultantly, the instant appeal of CCI stands allowed.
No costs.
.............................................J.
(A.K. SIKRI)
.............................................J.
(ABHAY MANOHAR SAPRE)
NEW DELHI;
MARCH 07, 2017.
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