AMITY LAW SCHOOL

NOIDA
PROJECT TOPIC:

A REPORT ON THE ABUSE OF

DOMINANT POSITION IN
MARKET BY OLA AND UBER IN
THE TAXI CAB INDUSTRY

SUBMITTED BY: APOORVA CHAUDHARY 5074

(INTRODUCTION)
NIHARIKA SINGH 5077 (FACTS OF THE CASE)
PRITHVI YADAV 5068 (DECISION OF CCI)
FARAZ SIDDIQUI 5073 (CONCLUSION AND
OBSERVATION)
 WHAT IS COMPETITION?

Competition means a conflict or contention for superiority, and in the commercial world, this means a striving for
the custom and business of people in the Ps: competition has described as “a process of rivalry between firms …
seeking to win customers' business over time”.In other words, competition means "a situation in a market, in which
firms or sellers independently strive for the buyers' assistance to achieve particular business objectives,, for example,
profits, market shares, and market growth."

SECTION 3:ANTI COMPETITIVE AGREEMENTS

Section 3 of the Act prohibits and also declares the agreements between two or more enterprise
or person or association of persons, which have an appreciable adverse impact on the
competition as void.
The scope of Section 3 of Competition Act is to undertake a general prohibition on Anti-Competitive Agreements,
without any purpose for specified agreements. Section 3(1) prescribes the adverse effect on competition in India.
Section 3(2) declared such agreements are void. Section 3(3) deals with cartels and Section 3(4) dealing with the
vertical agreements. Section 3(5) deals with the exception and save the rights of owners of property rights.

APPRECIABLE ADVERSE EFFECT ON COMPETITION

WITHIN INDIA: - SECTION 3(1)
The basic requirement for Section 3(1) is that an agreement between enterprises identifying with the supply of goods
or services ought to cause or likely to cause an appreciable adverse effect on competition within India.
The section, further categorizes agreements into two categories, namely –

HORIZONTAL AGREEMENTS-SECTION3(3)
These kinds of agreements are known as horizontal agreements because the parties to the agreement are at the same
level of production in the same market. According to Section 3(3) certain agreements between enterprises, decisions
by associations of enterprise including cartels engaged in identical or similar trade of goods or provision of services
are presumed to have an appreciable effect on the competition, 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,

These kinds of agreements are per se illegal and it is not necessary to show that the agreement in the issue is anti-
competitive or not. A typical example of anti competitive horizontal agreement would be agreement between two
manufacturers of coal that they will not compete on price with each other.
CARTELS
In general term cartels considered to be a group of persons or an association of market performers that agree to
maintain the market prices at a high level and delimitate the competition. There are certain arrangements or practices
which may affect the harmful impact on competition and due to lack of awareness, are conclusively presumed to be
unreasonable and illegal. In the case of FICCI Multiplex Association of India v. United Producers/Distributors
Forum,21 the CCI held that the Producers/Distributors with their collective market power endeavored to guarantee
that multiplex owners did not get the matter of film exhibition till they consented to the proposal of enhanced
revenue share. Therefore, the CCI held that the cartel-like conduct of the producers was in violation of S. 3(3) of the
Act causing AAEC in India. In the case of Builders Association of India v. Cement Manufacturers Association and
Other,22 there was a landmark decision by CCI has forced a penalty of over Rs 6,000 Crores on 11 leading cement
producers in the wake of discovering them liable of forming cartels to control "costs, production and supply" of
cement in the market. According to the CCI order, it found that cement manufacturers were infringing the provision
of the Competition Act. The CCI circulated the order after"investigation by the Director General of information
recorded by the Builders Association of India.

TYPES OF HORIZONTAL AGREEMENT RESTRICTED

UNDER SECTION 3(3)
 Price Fixing: Section 3(3)(a)

 Agreement Limiting or Controlling Production, Supply, etc.: Section 3(3)(b)

 Allocation of Area or Market: Section 3(3)(c)

 Bid Rigging: sub-section (3)(d)

PRICE FIXING
Price-fixing is agreeing with a competitor what price customers will be charged. It can also include agreements not
to sell something below a minimum price or agreeing not to undercut a competitor. Price-fixing leads to inflated
prices and customers being overcharged.

