THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020

NATIONAL LAW UNIVERSITY, JODHPUR

TEAM CODE: 042

BEFORE THE HON’BLE VORMIRIAN COMPANY LAW APPELLATE

TRIBUNAL

TRIMATO, ZIGGY, NOMRHINO & OTHERS

(APPELLANTS)

V.

1. COMPETITION COMMISSION OF VORMOIR

2. VORMIRIAN ASSOCIATION OF RESTAURANTEURS

(RESPONDENTS)

APPEAL AGAINST FINAL ORDER OF CCV IN CASE NO. 1 OF 2020

AND ORDER UNDER CASE NO. 2 OF 2020 FOR VIOLATION OF

SECTION 3 AND 4 AND OTHER RELEVANT SECTIONS OF COMPETITION

ACT, 2002 BY RESPONDENTS.

MEMORANDUM ON BEHALF OF RESPONDENTS.

 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

Table of Contents

LIST OF

ABBREVIATIONS……………………………………………………………………. II

INDEX OF AUTHORITIES...................................................................... III

STATEMENT OF JURISDICTION................................................................ V

STATEMENT OF FACTS....................................................................... VI

ISSUES FOR

CONSIDERATION……………………………………………………………….VIII

SUMMARY OF ARGUMENTS............................................................... IX

WRITTEN ARGUMENTS.....................................................................12

I. WHETHER THE FSAS VIOLATED THE PROVISIONS OF SECTION 3(3) READ

WITH SECTION 3(1) OF THE

ACT?............................................................................................
........12

II. W HETHER THE FSAS VIOLATED THE PROVISIONS OF SECTION 3(4)(e)

AND SECTION 3(3) READ WITH SECTION 3(1) BY WAY OF THEIR

APPAs?.......................................................................................
............................................20

III. WHETHER THE FSAS VIOLATED PROVISIONS OF SECTION 4 OF THE

ACT, COLLECTIVELY AND/OR INDIVIDUALLY (ON PART OF TRIMATO AND/OR AS

PART OF A SINGLE ECONOMIC

ENTITY)?.......................................................................................

...........24

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

IV. WHETHER VAR, ALONG WITH ITS MEMBER RESTAURANTS, VIOLATED

PROVISIONS OF SECTION 3(3) READ WITH SECTION 3(1) OF THE

ACT?.....................................................32

PRAYER......................................................................................34

LIST OF ABBREVIATIONS

Sr. No. Abbreviations Expansion

1. FSA Food Services Aggregators
2. VAR Vormirian Association of Restauranteurs
3. APPAs Across Platform Parity Agreements
4. CCV Competition Commission of Vormir
5. OFT Office of Fair Trading
6. CAT Competition Appeal Tribunal
7. RRP Recommended Retail Price
8. US United States
9. GBP Great Britain Pound
10. FICCI Federation of Indian Chambers of Commerce
& Industry
11. CCI Competition Commission of India
12. RTP Restrictive Trade Practices
13. MTP Monopolistic Trade Practices
14. MRTP Monopolies and Restrictive Trade Practices
15. BA British Airways
16. RBI Reserve Bank of India

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

INDEX OF AUTHORITIES

STATUTES REFERRED:

1. COMPETITION ACT, 2002.

2. THE MONOPOLIES & RESTICTIVE TRADE PRACTICES ACT, 1969.

CASES REFERRED :

1. ARGOS LIMITED & LITTLEWOODS LIMITED V. OFFICE OF FAIR TRADING

[20041 CAT 24, [20051 CAT 13
2. INTERSTATE CIRCUIT, INC. V. UNITED STATES, 306 U.S. 208 (MORE) 59 S.
CT. 467; 83 L. ED. 610
3. INTERSTATE CIRCUIT, INC. V. UNITED STATES, 306 U.S. 208 (1939), PARAS
222, 226-227.
4. FICCI-MULTIPLEX ASSOCIATION OF INDIA V. UNITED
PRODUCERS/DISTRIBUTORS FORUM, CASE NO. 01/2009 ORDER DATED 25-
5-2011 (CCI)
5. NANDA AHUJA V. COMPETITION COMMISSION OF INDIA APPEAL NOS.
11-13/2011, ORDER DATED 17-1-2014 (CAT)
6. FX ENTERPRISE SOLUTIONS INDIA PVT. LTD. V. HYUNDAI MOTOR INDIA
LIMITED CASE NO. 36 OF 2014
7. UNITED STATES V. PARKE, DAVIS & CO. 362 US 29.
8. SONAM SHARMA V. APPLE & ORS., CASE NO: 24/2011
9. PRAVAHAN MOHANTY V HDFC BANK LTD AND CARD SERVICES
DIVISION OF THE HDFC BANK, CASE NO 17/2010, DECIDED ON 23 MAY
2011.
10. BRITISH AIRWAYS PLC V COMMISSION [ECJ], CASE C-95/04 P.
11. HT MEDIA LTD V SUPER CASSETTES INDUSTRIES LTD, 2014 COMP LR 129
(CCI).
12. ATOS WORLDLINE INDIA PVT. LTD. V. VERIFONE INDIA SALES PVT.
LTD., 2015 COMPLR 327 (CCI)

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

13. ESYS INFORMATION TECHNOLOGIES PVT LTD V INTEL CORP (INTEL

INC), INTEL SEMICONDUCTOR LTD AND INTEL TECHNOLOGY INDIA PVT
LTD, 2014 COMP LR 126 (CCI).
14. SODHI TRANSPORT CO V STATE OF UP, AIR 1986 SC 1099: (1986) 2 SCC
486 : 1986 (62) STC 381 : [1986] 1 SCR 939.

