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Case Comment on – Competition Commission of India v. Bharti Airtel Limited and Others

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CASE COMMENTARY

Appellant: Competition Commission of India

Respondent: Bharti Airtel Limited and Others

Court: Supreme Court of India

Criminal Appeal No. 11843 Of 2018 

Bench: Hon’ble Justice A.K Sikri & Ashok Bhushan

Date decided: 05-Dec-2018

FACTS OF THE CASE

In December 2016, Reliance Jio Infocom Limited (RJIL) filed a complaint with the Competition Commission of India (CCI) under Section 19(1)(a) of the Competition Act, 2002. The complaint targeted three major cellular operators: Bharti Airtel, Vodafone, and Idea Cellular (referred to as “Incumbent Dominant Operators” or “IDO”). Reliance Jio Infocom Limited accused these operators of engaging in cartelization. Additionally, Reliance Jio Infocom Limited claimed that the Cellular Operators’ Association of India (COAI), an industry association of mobile telecom operators, was assisting the Incumbent Dominant Operators in forming the alleged cartel

ISSUES RAISED

  1. Jurisdiction of CCI: Was the Competition Commission of India (CCI) lacking jurisdiction due to the TRAI Act, 1997, and related regulations?
  2. Maintainability of Writ Petitions: Were the writ petitions filed before the Bombay High Court valid and legally acceptable?
  3. High Court Findings on Merits: Could the High Court provide its conclusions based on the merits of the case?

CONTENTION OF THE APPELLANT

The contentions of the appellant are as follows: –

  1. CCI Jurisdiction: The argument centres around the distinct roles of the two bodies. The Competition Commission of India (CCI) operates to foster and maintain competition in markets, preventing anticompetitive practices across all industries in the Indian market. On the other hand, the Telecom Regulatory Authority of India (TRAI) serves as a statutory regulator, resolving disputes, handling appeals, and safeguarding the interests of telecom service providers and consumers. While TRAI assesses issues related to delay or denial of Points of Interconnection (POIs) based on license agreements and Quality of Service (QoS) regulations, the CCI investigates potential anticompetitive agreements among telecom operators using the COAI platform. Importantly, the CCI’s jurisdiction does not infringe upon TRAI’s authority to regulate the telecom industry. Therefore, the CCI can proceed with its investigation without waiting for TRAI proceedings to conclude under the TRAI Act, 1997.
  2. Scope of judicial interference under Article 226: (i.) Limited Jurisdiction: The High Court’s extraordinary jurisdiction under Article 226 is narrow and should only be exercised in exceptional circumstances. (ii) CCI Order: In this case, the CCI’s order under Section 26(1) was preliminary and administrative, not resulting in serious adverse consequences. Therefore, there was no exceptional occasion for the High Court to intervene based solely on the fact that the CCI had granted a hearing.
  3. Non-Perverse CCI Order: The contention is that the CCI had sufficient evidence to form a preliminary opinion that the respondents’ conduct violated Section 3(3)(b) of the Competition Act, 2002. This material was thoroughly considered and discussed in the order itself. Importantly, the observations made in the order dated April 21, 2017, are not definitive findings and do not bind the Director General (DG).
  4. COAI was employing measures to prevent Reliance Jio from imposing restrictions.

CONTENTION OF THE RESPONDENT:

The Contentions of the Respondent are as follows: –

  1. TRAI Act and CCI Jurisdiction: The TRAI Act, being a specialized law, limits the Competition Commission of India’s (CCI) authority to examine the telecom sector. Key points include:
    • The TRAI Act serves as a comprehensive legal framework.
    • Exclusive jurisdiction lies with TRAI to regulate the telecom sector, including competition-related matters.
    • The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has exclusive authority to address disputes between licensees, as raised by RJIL before the CCI.
    • Consequently, the CCI lacks jurisdiction to decide telecom-related disputes, especially when TRAI is already addressing them.
  2. CCI vs. TRAI Jurisdiction: Even if the CCI has jurisdiction, TRAI’s authority prevails. RJIL’s filing with the CCI in 2016 and the subsequent prima facie order in 2017 occurred while TRAI was actively handling matters related to Points of Interconnection (POIs).
  3. TRAI’s Role in Determining Jurisdiction: The contention is that TRAI should have initially determined jurisdictional facts.
  4. CCI’s Premature Investigation: Due to the absence of jurisdictional facts, the CCI should not have proceeded with the investigation. The pending matters before TRAI include issues related to inadequate Points of Interconnection (POIs) during the test phase and delays in providing POIs. When the law prescribes specific procedures, all other actions are prohibited. Therefore, the CCI’s order for investigation is premature.
  5. Judicial Review of CCI Order: The CCI’s order under Section 26(1) of the Competition Act is quasi-judicial and subject to judicial review under Article 226 of the Indian Constitution. Therefore, the writ petitions filed by the IDOs challenging this order were legally maintainable.
  6. Insufficient Consideration by CCI: Despite providing ample proof of sufficient Points of Interconnection (POIs), the CCI did not adequately consider this evidence while issuing the impugned order under Section 26(1) of the Competition Act, 2002. Consequently, filing a writ petition under Article 226 is a valid ground for challenge.