WHO IS COVERED BY PRICE FIXING

REGULATIONS?
Competition law applies to online markets as well as traditional sellers. It also applies equally to small businesses as
well as large ones.

DISCUSSING PRICES WITH COMPETITORS

You must not discuss the prices you’re going to charge your customers with your competitors.
You’ll be breaking the law if you agree with another business:
  To charge the same prices to your customers
 To offer discounts or increase your prices at the same time
 To charge the same fees to intermediaries, e.g. retailers selling your products

HOW PRICE FIXING HAPPENS

Price fixing can happen several ways. Businesses can agree to set their prices high, so that consumers have no
choice but to buy at the high price. They can also agree to set mark-ups, sales, surcharges or discounts on goods or
services at the same rate. Businesses can also agree to set their maximum purchasing price so that a seller of a
product, service or commodity will be forced to sell at the set price. Price fixing can also happen in the credit
market, where companies agree to standardize credit terms to consumers. Many states have “below sales-cost laws,”
which prohibit businesses from selling goods or services below market cost, if their intent is anti-competitive.

It is important to remember that illegal price fixing only occurs when there is an agreement between businesses to
fix prices. A business, acting on its own, may use legitimate efforts to obtain the best price they can, including the
ability to raise prices to the detriment of the general public. Further, businesses that conform to the same prices
without an express or implied agreement are not in violation of price fixing laws. However, there is a fine line
between conforming to prices at one’s own accord, and having an implied agreement to do so.

RESALE PRICE MAINTENANCE

Resale price maintenance (RPM) is where a supplier and a retailer agree that the retailer will not resell the supplier’s
products for less than a set price. This does not include recommended resale prices (RRP), as long as the retailer
can still resell at a price it wants and there are no threats or incentives.
RPM is often indirect. A supplier may impose restrictions on how far its product can be discounted, impose so-called
‘minimum advertised price policies’ or make threats if a certain price is not maintained. Do not agree with suppliers to
fixed or minimum retail prices and do not exert pressure for distributors to adhere to a minimum price.

VERTICAL AGREEMENTS-SECTION 3(4)

Vertical agreements are those agreements which are amongst enterprises or persons at different stages or levels of
the production chain in different markets. These agreements are not per se illegal and in order to establish that they
are anti-competitive it must proved that such agreement causes or is likely to cause an appreciable adverse effect on
competition in India.

The judicial pronouncements in US have evolved the “rule of reason” approach to ascertain whether a vertical
agreement has adverse effect of competition. The rule of reason demands a proper inquiry whether the challenged
agreement is one that promotes or the one that suppresses the competition. Agreements are considered illegal only if
they result in unreasonable restrictions on competition. The Act on the other hand as such does not define the term
appreciable effect on competition but under Section 19 (3) provides some factors all or any of which may be
considered while determining whether an agreement has an appreciable adverse effect on competition. These
factors are -

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.

WHETHER CONSUMERS CAN BE PARTY TO ANTI

COMPETITIVE AGREEMENTS

The Section 3(1) of the Act inter alia prohibits an agreement between an enterprise and a person causing or is likely
to cause an appreciable effect on competition within India. As the definition of person under the Act includes an
individual, it leads to possible interpretation that consumers can be a party to anti-competitive. This proposition
contradicts with the whole philosophy of competition law behind prohibiting anti competitive agreements, but still
the Act nowhere negates this proposition on the other hand seems to support it.

If this preposition is answered in affirmative, it may have multi dimensional adverse implications on contractual
relations. For instance a consumer will be able to avoid a contract if subsequently such contract is proved to be anti
competitive. This not something which the Competition Commission doesn’t the power to do, in fact the
Commission in the case of Belarie Owners Association v. DLF Ltd. & HUDA has directed DLF to modify unfair
conditions in a properly entered contract. However the rationale behind this decision was that by imposing such
unfair terms the DLF has abused its Dominance and not on the ground of such agreement being anti-competitive.