BOOKS REFERRED:

1. S M DUGAR, GUIDE TO COMPETITION LAW, VOLUME 1, 6TH EDITION (2016)

2. Prof. Dr. V.K. AGARWAL, COMPETITION ACT, 2002, SECOND EDITION(2019)

3. ABIR ROY, JAYANT KUMAR, COMPETITION LAW IN INDIA, SECOND EDITION

(2014)

MISCELLANEOUS

1. Divya Sharma, Resale Price Maintenance as a Vertical Restraint under the

Competition Act 2002, reviewed by Vijay Kr. Singh, June 2012 at 10

LEXICON REFERRED-

1. Aiyar, P Ramanatha, The Law Lexicon, (2nd Ed. 2006)

2. Black’s Law Dictionary, Eighth Edition

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

STATEMENT OF JURISDICTION

The appellant has filed an appeal before this Hon’ble Tribunal under Section 53A1 of
Competition Act, 2002 and respondent hereby accepted the jurisdiction of this Hon’ble
Tribunal.

1
53A. (1) The National Company Law Appellate Tribunal constituted under section 410 of the companies Act,
2013 shall, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be the
Appellate Tribunal for the purpose of this Act and the said appellate Tribunal shall –
(a) to hear and dispose of appeals against any direction issued or decision made or order passed by the
Commission under sub-sections (2) and (6) of section 26, section 27, section 28, section 31, section 32, section
33, section 38, section 39, section 43, section 43A, section 44, section 45 or section 46 of the Act;
(b) to adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of
the Appellate Tribunal in an appeal against any finding of the Commission or under section 42A or under sub-
section (2) of section 53Q of this Act, and pass orders for the recovery of compensation under section 53N of
this Act.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

STATEMENT OF FACTS

Case No. 1 of 2020

The information filed by VAR pertains to the following:

Violation of Section 4

A.    Out of approximately 35 million monthly orders made in Vormir through FSA

platforms, Trimato has constantly held a market share of 60% of all orders per
month for the past 11 months in Vormir. Thus, Trimato is alleged to be dominant in
the market for online food aggregation services in Vormir. Trimato charges
excessive commissions from its restaurant partners, while the cloud kitchens owned
by Trimato are not charged similar commissions. This conduct is averred to be
discriminatory and favours Trimato-owned cloud kitchens and has led to denial of
market access for other restauranteurs;
B.     Trimato had recently acquired a controlling stake in a quick service restaurant
named OBO while Ziggy had acquired control of another quick service restaurant –
Fabfood;
C.     The FSAs have purportedly imposed substantially high commissions upon the
regular restaurants registered on their platforms in comparison to the commissions
charged from the newly formed cloud kitchens and joints of OBO and Fabfood. The
Informant claims that such practices provided means to Trimato and Ziggy to
leverage their interests in the downstream market where their cloud kitchens operate;
as well as in the conventional market of the regular restaurants where OBO and
Fadfood operate, in contravention of Section 4(2)(e) of the Act;
D.    Further, Trimato came up with a unique software on its online platform where
instead of offering all the food and meal deals of the restaurants registered on their
platform, they would offer recommendations to the customers to order their food
from certain specific restaurants, some of which were franchisees of OBO. VAR
suspects that hidden costs are being charged by Trimato from these specific
restaurants, due to which Trimato would intentionally float these restaurants with
attractive deals and additional discounts.
E.     FSAs provide deep discounts to customers which has been claimed to harm
competitive pricing in the market. In this regard, the FSAs have engaged in
predatory pricing which is in contravention to Section 4(2)(a)(ii) of the Act,
individually by Trimato, as well as by FSAs collectively;
F.      Additionally, VAR pointed out that IronBank, which is a tech-focused private
equity investor, along with its affiliates, has an investment of 15% in Trimato, 5% in
Ziggy and 8% in NomRhino, with a board seat in each.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

Violation of Section 3

A.    The FSAs have further entered into unique arrangements relating to ‘Across
Platform Parity Agreements’ (“APPAs”), whereby the FSAs prevent all restaurant
owners from offering better terms, prices and other favorable deals through their
individual websites or other sales channels, in comparison to the terms and prices
offered by the FSAs on their platforms; and
B.     Through the APPAs with restaurant owners, such restaurant owners are
compelled to ensure that their products are priced similarly on all FSA platforms.
This has allowed individual FSAs to retain business on their platform without losing
the business to a competing FSA. However, it has become increasingly difficult for
the partner restaurants to maintain their prices on their individual websites and at
their brick-and-mortar outlets. In VAR’s view, this has led to a “hub and spoke”
cartel between the FSAs and the restaurants that use their platforms by fixing the
prices across platforms.
 

Case No. 2 of 2020

The FSAs filed an information against VAR and its member restaurants under Section 19(1)
(a) before the CCV, alleging violations of Section 3(3) read with Section 3(1) of the Act
(Case No. 2 of 2020), on the following grounds:

A.    The FSAs highlighted the increasing prices of the products offered by the VAR
member restaurants on their platforms, which was nearly doubled in 2019 compared
to 2018, despite minimal change in the cost of production, inputs, etc. such as the
prices of raw food inputs, labor costs and logistics; In the FSAs’ view, the almost
consistent increment of 200% in prices for each item in 2019, in comparison to
2018, offered by the VAR members on the FSAs’ platforms amounted to price
parallelism which adversely impacted the businesses of the FSAs;
B.     Further, VAR prepared regular reports with comparative studies on pricing,
reach and services offered by each of its members. These reports were circulated to
each member and discussed at VAR’s bi-annual meetings. FSAs averred that VAR
collected and disseminated confidential and competitively sensitive information of
its member restaurants, and thereby, facilitated cartelization by way of price fixing
amongst its members; and
C.     It was also pointed out that much of the criticism aimed at FSAs was due to
VAR members’ collectively agreeing to anti-competitive practices, such as
provision of sub-standard quality of food and beverages, non-cooperation on part of
their servers with the FSAs’ delivery personnel, use of sub-standard infrastructure,
etc., for delivery orders from the FSAs’ platforms only.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

ISSUES FOR CONSIDERATION

ISSUE I:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(3) READ WITH SECTION 3(1) OF THE ACT?

