By way of judgment dated
Background
The informant (an independent law practitioner) had initially filed an Information before the Commission alleging that the online cab aggregators Ola and
The Commission closed the case under Section 26(2) of the Competition Act, 2002 (“the Act”), without calling for any response from either
The informant, being aggrieved by the Commission's decision filed an appeal before the NCLAT levelling allegations of price fixing in contravention of Section 3 and price discrimination in contravention of Section 4 by Ola and
Submissions on locus standi
It was submitted by Ola that the Informant is not an aggrieved person and that no prejudice has been caused to him and on the basis of foreign law, an inquiry initiated in a foreign jurisdiction cannot be basis for interfering with the impugned order nor can same be done on the basis of opinion of authors of some article in foreign journals. On the other hand, the informant contended that 'Informant' falls within the definition of “any person” under Section 19(1)(a) of the Act which includes an individual who can file an information virtually like an F.I.R in a criminal case can be filed by anybody.
NCLAT Decision
Issue of Locus standi
The NCLAT on the issue of locus noted:
“ The question that arises for consideration is whether a 'person' would mean any natural person irrespective of he being a consumer who has suffered invasion of his legal rights or a person whose legal rights have been or are likely to be jeopardised by the alleged anti-competitive agreement or abuse of dominant position. It is true that the concept of locus standi has been diluted to some extent by allowing public interest litigation, class action and actions initiated at the hands of consumer and trade associations. Even the whistle blowers have been clothed with the right to seek redressal of grievances affecting public interest by enacting a proper legal framework. However, the fact remains that when a statute like the Competition Act specifically provides for the mode of taking cognizance of allegations regarding contravention of provisions relating to certain anti-competitive agreement and abuse of dominant position by an enterprise in a particular manner and at the instance of a person apart from other modes viz. suo motu or upon a reference from the competitive government or authority, reference to receipt of any information from any person in section 19(1) (a) of the Act has necessarily to be construed as a reference to a person who has suffered invasion of his legal rights as a consumer or beneficiary of healthy competitive practices. Any other interpretation would make room for unscrupulous people to rake issues of anti-competitive agreements or abuse of dominant position targeting some enterprises with oblique motives.”
Accordingly, the NCLAT held that there was nothing on record to show that the informant has suffered a legal injury at the hands of Ola and
On Merits
Even after holding that the informant had no locus, the NCLAT dismissed the appeal on the basis of merits as well. The NCLAT noted that the business model of Ola and
Further, as regards Ola, it was observed that that Ola platform have no inter se connectivity and lack the possibility of sharing information with regard to the commuters and the earnings they make out of the rides provided which excludes the probability of collusion inter se the drivers through the platform of Ola. With respect to
On the issue of abuse of dominant position, it was noted that neither Ola nor
Comment: This order of NCLAT, unless challenged by a second appeal in Supreme Court, seems to close the growing challenge to the controversial application-based business model of cab aggregators, at least for the time being, in
On locus, in my humble view, the order of NCLAT is not in the spirit of the original 2007 amendment to the Competition Act, 2002, whereby the concept of “complainant” was replaced with that of an 'Informant”. As per the statement of reasons before the said amendment an Informant may or may not have any personal interest or suffered any personal injury from the impugned anti-competitive conduct since such conduct is against the society in rem and it is the duty of every citizen to point out such illegal conduct to the Commission and the Commission is mandated to inquire into it if it finds that there exists a prima facie case to investigate . Interestingly, the Commission itself had not closed the case because of lack of locus standi of the Informant but on merits, which was rightly questioned in the appeal.
Originally published by Antitrust and Competition Law Blog,
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Mr MM Sharma, Head Competition Law & Policy Practice
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