The issue as to whether consumers can be party to anti competitive agreements was raised before Competition
Commission in the case of Yashoda Hospital and Research Centre Ltd. v. India Bulls Financial Services Ltd. (IFSL).
The Commission held that for application of Section 3 there must be two or more enterprises and there must be an
agreement between them. While adjudging the same issue the Gujarat High Court in case of Jai Balaji Industries
Ltd. & Ans. v. Union of India has observed that the Consumers have no role to play in anti-competitive agreements.
Thus, after these judicial pronouncements it is well established that a consumer can’t be party to any anti
competitive agreement as prohibited under Section 3 of the Act.

SECTION 4-ABUSE OF DOMINANT POSITION

Section 4 prevents any enterprise or group from abusing its dominant position. The Act also provides circumstances
under which there is abuse of dominant position.section4(2) prevents following acts resulting in abuse of dominant
position:

1. Impose unfair or discriminatory condition or price in sale and purchase of goods or services;

2. Limit or restrict;

3. Production of goods or services

4. Technical or scientific development relating to goods or services to the prejudice of consumers;

Indulges in practice resulting in denial of market access;

1. Make conclusion of contracts subject to acceptance by other parties;

2. Use its dominant position in one market to enter into other relevant market;

DEFINITION OF DOMINANT POSITION

According to the Act, dominant position means a position of strength, enjoyed by an enterprise in the relevant
market in India which enables it to:

1. Operate independently of competitive forces in relevant market

2. Affect competitors, consumers or relevant market in its favour

Predatory price means sale of goods or services at a price which is below the cost as may be with the view to
reduce competition or eliminate competitors.

The term abuse of dominant position refers to anticompetitive business practices in which a dominant firm may
engage in order to maintain or increase its position in the market.

JUDICIAL DICTA ON ABUSE OF DOMINANT

POSITION
What does dominant position imply?

In the case of, Shri Neeraj Malhotra, Advocates v. North Delhi Power Ltd., the CCI observed that s.4 does not
prohibit an enterprise from holding a dominant position in a market, it does place a special responsibility on
such enterprises, in requiring them not to abuse their dominant position. The CCI further held that Section 4
does not contain an exhaustive list of activities that would amount to contravention of its provisions. The actions,
practices and conduct of an enterprise in a dominant position have to be examined in view of the facts and
circumstances of each case to determine whether or not the same constitutes an abuse of dominance in terms of s.4
of the act.
In substance, `dominant position’ means the position of strength enjoyed by an enterprise that enables it to act
independently of competitive forces prevailing in the relevant market. Such an enterprise will be in a position to
disregard market forces and unilaterally impose trading conditions, fix prices, etc. The abuse may result in the
restriction of competition, or the elimination of effective competition.

HOW TO EXAMINE DOMINANT POSITION OF AN

ENTERPRISE?
In a recent case Fast Track Call Cab Pvt. Ltd. and Meru Travel Solutions Pvt. Ltd v. ANI Technologies
Pvt. Ltd., the CCI while determining whether the OP (OLA) held a dominant position in relevant market
or not remarked that abuse of dominant position under Section 4 would be attracted only when the entity
under scrutiny holds a dominant position in the relevant market. CCI also elaborated on the concept of
dominant position and stated dominant position as a position of economic strength enjoyed by the
enterprise in the relevant market, which enables it to operate independently of competitive forces
prevailing in the relevant market or affect its competitor or consumer or the relevant market in its
favour. Such ability of the enterprise to behave independently of competitive forces needs to be
assessed in light of all relevant circumstances and the factors enlisted under Section 19(4) of the
Act. The CCI in the case while determining dominance of OLA took the following factors into
consideration:

 Market shares of OLA;