ISSUE II:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(4)(e) AND SECTION 3(3) READ WITH SECTION 3(1) BY

WAY OF THEIR APPAS?

ISSUE III:- WHETHER THE FSAS VIOLATED PROVISIONS OF SECTION

4 OF THE ACT, COLLECTIVELY AND/OR INDIVIDUALLY (ON PART OF

TRIMATO AND/OR AS PART OF A SINGLE ECONOMIC ENTITY)?

ISSUE IV:- WHETHER VAR, ALONG WITH ITS MEMBER

RESTAURANTS, VIOLATED PROVISIONS OF SECTION 3(3) READ WITH

SECTION 3(1) OF THE ACT?

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

SUMMARY OF ARGUMENTS

ISSUE I:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(3) READ WITH SECTION 3(1) OF THE ACT?

The FSAs have entered into unique arrangements relating to ‘Across Platform Parity
Agreements’ (“APPAs”), whereby the FSAs prevent all restaurant owners from offering
better terms, prices and other favorable deals through their individual websites or other sales
channels, in comparison to the terms and prices offered by the FSAs on their platforms.

Through the APPAs with restaurant owners, such restaurant owners are compelled to ensure
that their products are priced similarly on all FSA platforms. This has allowed individual
FSAs to retain business on their platform without losing the business to a competing FSA.
However, it has become increasingly difficult for the partner restaurants to maintain their
prices on their individual websites and at their brick-and-mortar outlets. Thus, the FSAs have
purportedly strong-armed their respective partner restaurants to reduce their prices offered on
their individual websites and physical outlets, in order to keep their prices competitive with
those offered on the FSAs. In respondents view, this has led to a “hub and spoke” cartel
between the FSAs and the restaurants that use their platforms by fixing the prices across
platforms. This is construed to be in violation of both Section 3(4)(e) and Section 3(3) read
with Section 3(1) of the Act.

ISSUE II:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(4)(e) AND SECTION 3(3) READ WITH SECTION 3(1) BY

WAY OF THEIR APPAS?

The FSAs have entered into unique arrangements relating to ‘Across Platform Parity
Agreements’ (“APPAs”), whereby the FSAs prevent all restaurant owners from offering
better terms, prices and other favorable deals through their individual websites or other sales
channels, in comparison to the terms and prices offered by the FSAs on their platforms.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

Through the APPAs with restaurant owners, such restaurant owners are compelled to ensure
that their products are priced similarly on all FSA platforms. This has allowed individual
FSAs to retain business on their platform without losing the business to a competing FSA.
However, it has become increasingly difficult for the partner restaurants to maintain their
prices on their individual websites and at their brick-and-mortar outlets. Thus, the FSAs have
purportedly strong-armed their respective partner restaurants to reduce their prices offered on
their individual websites and physical outlets, in order to keep their prices competitive with
those offered on the FSAs. In respondents view, this has led to a “hub and spoke” cartel
between the FSAs and the restaurants that use their platforms by fixing the prices across
platforms. This is construed to be in violation of both Section 3(4)(e) and Section 3(3) read
with Section 3(1) of the Act.

ISSUE III:- WHETHER THE FSAS VIOLATED PROVISIONS OF SECTION

4 OF THE ACT, COLLECTIVELY AND/OR INDIVIDUALLY (ON PART OF

TRIMATO AND/OR AS PART OF A SINGLE ECONOMIC ENTITY)?

Out of approximately 35 million monthly orders made in Vormir through

FSA platforms, Trimato has constantly held a market share of 60% of all
orders per month for the past 11 months in Vormir. Thus, Trimato is alleged
to be dominant in the market for online food aggregation services in Vormir.
Trimato charges excessive commissions from its restaurant partners, while
the cloud kitchens owned by Trimato are not charged similar commissions.
This conduct is averred to be discriminatory and favours Trimato- owned
cloud kitchens in contravention of Section 4(2)(a)(i) of the Act, and has led
to denial of market access under Section 4(2)(c) for other restauranteurs.

The FSAs with their increased market power and enhanced portfolio (due to
the M&A deals), have purportedly imposed substantially high commissions
upon the regular restaurants registered on their platforms in comparison to
the commissions charged from the newly formed cloud kitchens and joints of
OBO and Fabfood. The Informant claims that such practices provided means
to Trimato and Ziggy to leverage their interests in the downstream market

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

where their cloud kitchens operate; as well as in the conventional market of

the regular restaurants where OBO and Fabfood operate, in contravention of
Section 4(2)(e) of the Act Further, Trimato came up with a unique software
on its online platform where instead of offering all the food and meal deals
of the restaurants registered on their platform, they would offer
recommendations to the customers to order their food from certain specific
restaurants, some of which were franchisees of OBO. VAR suspects that
hidden costs are being charged by Trimato from these specific restaurants,
due to which Trimato would intentionally float these restaurants with
attractive deals and additional discounts on their platforms, effectively
manipulating the customers to order only from these specific places. This
according to VAR was a contravention of Section 4(2)(b) of the Act.
FSAs provide deep discounts to customers which has been claimed to harm
competitive pricing in the market. In this regard, the FSAs have engaged in
predatory pricing which is in contravention to Section 4(2)(a)(ii) of the Act,
individually by Trimato, as well as by FSAs collectively.

ISSUE IV:- WHETHER VAR, ALONG WITH ITS MEMBER

RESTAURANTS, VIOLATED PROVISIONS OF SECTION 3(3) READ WITH

SECTION 3(1) OF THE ACT?

VAR has not violated the provisions of Section 3(3) read with Section 3(1) of the Act as
information given by FSAs were only the alleged facts made by them and it was not proved
anywhere and they don’t have any evidence to support their allegations.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

WRITTEN ARGUMENTS

ISSUE I:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(3) READ WITH SECTION 3(1) OF THE ACT?

Section 3 in the Competition Act, 2002

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 Vormir.

(2) Any agreement entered into in contravention of the provisions contained in sub-section
(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

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

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 arrangements” 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.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(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.

