Keeping up with Competition - May 2024
A monthly newsletter by Axiom5
Welcome to the eighth issue of Keeping up with Competition, our monthly newsletter. We recap the events in the world of Indian competition law and policy in April 2024.
Detailed summaries of orders passed by the Competition Commission of India (CCI) can be accessed here.
The CCI invites bids to launch a Market Study on Artificial Intelligence.
Taking note of AI’s transformative potential and associated risks, the CCI proposes to study the evolving competitive landscape within AI system development ecosystems. The study will explore how AI applications impact competition, efficiency, and innovation in critical user industries. Competition regulators worldwide are increasingly investigating the potential risks associated with the rapid growth of AI services and potential concentration in the AI industry (see, for example, the UK Competition and Markets Authority’s report on AI foundational models).
Merger control - a snapshot
The CCI approved 12 combinations and published 9 detailed orders in April (the summaries of these orders are available here). The CCI received 14 new notices, of which 3 notices were under the green channel. In one of the cases involving Minda and Pricol, the CCI expressed concerns and indicated its intention to escalate the review to Phase 2. Minda had an existing 15.7% stake in Pricol, and competes with it in the market for auto-component parts for a range of vehicles in India, intending to acquire another 8.79% stake. The CCI issued a show-cause notice, in response to which Minda divested its existing stake of 15.7%. Due to this material change, the CCI approved Minda’s proposed acquisition of an 8.79% stake in Pricol in terms of Section 31(1) of the Act.
Behavioural cases
The CCI issued closure orders in five cases. In three orders, Prem Kumar G., Association of Indian Laboratories, and Somnath Banerjee, the CCI concluded that the allegations did not give rise to competition issues. In Buchi Ramarao Valury, the CCI assessed alleged abuse of dominance in ‘the market for provision of services for development and sale of apartments to cater to the needs of senior citizens in Bangalore Metropolitan Region’, but did not find any contraventions. It also dismissed allegations of a tie-in arrangement because the relevant parties did not operate at different stages or levels of the production chain - a condition necessary to pursue a case for anti-competitive vertical restraints. In Ravi Shankar Tiwari too the CCI dismissed allegations of abuse of dominance in the “market for provision of Content Management Software (CMS) in India” and the “market for WordPress-Specific Plugin Directories Market in India” against Automattic Inc., the parent of wordpress.org. It noted that although Automattic Inc. was dominant, repeated violations of wordpress.org’s community guidelines by the informant justified Automatic Inc.’s ban on the informant’s plugins.
In Sundaram Brake Linings Ltd. (Competition Appeal (AT) No. 19/2020), the National Company Law Appellate Tribunal held that mere exchange of competitively sensitive information is sufficient to establish a contravention of Section 3 of the Act and the CCI need not prove whether the parties with access to such information indeed actively participated in the cartel.
In Geep Industries (India) Pvt. Ltd., the Delhi High Court clarified that the CCI could only levy interest on any penalty that it imposes, once it has issued a notice demanding the penalty, and the party has failed to comply with the notice within the period specified by the CCI in compliance with the Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011.