 Its competitors in relevant markrt;
 Annual and monthly number of trips in the relevant market during the period of investigation;

PROCEDURE FOR INQUIRY UNDER SECTION

19-SECTION 26
The procedure of inquiry by the Competition Commission of India is enumerated under Section 19 of the
Competition Act i.e. inquiry in cases of certain agreements alleged to be in contravention of the Act or information
alleging abuse of dominant position by an enterprise is conducted by the Commission in the below manner:
SAMIR AGARWAL V. ANI TECHNOLOGIES PVT
LTD.(OLA), UBER INDIA SYSTEMS PVT LTD.,
UBER B.V., UBER TECHNOLOGIES INC.

Parties to the case

The information has been filed under Section 19(1)(a) of the Competition Act, 2002 (hereinafter the
‘Act’) by Mr. Samir Agrawal (hereinafter the ‘Informant’) against ANI Technologies Pvt. Ltd.
(hereinafter the ‘Opposite Party No. 1/ OP-1/Ola’), Uber India Systems Pvt. Ltd. (hereinafter the
‘Opposite Party No. 2/ OP-2/Uber’), and Uber B.V., Amsterdam, Netherlands (hereinafter the
‘Opposite Party No. 3/ OP-3’) and Uber Technologies Inc., San Francisco, U.S.A (hereinafter the
‘Opposite Party No. 4/ OP-4’) (collectively referred to as ‘Opposite Parties’/ ‘OPs’) alleging
contravention of the provisions of Sections 3 of the Act.

Facts of the case

1- OP-1, a domestic app-based radio taxi service provider, acts as an intermediary between
riders and drivers for provision of its services through a software application, ‘Ola’ app.
Similarly, OP-2 to OP-4, as a group, are engaged in the business of facilitating on-
demand taxi service through ‘Uber’ app in India among other countries. The OP-4, based
out of USA, is the holding company of Uber group. The OP-3 enters into contract with
different taxi owners attached to Uber network and is responsible for making payment of
rider services as well as incentives to drivers. The OP-2 acts as an agent of OP-3 for
conducting business in India and provides assistance in connection with marketing and
promotion of services.

2- The Informant, stated to be an independent law practitioner, is a consumer of services

provided by OP-1 (‘Ola’) and OP-2 (‘Uber’). He is primarily aggrieved by the pricing
mechanism adopted by the aforesaid OPs while providing radio taxi services. The
Informant has alleged that the algorithmic pricing adopted by the OPs takes away the
liberty of individual drivers to compete with each other and thus, amounts to price fixing
by the OPs, in contravention of the provisions of Section 3 of the Act.

3- The Informant has stated that OPs essentially operate as platforms through a mobile
application which allows commuter and driver (two sides of the platform) to interact. The
commuters and drivers can download the ‘App’ on their smartphones and register
 themselves. Using the App of a respective OP, the rider opts for a ride and the driver
accepts the ride, pursuant to which the driver provides end-to-end services from pick-up
of rider to drop at their destination. The fare is calculated by the algorithm based on many
factors, including the expected time and distance which is shown to the rider before the
rider opts for a ride. The App facilitates payment of the fare by digital mode of credit
card/debit card/Ola money and serves as the driver’s limited payment collection agent,
and sends a receipt of the same to the rider’s email address.

4- The Informant has submitted that due to algorithmic pricing, riders are not able to
negotiate fares with individual drivers for rides matched through App nor drivers are able
to offer any discounts. Thus, the algorithm takes away the freedom of the riders and
drivers to choose the other side on the basis of price competition and both have to accept
the price set by the algorithm. It is further alleged that the algorithm calculates the fare
based on a base amount, ride distance, and time spent in transit, which is multiplied by a
‘surge’ factor during periods of high demand. The drivers who use the Ola/Uber App,
instead of competing on price, accept the fare which is the outcome of Ola/Uber pricing
algorithm. Further, the drivers who are attached to OPs’ networks do not function as their
employees, but as independent third party service providers. It has been alleged that the
OPs, i.e. Ola/Uber, act as ‘Hub’ where ‘spokes’ (competing drivers) collude on prices.