The FSAs have entered into unique arrangements relating to ‘Across Platform Parity
Agreements’ (“APPAs”), whereby the FSAs prevent all restaurant owners from offering
better terms, prices and other favorable deals through their individual websites or other sales
channels, in comparison to the terms and prices offered by the FSAs on their platforms.

Through the APPAs with restaurant owners, such restaurant owners are compelled to ensure
that their products are priced similarly on all FSA platforms. This has allowed individual
FSAs to retain business on their platform without losing the business to a competing FSA.
However, it has become increasingly difficult for the partner restaurants to maintain their
prices on their individual websites and at their brick-and-mortar outlets. Thus, the FSAs have
purportedly strong-armed their respective partner restaurants to reduce their prices offered on
their individual websites and physical outlets, in order to keep their prices competitive with
those offered on the FSAs. In respondents view, this has led to a “hub and spoke” cartel
between the FSAs and the restaurants that use their platforms by fixing the prices across

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

platforms. This is construed to be in violation of both Section 3(4)(e) and Section 3(3) read
with Section 3(1) of the Act.

Hub-and-spoke arrangements can be characterized as any number of vertical exchanges or

agreements between economic actors at one level of the supply chain (the spokes), and a
common trading partner on another level of the chain (the hub), leading to an indirect
exchange of information and some form of collusion between the spokes. In the extreme, this
indirect exchange can achieve the same negative market outcomes as a hardcore price fixing
cartel, without the horizontal competitors ever having exchanged information directly.

Hub-and-spoke arrangements are cartels that are not co-ordinated through direct exchanges
between the horizontal competitors, but through indirect exchanges via a vertically related
supplier or retailer.

In United Kingdom – the Toys case2 in 2003, the Office of Fair Trading (OFT) 3 fined Hasbro,
Argos and Littlewoods for entering into a price-fixing agreement concerning certain Hasbro
toys and games. The decision was challenged before the UK Competition Appeal Tribunal
(CAT), and the Court of Appeal, which both upheld the OFT infringement decision. Hasbro
was one of the largest toys and games manufacturers in the UK, while Argos and Littlewoods
were the two largest catalogue retailers, directly competing with each other. After receiving
complaints from Argos and Littlewoods about their low margins on these products, Hasbro
decided to launch a “pricing initiative”. This consisted in persuading retailers to charge a
recommended retail price (RRP) in order to increase their margins. However, both Argos and
Littlewoods, as the main price makers on the market, feared that, if one of them charged the
RRP, the other would undercut it in order to gain market shares.

This is where Hasbro played a key role in acting as a hub for the purposes of the
anticompetitive agreement. Hasbro held separate discussions with Argos and Littlewoods in
order to identify common products in their catalogues, and to check whether the retailers had
objections to matching the RRP for those common products. Hasbro communicated to each
of the retailers that the other had agreed to charge the RRP on the products in question.
Hasbro also played a major role in continuously monitoring the retailers’ conduct, both
directly and through information received from the retailers: “Argos monitored other

2
Argos Limited & Littlewoods Limited v. Office of Fair Trading [20041 CAT 24, [20051 CAT 13
3
The then two UK competition enforcers, the OFT and the Competition Commission, were merged into the
Competition & Markets Authority (CMA) in 2014.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

retailers’ prices. If they found out that a retailer was not at the Hasbro RRP, they contacted
me [Mr. Wilson, Hasbro’s Account Manager for Argos] to find out why there was a
difference […] The understanding was that if Hasbro could give Argos an assurance that the
other retailer would put the price back up to the RRP, Argos would also remain at the RRP.”
The three companies were fined a total of GBP 22.65 million, with Hasbro receiving full
leniency for co-operating with the OFT.

In Interstate Circuit, Inc. v. United States4, Interstate Circuit was one of the largest US
exhibitors of motion picture movies and operated both first-run theatres, which showed newly
released movies, and second-run theatres, which showed movies sometime after release for a
lower price. Due to the stiff competition from second-run theatres that showed movies for
less than 25 cents (as opposed to 40 cents for first-run theatres), Interstate Circuit lost sales in
its first run theatres. For this reason, it agreed with distributors that they should require
second-run theatres to charge no less than 25 cents for showing their movies. In case of non-
compliance with the agreement, Interstate Circuit threatened not to show the distributors’
movies in its theatres. The plan could only work if most distributors adhered, as, otherwise,
(i) an adhering distributor would lose sales to its non-adhering competitors, and (ii) Interstate
Circuit’s threat would not be credible, as retaliation against too many distributors would be
costly and thus unrealistic. In order to bring as many distributors as possible on board, the
manager of Interstate Circuit sent an identical letter to all distributors explaining the plan.
The letter named “on its face as addressees the eight local representatives of the distributors,
[…] so from the beginning each of the distributors knew that the proposals were under
consideration by the others”, and explained that without unanimous cooperation the plan
would result in significant business losses.

Interstate Circuit, by acting as a hub, managed to bring the upstream distributors to agree
with the plan to raise the prices of the competing second-run theatres, thus limiting
competition from them, without any direct communication actually having occurred among
the distributors. The Supreme Court concluded that “acceptance by competitors [i.e., the
upstream distributors], without previous agreement, of an invitation to participate in a plan
the necessary consequence of which, if carried out, is restraint of interstate commerce is
sufficient to establish an unlawful conspiracy under the Sherman Act.”5

4
Interstate Circuit, Inc. v. United States, 306 U.S. 208 (more) 59 S. Ct. 467; 83 L. Ed. 610
5
Judgment of the US Supreme Court in Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939), paras 222,
226-227.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

Price-fixing

It is the common form of anti-competitive agreement which directly or indirectly determines

purchase or sale price. This is also referred to as a price cartel. It is to substitute prices
determined by fiat of combination or concert6 without taking into account the interest of the
consumers. The aim and objective of the price-fixing agreement is the elimination of
competition. Such agreements are made by way of informal understandings as to prices for
preventing competition and keeping the prices up.

