Competition Commission of India vs M/s Fast Way Transmission Pvt. Ltd.

Competition Act, 2002 – ss.2,4,18,19,27,41,53B, 53T and 60 – Role and Duty of Commission – Held: The Preamble of the Act, read with the ss. 2,4,18,19,27,41,53B,53T and 60 would show that the Commission set up by the Competition Act certainly has a positive role to play – A perusal of s.18 and s.19 would show that it is a positive duty of the Commission to eliminate all practices which have an adverse effect on competition – Further the Commission should promote and sustain competition, apart from protecting the interest of consumers, so as to ensure freedom of trade carried on by all participants in markets all over India – Also, a positive role is given to the Commission to inquire, suo motu, into the dominant position of enterprises, and to prohibit anti competitive agreements – S.60 then gives the Act overriding effect over other statutes in case of a clash between the Act and such statues to effectuate the policy of the Act, keeping in view the economic development of the country as a whole.

Allowing the appeal, the Court

HELD: 1. The Preamble of the Competition Act, read with sections 2,4,18,19,27,41,53B, 53T and 60 would show that the Commission set up by the Competition Act certainly has a positive role to play. A perusal of Sections18 and 19 would show that it is a positive duty of the Commission to eliminate all practices which have an adverse effect on competition. Further the Commission should promote and sustain competition, apart from protecting the interest of consumers, so as to ensure freedom of trade carried on by all participants in markets all over India. Also, a positive role is given to the Commission to inquire, suo motu, into the dominant position of enterprises, and to prohibit anti competitive agreements. Section 60 then gives the Act overriding effect over other statutes in case of a clash between the Act and such statues to effectuate the policy of the Act, keeping in view the economic development of the country as a whole. [Para 7][246-C-E]

2. On the facts of the present case, it is clear that “dominant position” is clearly made out. The Explanation to Section 4 specifically refers to a position of strength that is enjoyed by an enterprise or group thereof in the relevant market, which, as is stated hereinbefore, is Punjab and Chandigarh, in the Cable TV market, which enables respondents no. 1-4 to operate independently of competitive forces prevailing in the relevant market. The Commission has found, on facts, that since the aforesaid MSOs group has 85% of the subscribers share in the aforesaid cable TV market in the State of Punjab and Chandigarh, and that they are able to operate independently of competitive forces prevailing in the aforesaid market. This finding has not been set aside by the Appellate Tribunal. Also, the respondent would fall within Explanation (a)(ii) as well, though it is enough that it would fall within sub-section a(i) of the Explanation. Subsection (ii) refers to a position of strength as enjoyed by the respondents which enables them to affect consumers in its favour. [Para 8][246-E-H]

3. Relying upon the definition in Section 2(f)(ii), the appellant correctly argued that a broadcaster would certainly fall within the wide language contained in the aforesaid sub-section. Further, in all fairness the respondent has agreed with the same. This being the case, it is clear that as both sub-sections (i) and

(ii) of clause (a) of the Explanation apply, the respondent could be said to be in a “dominant position”, for the purpose of Section 4, in the facts of the present case. [Para 9][247-A-B]

4. Insofar as the question as to whether there is an abuse of such dominant position under Section 4(2)(c) where the respondent could be stated to have indulged in a practice resulting in denial of market access in any manner, it can be seen that in the facts of the case, the broadcaster, namely respondent No. 5, had a broadcast agreement which was entered into for a period of one year. This was sought to be terminated within the aforesaid period by the respondent by notices. The TDSAT has, by its order adverted to Regulation 4.2 of the relevant Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 and has found that the respondents have not followed the aforesaid regulations, inasmuch as no reasons for termination have been given in the notices of termination. This being the case, it is clear that, on the present facts, there is an abuse of the dominant position enjoyed by the respondents 1-4 (MSOs) only for the reason that the broadcaster was denied access to market. The words “in any manner” are words of wide import and must be given their natural meaning. This being the case, it is difficult to appreciate the reasoning of the Appellate Tribunal that, as the broadcaster and MSOs are not in competition with one another, the provisions of Sections 3 and 4 do not get attracted. The “dominant position” held by the respondent MSOs is clearly established for the purpose of Section

4 in the present case, and the Commission finding in that behalf is also not set aside by the Appellate Tribunal. If this be so, then once a dominant position is made out on facts, whether a broadcaster is in competition with MSOs is a factor that is irrelevant for the purpose of application of Section 4(2)(c) which, as has been found, becomes applicable for the simple reason that the broadcaster is denied market access due to an unlawful termination of the agreement between the said broadcaster and the respondents 1-4 (MSOs). [Paras 10, 11][247-C-H]

5. A perusal of the average GRP chart would show that the GRP given to the news channel ‘Day and Night’ is much lower than that given to any other channel, and that the respondent was correct in stating that this was the reason for terminating the agreement with the broadcaster in mid-stream. Though, on the facts of this case, Section 4(2)(c) has been breached, yet the reason given by respondents 1 to 4 (MSOs) for termination being otherwise justifiable, no penalty should be levied on the facts of the present case. [Para 13][248-G-H]