5- As per the Driver Terms and Conditions, which are agreed upon between the cab
aggregators (i.e. Ola/Uber) with their respective drivers, the taxi fare is reflected on the
App at the end of the trip which the driver is bound to accept without having any
discretion. The drivers receive their share after deduction of commission by Ola/Uber.

6- The Informant has contended that, being a platform, Ola/Uber does not own any taxi and
operate only as a platform; and in this sense, their model is comparable to Zomato,
Trivago or Airbnb who do not own any restaurants, properties or hotels, respectively, but
acts only as platforms that connect buyers and sellers. In none of these models, price is
fixed by the platform. Rather the independent restaurants, properties or hotels fix the
prices; however, in case of Ola/Uber, the driver is assigned a ride for a fare determined
by the App, due to which suppliers/competitors/drivers indulge in price fixation. The
Informant has alleged that Ola’s/Uber’s pricing algorithm artificially manipulates supply
and demand, which guarantees higher fares to drivers who would otherwise compete
against one another on price and would not be able to command such high prices. As
Ola/Uber and its drivers do not share any agency/employee relationship, they do not
function as single economic entity, and as such the cooperation between drivers
 orchestrated by Ola/Uber results in ‘concerted action’ under Section 3(3)(a) read with
Section 3(1) of the Act.

7- The Informant has further submitted that Ola/Uber App prevents drivers from competing
on fares akin to a trade association that facilitates a cartel, and in this regard has cited
Builders Associations v. Cement manufacturers Association and Ors. (Case no. 29 of
2010) wherein a trade association that facilitated a cartel was penalized. The Informant
has submitted that a cartel is a cartel, even if price fixing is achieved by way of an App
and the OPs cannot claim any immunity from the provisions of the Act on the pretext of
‘App’ based pricing.
8- The Informant has stated that the OPs have greater bargaining power than
riders/commuters in determination of price for a ride owing to availability of asymmetric
information. Owing to this information asymmetry, OPs are enabled to implement perfect
price discrimination, whereby riders are charged on the basis of their willingness to pay.
Since they are under no legal obligation to publicly disclose data regarding the
calculation of such prices, OPs use personalised data of the riders to manipulate prices. It
is also stated that drivers have a common motive to adhere to OPs’ pricing algorithm
which results in artificially high fares. If such motive was not present, individual drivers
would have sought to differentiate themselves from other drivers on the basis of price,
among other factors.

9- The Informant has further alleged that Ola/Uber and its drivers are in a vertical
relationship wherein Ola/Uber imposes a minimum price level on the drivers, resulting in
a contravention of Resale Price Maintenance under Section 3(4)(e) of the Act. The
Informant has stated that Ola/Uber’s algorithm determines the price, below which drivers
cannot charge which results in a minimum fixed price. The Informant has relied upon the
Commission’s order in Fx Enterprise Soultions India Pvt. Ltd. v. Hyundai Motor India
Limited, Case no. 36 and 82 of 2014, decided on 14.06.2017, wherein the Commission
observed that an agreement that has as its direct or indirect object in the establishment of
a fixed or minimum resale price level, may restrict competition. It has been submitted
that the Commission had emphasised the linkage between intra-brand price competition
and its subsequent impact on inter-brand price competition in the said case, which is
particularly significant from a pricing perspective and therefore, affects the ultimate
consumer.

Observations and findings of the Commission

10- The Commission considered the information in its ordinary meeting held on 18.09.2018
and decided to hear the Informant in a preliminary conference on 24.10.2018. On
24.10.2018, the Informant appeared before the Commission and reiterated the facts and
 allegation as stated in the information, which are not reproduced herein for the sake of
brevity, unless the context demand otherwise.