Thus, the power to fix prices whether reasonably exercised or not, involves power to control
the market and to raise the prices arbitrarily above the competitive level. A combination to fix
prices is presumed to have an appreciable adverse effect on competition and, therefore, void
per se.7

The practice or agreement of price-fixing in concert falls under clause (a) of section 3(3) of
the Competition Act. It covers not only the agreement between the sellers but also the
agreement between the buyers.

In FICCI-Multiplex Association of India v. United Producers/Distributors Forum 8, the report

of the Director General revealed that the opposite parties who were controlling almost 100%
of the market for the production and distribution of Hindi Motion Pictures which are
exhibited in Multiplexes in India were acting in concert to fix sale prices by fixing revenue
share ration in violation of section 3(3)(a) of the Act. Besides they were also
limiting/controlling supply by refusing to release Hindi Motion Pictures for exhibition in
Multiplexes in violation section 3(3)(a) of the Act. Thus, the Competition Commission held
that the agreement entered into by the opposite parties is covered within the mischief of

6
A ‘concert’ means that certain traders combine together to fix the price of a commodity or raise the price at the
same or about the same time. The intention is to limit competition among themselves. A feature of concert is
that the price of the commodity is fixed not on the basis of supply and demand in the market but by the
undertaking, (1979) XV A.S. I.L. 73, at p.90.
7
In U.S. also the price-fixing arrangements are illegal per se.
8
FICCI-Multiplex Association of India v. United Producers/Distributors Forum, Case No. 01/2009 order dated
25-5-2011 (CCI)

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

clauses (a) and (b) of section 3(3) of the Act. The Appellate Tribunal agreed with the order of
the Commission and found no merit in appeal9.

ISSUE II:- WHETHER THE FSAS VIOLATED THE PROVISIONS OF

SECTION 3(4)(e) AND SECTION 3(3) READ WITH SECTION 3(1) BY

WAY OF THEIR APPAS?

Section 3 in the Competition Act, 2002

9
Nanda Ahuja v. Competition Commission of India Appeal Nos. 11-13/2011, order dated 17-1-2014 (CAT)

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

3. Anti-competitive agreements.—

(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—

(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,—

(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.

The FSAs have entered into unique arrangements relating to ‘Across Platform Parity
Agreements’ (“APPAs”), whereby the FSAs prevent all restaurant owners from offering
better terms, prices and other favorable deals through their individual websites or other sales
channels, in comparison to the terms and prices offered by the FSAs on their platforms.

Through the APPAs with restaurant owners, such restaurant owners are compelled to ensure
that their products are priced similarly on all FSA platforms. This has allowed individual
FSAs to retain business on their platform without losing the business to a competing FSA.
However, it has become increasingly difficult for the partner restaurants to maintain their
prices on their individual websites and at their brick-and-mortar outlets. Thus, the FSAs have
purportedly strong-armed their respective partner restaurants to reduce their prices offered on
their individual websites and physical outlets, in order to keep their prices competitive with
those offered on the FSAs. In respondents view, this has led to a “hub and spoke” cartel
between the FSAs and the restaurants that use their platforms by fixing the prices across
platforms. This is construed to be in violation of both Section 3(4)(e) and Section 3(3) read
with Section 3(1) of the Act.

Resale price maintenance

What is resale price maintenance? It includes any agreement to sell goods on condition that
the prices 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.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

The concept of resale price maintenance was discussed by the Commission in the case of Fx
Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Limited 10. In the case, the
Informant had alleged that according to the agreement with Hyundai, dealers were mandated
to procure all automobile parts and accessories from Hyundai or through their vendors only.
While collaborating on alleged anti-competitive practices of Hyundai, the Informant stated
that Hyundai imposed a “Discount Control Mechanism”, whereby dealers were only
permitted to provide a maximum permissible discount and dealers were also not authorized to
give discount beyond a recommended range, thereby amounting to “resale price
maintenance” in contravention of Section 3(4)(e) of the Act.

The CCI in the case observed that Hyundai through exclusive agreements and arrangements
contravened provisions of Section 3(4)(e) read with Section 3(1) of the Act through
arrangements which resulted into Resale Price Maintenance. The CCI while imposing penalty
of INR 87 Crore on Hyundai noted that the infringing anti-competitive conduct of Hyundai in
the case included putting in place arrangements, which resulted into Resale Price
Maintenance by way of monitoring maximum permissible discount level through a Discount
Control Mechanism and also a penalty mechanism for non-compliance of the discount
scheme.

Explanation (e) to Section 3(4) of the Act describes that Resale Price Maintenance (RPM)
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.

Therefore resale price maintenance is a provision by which the final price charged to the
consumers is not set by the distributor but imposed by the producer. The restriction has
several variants including maximum retail price (price ceiling), minimum price, non-binding
“recommended retail price” or advertised price. Resale price maintenance or price floors
suppose that price cuts can be detected at a sufficiently low cost. These prices cuts can take
the form of non-monetary concessions such as free delivery.

Under the resale price agreements, those agreements come into the picture whose main
element is that the buyer is obliged or induced to resell not below a certain price, at a certain
price.

10
Fx Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Limited Case No. 36 of 2014

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

It has to be appreciated that the competition law of the countries is intended to prohibit
monopolies and combinations, which would interfere with free exercise of their rights by
those engaged in private business in the absence of any purpose to create or maintain a
monopoly , may exercise his discretion as to parties with whom he will deal, and may refuse
to sell to those who will not maintain specified resale prices. It may be the case wherein the
manufacturer suggests retail prices and not deal with those dealers who do not adhere to same
prices and the same would incur no liability so long as the retailers independently decide to
adhere to manufactures suggestions.11

When manufacturer’s actions go beyond mere announcement of his policy to maintain certain
retail prices and a simple refusal to deal with retailers selling below such suggested prices,
and manufacturers employs other means to effect adherence to its resale prices, such an
agreement would be in violation of the competition law.