RATIONALE 

  1. CCI Jurisdiction: The Apex Court recognizes that the Competition Commission of India (CCI) plays a crucial role in curbing anti-competitive practices in Indian markets. While the CCI’s jurisdiction is not entirely excluded in the telecom sector, it defers to the Telecom Regulatory Authority of India (TRAI) initially. TRAI, being an expert in telecom matters, assesses jurisdictional issues first. If evidence supports anti-competitive practices, the CCI can then enforce its authority under relevant provisions of the Competition Act.
  2. Writ Petitions Maintainability: The Apex Court distinguishes between administrative and quasi-judicial orders. While the CCI’s order under Section 26(1) of the Competition Act is administrative, the Bombay High Court considered whether the CCI had jurisdiction to entertain requests or information submitted by RJIL and others. The Court clarified that TRAI should decide jurisdictional issues, and if necessary, the matter can be remanded to the CCI for addressing anti-competitive effects.
  3. Merits Findings: The nature of the CCI’s order remains consistent, even when dealing with the telecom sector. The Court emphasizes that findings on the alleged cartelization offenses under Section 3(3)(b) of the Competition Act will not be considered in the context of the CCI’s Section 26(1) order.

JUDGEMENT

The court passed an order in Favor of the informant (RJIL). The order was challenged in the Bombay High Court and later appealed in the Supreme Court of India. The Supreme Court upheld the decision of the Bombay High Court. The case resolved the long-debated conflict between the overarching fair market watchdog (CCI) and the sector-specific regulator (Telecom Regulatory Authority of India, TRAI). The judgment clarified the role of CCI with respect to telecom sectoral regulators, particularly in issues that simultaneously fall within the jurisdiction of both bodies. The case has far-reaching effects on CCI’s role and function. It emphasizes the need for collaboration between competition authorities and sector-specific regulators. The decision provides insights into optimal regulation and competition dynamics in the telecom sector. This landmark decision contributes to the evolving jurisprudence of competition law in India and highlights the challenges posed by intersecting issues in the telecom industry.

INFERENCE

The Apex Court resolved the jurisdictional conflict between TRAI and CCI by balancing their respective jurisdiction in the judgement of the case. It aimed to harmonize the powers of both regulators. The Court prioritized their respective jurisdictions under their relevant laws. Since the telecom sector falls under TRAI’s statutory regulation, TRAI should initially decide jurisdictional aspects. If TRAI finds evidence of anti-competitive practices, the CCI can investigate further based on the Competition Act criteria. This balanced approach sets a valuable precedent for future cases. The scope of Article 226 was also determined, it was stated that the judicial review under Article 226 should focus solely on jurisdictional questions between the two regulators. It cannot extend to opining on case merits or findings, especially when dealing with administrative orders.

References

1. Competition Commission of India v. Bharti Airtel Limited and Others

https://main.sci.gov.in/supremecourt/2017/40072/40072_2017_Judgement_05-Dec-2018.pdf
2. The Competition Act, 2002, Acts of Parliament, 2002(India)

3. Praharsh Johorey, The Competitive Dynamics: Analysing The CCI Decision In The Reliance Jio Case. The Centre for Business and Commercial Laws,https://cbcl.nliu.ac.in/competition-law/the-competitive-dynamics-analysing-the-cci-decision-in-the-reliance-jio-case/

4. Venkatesh Agarwal and Pulkit Agarwal, COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL : A CASE COMMENT, The RGNUL Financial and Mercantile Law Review (RFMLR), https://www.rfmlr.com/post/competition-commission-of-india-v-bharti-airtel-a-case-comment

5. Kanishka Pandey, Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521, LinkedIn, https://www.linkedin.com/pulse/case-analysis-competition-commission-india-v-bharti-airtel-pandey-4o96c/

6. Swasti Gupta, Competition Commission of India V. Bharti Airtel Limited and Ors. Civil Appeal No(S). 11843 of 2018 (Arising Out of SLP (C) No. 35574 of 2017), CUTS International, https://cuts-ccier.org/pdf/Edition-11-Analysis_of_Competition_Cases_in_India.pdf

7. Krishnanunni SK, Analysis of Competition Commission of India V. Bharti Airtel Limited and Ors. 2018 case, LinkedIn, https://www.linkedin.com/pulse/analysis-competition-commission-india-v-bharti-airtel-krishnanunni-sk-8ihuf/