11- The Commission notes that the OPs, i.e. Ola and Uber (hereinafter collectively referred to
as ‘Cab Aggregators’), provide on-demand radio taxi services that match riders with
drivers through their respective software applications/Apps. For availing the services of
Cab Aggregators, the consumers download the App onto their smartphone free of charge.
The potential riders book a cab using the respective App of the Cab Aggregator which
connects the riders and drivers and provides an estimate of the fare/price beforehand,
using an algorithm. The first allegation of the Informant is that the algorithms used by
Cab Aggregators entrusts them with the centralised power to fix the ride prices for rides
booked through their respective Apps. The Cab Aggregators use their respective
algorithms to fix price [Section 3(3)(a) read with Section 3(1) of the Act] for every ride
and do not allow the drivers to compete on prices. The Informant has alleged that since
drivers are attached to Cab Aggregators as independent third party service providers and
not as their employees, the impugned price determination by Cab Aggregators amounts to
price fixing on behalf of drivers. Such arrangement acts as hub and spoke arrangement,
akin to a traditional association/platform that facilitates price fixing. The Informant relied
upon some of the earlier orders of the Commission where trade associations were
penalized for facilitating cartel activities between similarly players market players.
Secondly, it has been alleged that such price fixing acts as an imposition of minimum
resale price maintenance agreement [Section 3(4)(e) of the Act] between Cab
Aggregators and their drivers as the latter have no liberty to reject the price calculated by
the algorithm or offer their services at a price lower than the said price. Thirdly, it has
been averred that owing to information asymmetry, i.e. Cab Aggregators possessing
considerable personalized information about every rider, have been able to price
discriminate to the disadvantage of the riders. It has been claimed that if such situation
had not been there, the drivers could have differentiated themselves on the basis of price.
All these allegations are dealt in the following paragraphs.

12- At the outset, it is highlighted that though the Commission has dealt with few cases in
this sector, the allegations in the present case are different from those earlier cases. The
present case alleges that Cab Aggregators have used their respective algorithms to
facilitate price-fixing between drivers. The Informant has not alleged collusion between
the Cab Aggregators i.e. Ola and Uber through their algorithms; rather collusion has been
alleged on the part of drivers through the platform of these Cab Aggregators, who
purportedly use algorithms to fix prices which the drivers are bound to accept.
13- The Informant has defined the business model of Ola/ Uber as a hub and spoke cartel,
alleging that the platforms of these Cab Aggregators have acted as a hub for the collusion
between the spokes, i.e. drivers. In support of his allegation regarding hub and spoke, the
Informant relied upon a US class action suit (Meyer v. Kalanick, Case No.
1:2015cv09796) filed by one of the riders against the ex-CEO of Uber. In the said case
the plaintiff Mr. Meyer alleged that Mr. Kalanick, while disclaiming that he was running
a transportation company, had conspired with Uber drivers to use Uber's pricing
algorithm to set the prices charged to Uber riders, thereby restricting price competition
among drivers to the detriment of Uber riders. The Informant stated that though the case
is under investigation, the fact that it was sent by the US courts for investigation shows
the merit in the plea raised by the Informant before the Commission. The Commission
has considered the argument of the Informant but is not convinced that mere initiation of
investigation by another competition authority necessarily/automatically warrants an
action under the Act. Whether an investigation is warranted depends on the existence of a
prima facie case of contravention under the provisions of the Act. Thus, the allegations of
the Informant are tested in the following paragraphs, based on the mandate of the Act to
assess whether a prima facie case of contravention has been made out.