In re, Mohan Meakins Limited RTP Enquiry 12, there was a stipulation in the franchise
agreement entered by it with the bottlers firm bottling and selling its soft drinks that the latter
shall sell the products only at prices fixed in consultation with the former was held to be
resale price maintenance.

Anti-competitive effects of resale price management

In the case of a cartel among retailers, those firms conspire to set retail prices at monopoly
levels and get manufacturers to enforce their agreement and prevent opportunistic
discounting. In this scenario, retailers use the manufacturer’s resale price management policy
as cover for their own price-fixing arrangements. Retailers thereby delegate both the
implementation and the enforcement of the cartel to the manufacturer. Consumers are made
worse off, the same as they would be if the cartel were operated directly by retailers without
the participation of a manufacturer.13

Tie-in arrangement

What is a tie-in arrangement? According to the Statute it includes any agreement requiring
purchaser of goods, as a condition of purchase, to purchase some other goods. In the case of
11
United States v. Parke, Davis & Co. 362 US 29.
12
Mohan Meakins Limited RTP Enquiry, RTP Enquiry 65/1984
13
Divya Sharma, Resale Price Maintenance as a Vertical Restraint under the Competition Act 2002, reviewed
by
Vijay Kr. Singh, June 2012 at 10

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

Sonam Sharma v. Apple & Ors.14, the CCI stated that in order to have a tying arrangement,
the following ingredients must be present:

1. There must be two products that the seller can tie together. Further, there must be a
sale or an agreement to sell one product or service on the condition that the buyer
purchases the other product or service. In other words, the requirement is that
purchase of a commodity is conditioned upon the purchase of another commodity.
2. The seller must have sufficient market power with respect to the tying product to
appreciably restrain free competition in the market for the tied product. That is, the
seller has to have such power in the market for the tying product that it can force the
buyer to purchase the tied product; and
3. The tying arrangement must affect a “not insubstantial” amount of commerce. Tying
arrangements are generally not perceived as being anti- competitive when substantial
portion of market is not affected.

ISSUE III:- WHETHER THE FSAS VIOLATED PROVISIONS OF SECTION

4 OF THE ACT, COLLECTIVELY AND/OR INDIVIDUALLY (ON PART OF

TRIMATO AND/OR AS PART OF A SINGLE ECONOMIC ENTITY)?

Section 4 in the Competition Act, 2002

4. Abuse of dominant position.—

14
Sonam Sharma v. Apple & Ors., Case No: 24/2011

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(1) No enterprise shall abuse its dominant position.

(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise,—

(a) directly or indirectly, imposes unfair or discriminatory—

(i) condition in purchase or sale of goods or services; or

(ii) price in purchase or sale (including predatory price) of goods or service; or Explanation.

—For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of
goods or services referred to in sub-clause (i) and unfair or discriminatory price in purchase
or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not
include such discriminatory conditions or prices which may be adopted to meet the
competition; or

(b) limits or restricts—

(i) production of goods or provision of services or market therefor; or

(ii) technical or scientific development relating to goods or services to the prejudice of

consumers; or

(c) indulges in practice or practices resulting in denial of market access; or

(d) makes conclusion of contracts subject to acceptance by other parties of supplementary

obligations which, by their nature or according to commercial usage, have no connection with
the subject of such contracts; or

(e) uses its dominant position in one relevant market to enter into, or protect, other relevant
market. Explanation .—For the purposes of this section, the expression—

(a) “dominant position” means a position of strength, enjoyed by an enterprise, in the relevant

market, in India, which enables it to—

(i) operate independently of competitive forces prevailing in the relevant market; or

(ii) affect its competitors or consumers or the relevant market in its favour;

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(b) “predatory price” means the sale of goods or provision of services, at a price which is
below the cost, as may be determined by regulations, of production of the goods or provision
of services, with a view to reduce competition or eliminate the competitors.

Section 4(2)(b) : limits or restricts –

(i) production of goods or provision of services of or market there for or

(ii) technical or scientific development relating to goods or services to the prejudice of
consumers; or

Limiting or restricting production of goods or provision of services or market thereof,

technical or scientific development relating to goods or services to the prejudice of
customers, shall be treated as abuse of dominance.

LEGISLATIVE BACKGROUND

The provisions relating to abuse of dominant position were in the nature of Monopolistic
Trade Practices (MTP) under Monopolies and Restrictive Trade Practices Act, 1969 (MRTP
Act, 1969), which originally attracted the attention of Monopolies Inquiry Commission
(1964) and later on by Sachar Committee (August, 1978). The present Competition Law is
based on the recommendation of The High Level Committee on Competition Policy and Law
(May, 2000).

Monopolies and Restrictive Trade Practices Act, 1969

The two expressions, “dominant undertaking” and “monopolistic trade practice” defined in
the MRTP Act, 1969, were as follows:

[s 2] (d) “dominant undertaking” means—

[(i)* * * *]

[(ii)* * * *]

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(iii)an undertaking which, by itself or along with inter-connected undertakings produces,

supplies, distributes or otherwise controls not less than one-fourth of the total goods that are
produced, supplied or distributed in India or any substantial part thereof; or

(iv)an undertaking which provides or otherwise controls not less than one-fourth of any
services that are rendered in India or any substantial part thereof:

Explanation II.—Where any goods are the subject of different forms of production, supply,
distribution or control, every reference in this Act to such goods shall be construed as
reference to any of those forms of production, supply, distribution or control, whether taken
separately or together or in such groups as may be prescribed.

Explanation III.—The question as to whether any undertakings, either by itself or along with
inter-connected undertakings, produces, supplies, distributes or controls one-fourth of any
goods or provides or controls one-fourth of any services may be determined according to any
of the following criteria, namely, value, cost, price, quantity or capacity of the goods or
services.

Explanation IV.—In determining, with reference to the features specified [in sub-clause (iii)
or sub-clause (iv), as the case may be, the question as to whether an undertaking is or is not a
dominant undertakings, regard shall be had to—

(i) the average annual production of the goods, or the average annual value of the services
provided, by the undertaking during the relevant period; and

(ii) the figures published by such authority as the Central Government may, by notification,
specify, with regard to the total production of such goods made, or the total value of such
services provided, in India or any substantial part thereof during the relevant period.

Explanation V.—In determining the question as to whether an undertaking is or is not a

dominant undertaking in relation to any goods supplied, distributed or controlled in India,
regard shall be had to the average annual quantity of such goods supplied, distributed or
controlled in India by the undertaking during the relevant period.

Explanation VI.—For the purposes of this clause, “relevant period” means the period of three
calendar years immediately preceding that calendar year which immediately precedes the
34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

calendar year in which the question arises as to whether an undertaking is or is not a

dominant undertaking.

Explanation VII.—Where goods produced in India by an undertaking have been exported to a

country outside India, then the goods so exported shall not be taken into account in
computing for the purposes of this clause—

(i) the total goods that are produced in India by that undertaking; or

(ii) the total goods that are produced, supplied or distributed in India or any substantial part
thereof;

[s 2] (i) “monopolistic trade practice” means a trade practice which has, or is likely to have,
the effect of,—

(i) maintaining the prices of goods or charges for the services at an unreasonable level by
limiting, reducing or otherwise controlling the production, supply or distribution of goods of
any description or the supply of any services or in any other manner;
(ii) unreasonably preventing or lessening competition in the production, supply or distribution
of any goods or in the supply of any services;

(iii) limiting technical development or capital investment to the common detriment or

allowing the quality of any goods produced, supplied or distributed, or any service rendered,
in India to deteriorate;

(iv) increasing unreasonably,—

(a) the cost of production of any goods; or

(b) charges for the provision, or maintenance, of any services;

(v) increasing unreasonably,—

(a) the prices at which goods are, or may be, sold or resold, or the charges at which the
services are, or may be, provided; or

(b) the profits which are, or may be, derived by the production, supply or distribution
(including the sale or purchase) of any goods or by the provision of any services;

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(vi) preventing or lessening competition in the production, supply or distribution of any

goods or in the provision or maintenance of any services by the adoption of unfair methods or
unfair or deceptive practices;

The above definition of Monopolistic Trade Practice was based on the recommendation of
Monopolies Inquiry Commission, which observed that:

Every monopolistic practice is on the face of it a restrictive practice. Indeed, sometimes the
two words are used indiscriminately. Thus, the Report of the Committee, which was set up to
study Canadian Combines Legislation, treats all combines or common policy among several
firms designed to strengthen the market position of a group of firms as monopolistic practice.
In our opinion, every practice, whether, it is by action, or understanding or agreement, formal
or informal, to which persons enjoying monopoly power resort in exercise of the same to reap
the benefits of that power, and every action, understanding or agreement tending to or
calculated to preserve, increase or consolidate such power should properly be designated
monopolistic practice.

Dominance under the MRTP Act, 1969 was based on market share of not less than one-fourth
of the total goods produced or services rendered, etc.

Report of High level Committee on Competition Policy and Law (Raghavan Committee)

Provisions of section 4 of the Competition Act, 2002 are based on recommendations of the
High Level Committee (Popularly referred to as Raghavan Committee). Their
recommendations as per report are as under:

Abuse of Dominance

In existing competition laws, there are two kinds of prohibitions of abuse of dominant
positions:

1. The first relates to actions taken by an incumbent firm to exploit its position of dominance
by charging higher prices, restricting quantities, or, more generally, using its position to
extract rents.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

2. The second relates to actions by an incumbent in a dominant position to protect its position
of dominance by making it difficult for potential entrants and competitors to enter the market.

R Prasad, in his dissenting note in Pravahan Mohanty v HDFC Bank Ltd and Card Services
Division of the HDFC Bank15, held that the use of the word “or” in the provision implies that
the provision contemplates four distinct types of dominant position:

Type A – [Dominant position qua competitors] The position of strength enables the

enterprise to completely insulate itself against competitive forces in the relevant market;

Type B – [Dominant position qua relevant market] The position of strength enables the

enterprise to affect the relevant market in its favour;

Type C – [Dominant position qua competitors] The position of strength enables the enterprise

to accept its competitors in its favour;

Type D – [Dominant position qua consumers] The position of strength enables the enterprise

to affect consumers in its favour.

TFEU (British Airways Plc v Commission (ECJ) 16,891 British Airways (BA), which was the
largest British airline, was found to hold a dominant position in the purchasing of travel
agency services, with a market share of about 40% compared to the five nearest competitors,
which held shares ranging from about 3 to 7%.892 It was held that the rival airlines were not
in a position to grant travel agents the same advantages as BA, since they were not capable of
attaining in the United Kingdom a level of revenue capable of constituting a sufficiently
broad financial base to allow them effectively to establish a reward scheme similar to BA’s.

Competition Commission in India in HT Media Ltd 17, held T-Series to be dominant given its
relatively high market share in comparison to that of competitors. It was noted that as
compared to its main competitor companies YRF, Sony and SaReGaMa, the market share of
Super Cassettes was over 50% for the last 3 years. Also, even if the market share in terms of
playout of music was considered, songs of the opposite party played on all the FM channels

15
Pravahan Mohanty v HDFC Bank Ltd and Card Services Division of the HDFC Bank, Case No 17/2010,
decided on 23 May 2011.
16
British Airways Plc v Commission [ECJ], Case C-95/04 P.
17
HT Media Ltd v Super Cassettes Industries Ltd, 2014 Comp LR 129 (CCI).

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

across the country and varied from between 25% and 60% from one station to other, which
was maintained over the last few years.