14- In the conventional sense, hub and spoke arrangement refers to exchange of sensitive
information between competitors through a third party that facilitates the cartelistic
behavior of such competitors. The same does not seem to apply to the facts of the present
case. In case of Cab Aggregators model, the estimation of fare through App is done by
the algorithm on the basis of large data sets, popularly referred to as ‘big data’. Such
algorithm seemingly takes into account personalized information of riders along with
other factors e.g. time of the day, traffic situation, special conditions/events, festival,
weekday/weekend which all determine the demand-supply situation etc. Resultantly, the
algorithmically determined pricing for each rider and each trip tends to be different
owing to the interplay of large data sets. Such pricing does not appear to be similar to the
‘hub and spoke’ arrangement as understood in the traditional competition parlance. A hub
and spoke arrangement generally requires the spokes to use a third party platform (hub)
for exchange of sensitive information, including information on prices which can
facilitate price fixing. For a cartel to operate as a hub and spoke, there needs to be a
conspiracy to fix prices, which requires existence of collusion in the first place. In the
present case, the drivers may have acceded to the algorithmically determined prices by
the platform (Ola/Uber), this cannot be said to be amounting to collusion between the
drivers. In the case of ride-sourcing and ride-sharing services, a hub-and-spoke cartel
would require an agreement between all drivers to set prices through the platform, or an
agreement for the platform to coordinate prices between them. There does not appear to
be any such agreement between drivers inter-se to delegate this pricing power to the
 platform/Cab Aggregators. Thus, the Commission finds no substance in the first
allegation raised by the Informant.

15- The second allegation pertains to minimum resale price maintenance agreement between
Cab Aggregators and their drivers as the latter allegedly have no liberty to reject the price
calculated by the algorithm or offer their services at a price lower than the said price. The
Informant has alleged that this arrangement amounts to a contravention of Section 3(4)(e)
of the Act. Further, the third allegation is that owing to information asymmetry, i.e. Cab
Aggregators price discriminate to the disadvantage of the riders. The Commission will
deal with these two allegations simultaneously in the following paragraphs.

16- The Informant has alleged that the OPs, by setting the prices to be charged by their
driver-partners to the riders, have indulged in resale price maintenance in contravention
of Section 3(4)(e) of the Act. Resale is fundamental to the conduct of resale price
maintenance. In the context of app-based taxi services, the OPs do not sell any
good/service to the drivers that the drivers resell to the riders. While the drivers offer the
physical service of transportation to the riders and are legally independent entities, they
are effectively extensions or agents of the OPs when they operate through the OPs’
platforms. A single transaction takes place between the rider and Ola/Uber, who provides
a composite service of the driver-rider matchmaking, the ride, GPS tracking etc. and price
is generated only once. The OPs, by performing a centralized aggregation function that
rests on algorithmic determination of prices, have the sole control over prices. In absence
of any resale of services, the allegation of resale price maintenance is not tenable.
Determination of price by the OPs is integral to the functioning of the aggregation-based
models, which the OPs employ for providing app-based taxi services. The pricing
algorithms allow for adjustment and optimization of prices based on multiple factors,
including available stock and anticipated demand. Consequently, the fares of the OPs are
dynamic in nature and are updated based on real-time market and traffic conditions.
Resale price maintenance, under the provisions of the Act, is essentially setting of a floor
price on resale. In case of app-based taxi services, the dynamic pricing can and does on
many occasions drive the prices to levels much lower than the fares that would have been
charged by independent taxi drivers. Thus, there does not seem to be any fixed floor price
that is set and maintained by the aggregators for all drivers and the centralized pricing
mechanism cannot be viewed as a vertical instrument employed to orchestrate price-
fixing cartel amongst the drivers. The Commission is of the view that the Informant has
come to an erroneous conclusion, without placing any evidence on record, that an
algorithm determined price as explained above will eliminate price competition and that
the price so determined will be necessarily higher than the prices that are negotiated by
drivers and the riders on an individual trip basis. Thus, the allegation of the Informant
 that the OPs impose a resale price maintenance on the drivers, in contravention of Section
3(4)(e) of the Act, is not tenable.

17- Based on the foregoing discussion, the allegations raised by the Informant with regard to
price fixing under section 3(3)(a) read with section 3(1), resale price maintenance
agreement under section 3(4)(e) read with section 3(1). Moreover, the Commission
observes that existence of an agreement, understanding or arrangement,
demonstrating/indicating meeting of minds, is a sine qua non for establishing a
contravention under Section 3 of the Act. In the present case neither there appears to be
any such agreement or meeting of minds between the Cab Aggregators and their
respective drivers nor between the drivers inter-se. In result thereof, no contravention of
the provisions of Section 3 of the Act appears to be made out given the facts of the
present case.