In Atos Worldline case18, the Commission concurred with DGs finding that M/s Verifone
India Sales Pvt. Ltd. was in a dominant position in relevant market of POS Terminals in
India. Based on RBI data it had been reported by DG that the market share of M/s Verifone
India Sales Pvt. Ltd. in terms of sale of POS Terminals to banks was estimated at around
70% vis-à-vis 30% of Ingenico. Further, it was reported that in terms of size, resources and
economic power M/s Verifone India Sales Pvt. Ltd. was in an advantageous position
compared to Ingenico. The Commission, considering the data and the fact that presence of
M/s Verifone India Sales Pvt. Ltd. was across country and that its capabilities in terms of
hardware and software and number of machines presently in use made consumers dependent
on it, held M/s Verifone India Sales Pvt. Ltd. to be in a dominant position in the said relevant
market.

In ESYS v Intel19,the DG, based on data on market share, revenue, prices, volume of output,
etc. reported that in “the markets of microprocessors for desktops PCs in India”; “the market
of microprocessors of mobile/portable PCs such as laptops, notebooks, net-books, etc. in
India”; and “the market of microprocessors for servers in India”; Intel enjoyed a dominant
position. It was noted that in the said three relevant markets the cumulative market share of
Intel in each year during 2009/11 was more than 80% and it was more than 85% during first
three quarters of 2012. Further, based on IDC report data it was found by the DG that the
market share of Intel during 2009/2011 in India in desktop PCs segment was around 85%, in
portable PCs segment it was around 95% and in servers segment it was around 92%. Also,
the combined market share of Intel in all three segments during the same period was around
85%. The Commission also noted that Intel was consistently enjoying very high market share
in each of the three markets. The Commission held that in light of strong entry barriers in the
relevant markets on account of significant intellectual property rights of Intel combined with
the market share, Intel acquired a position of dominance.

18
Atos Worldline India Pvt. Ltd. v. Verifone India Sales Pvt. Ltd., 2015 CompLR 327 (CCI)
19
ESYS Information Technologies Pvt Ltd v Intel Corp (Intel Inc), Intel Semiconductor Ltd and Intel
Technology India Pvt Ltd, 2014 Comp LR 126 (CCI).

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

ISSUE IV:- WHETHER VAR, ALONG WITH ITS MEMBER

RESTAURANTS, VIOLATED PROVISIONS OF SECTION 3(3) READ WITH

SECTION 3(1) OF THE ACT?

Section 3 in the Competition Act, 2002

3. Anti-competitive agreements.—

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

(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 Vormir.

(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.

Before declaring an agreement to be void the provisions mentioned in section 19(3) of the
Act have to be looked into. An appreciable adverse effect on competition under section 3
cannot be determined without regard to all or any of the factors enumerated in section 19(3)
of the Competition Act, 2002 which are:

1. Creation of barriers to new entrant in the market.

2. Driving existing competitors out of the market.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

3. Foreclosure of competition by hindering entry into the market.

4. Accrual of benefits to consumers.

5. Improvements in production or distribution of goods or provision of services.

6. Promotion of technical, scientific and economic development by means of production or

distribution of goods or provision of service.

In Sodhi Transport Co v. State of UP 20, the court observed that the words “shall presume”
have been used in the Indian judicial lore for over a century to convey that they lay down a
rebuttable presumption in respect of matters with reference to which they are used...and not
laying down a rule of conclusive proof. The court also observed that a presumption is not in
itself evidence but only makes a prima facie case for the party in whose favour it exists. It
indicates the person on whom the burden of proof lies. But when the presumption is
conclusive, it obviates the production of any other evidence. But when it is rebuttable, it only
points out the party on which lies the duty of going forward on the evidence on the fact
presumed, and, when that party has produced evidence fairly and reasonably tending to show
that the real fact is not as presumed, the purpose of presumption is over. This suggests that in
the case of horizontal agreements listed in section 3(3) of the Act, once it is established that
such an agreement exists then it will be presumed that such an agreement is anti-competitive
and has an appreciable adverse effect on competition in the market. Thus, the presumption
laid down under section 3(3) of the Act is rebuttable. However, the grounds taken for
rebutting the presumption are to be tested on the touch stone of guiding factors laid down
under section 19(3) of the Competition Act, 2002.

A combined reading of section 3(3) and section 19(3) of the Act suggests that although the
term appreciable adverse effect on competition, used in section 3(1) has not been defined,
however, section 19(3) of the Act states that while determining whether an agreement has an
appreciable adverse effect on competition under section 3 of the Act, the Commission shall
have due regard to all or any of the above-mentioned factors. The first three factors laid down
in section 19(3) of the Act, viz., (a), (b) and (c) relate to negative effects on competition
while the remaining three relate to beneficial effects. Thus, in assessing whether an

20
Sodhi Transport Co v State of UP, AIR 1986 SC 1099 : (1986) 2 SCC 486 : 1986 (62) STC 381 : [1986] 1
SCR 939.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

agreement has an appreciable adverse effect on competition, both the harmful and beneficial
effects, as reflected in the above factors, are to be considered.

34
 THE ELEVENTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2020
NATIONAL LAW UNIVERSITY, JODHPUR
TEAM CODE: 042

PRAYER

Wherefore in the light of the issues raised, arguments advanced and authorities cited it is
most humbly prayed that this Honorable Tribunal may be pleased to adjudge and declare that:

1. Trimato, Ziggy, NomRhino & others have violated the provisions of Section 3(3) read
with Section 3(1) of the Act.
2. Trimato, Ziggy, NomRhino & others have violated the provisions of Section 3(4) (e)
and Section 3(3) read with Section 3(1) by way of their APPAs.
3. Trimato, Ziggy, NomRhino & others have violated the provisions of Section 4 of the
Act, collectively and/ or individually (on part of Trimato and/ or as part of a single
economic entity).
4. VAR along with its member restaurants have not violated provisions of Section 3(3)
read with Section 3(1) of the Act.

And pass any other order that this Hon’ble Tribunal may deem fit in the interests of justice,
equity and good conscience.

ALL OF WHICH RESPECTFULLY SUBMITTED BY THE RESPONDENTS.

(COUNSEL FOR THE RESPONDENTS)

34