18- Further, the allegation as regards price discrimination also seems to be misplaced and
unsupported by any evidence on record. Price discrimination can perhaps be scrutinized
under Section 4 of the Act, which has not been alleged by the Informant. Imposition of
discriminatory price is prohibited under Section 4(2)(a)(ii) of the Act only when indulged
in by a dominant enterprise. It is not the Informant’s case that any of the OPs is dominant
in the app-based taxi services market. Given this, the Commission does not find it
appropriate to delve into such analysis given that the market in question features two
players, Ola as well as Uber, none of which is alleged to be dominant. Further, the
provisions of the Act clearly stipulate dominant position by only one enterprise or one
group and do not recognize collective dominance. This position was amply made clear in
Case Nos. 6 &74 of 2015 and later reiterated in Case Nos. 25, 26, 27 & 28 of 2017, both
matters pertaining to the Cab Aggregators market. Thus, given these facts and legal
position, the Commission rejects the allegation of the Informant with regard to price
discrimination.

19- Before parting with the present order, the Commission notes that the Informant has
placed reliance on the Commission’s judgment of Builders Association v. Cement
Manufacturers Association & Ors, (Case No. 29 of 2010 decided on 31.08.2016) in
support of his allegations and has demanded its uniform application in the present case. It
has been alleged that as the trade association of cement manufacturers (Cements
Manufactures Association) facilitated a cartel of cement companies in the said case
through traditional mode, Ola/Uber has facilitated a cartel of drivers in a digital mode and
should be accorded a similar
20- Treatment/liability under the Act. The Commission finds this argument devoid of an
understanding of economic literature and practical realties of the digital markets. The
situation of cement manufacturers colluding through a trade association is different from
an App providing taxi/cab services. If drivers were colluding using an App as a platform,
the said arrangement would have amounted to cartelization; however, this cannot be
equated with the facts of the present cases as demanded by the Informant. Ola and Uber
are not an association of drivers, rather they act as separate entities from their respective
drivers. In the present situation, a rider books his/her ride at any given time which is
accepted by an anonymous driver available in the area, and there is no opportunity for
such driver to coordinate its action with other drivers. This cannot be termed as a cartel
activity/conduct through Ola/Uber’s platform. Thus, the present case is different from the
Cement case, not only with regard to adoption of digital App but also with regard to other
relevant aspects as elucidated hereinbefore.

21- Further, comparison of the Ola/Uber App with Airbnb, Trivago and Zomato etc. is also
misconstrued where sellers on those platforms have their own identities or brand value
vis-à-vis the consumers. The consumers buying through Zomato have a preference for a
particular restaurant, and consumers booking hotels through Trivago wishes to know the
options available in terms of their offerings and characteristics etc. It cannot be equated
with a Cab Aggregators’ app where the consumers have no material information about
the drivers available in its area of demand. As such, the rides offered by individual
drivers, through Ola/Uber App constitute homogenous products where riders are
indifferent between different drivers registered with a particular Cab Aggregators.

22- Moreover, in Fast Track Call Cabs vs. ANI Technologies (Case No. 06 and 74 of 2015
decided on 19.07.2017), the Commission considered Ola as a radio taxi operator and not
merely as a platform. The European Court of Justice has also held Uber as a transport
service company which not only intermediates between drivers but also acts as service
provider, in Asociación Profesional Élite Taxi v. Uber Systems Spain SL (C-434/15).
Thus, it may not be appropriate to equate Ola/Uber App with Airbnb, Trivago and
Zomato etc. which purely acts as platforms.

23- Based on the foregoing, the Commission is of the view that no case of contravention of
the provisions of Section 3 has been made out and the matter is accordingly closed
herewith under Section 26(2) of the Act.