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TEAM CODE: 017

BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL, BOHEMIA

A P P E L L AT E J U R I SD I C T I O N U/S 53B, B O H EM IAN C OM P E T IT IO N A CT , 2002

AGAINST THE ORDER U/S 43A DATED 3 AUGUST 2017

Lutyen TV Pvt. Ltd. ...APPELLANT

V.

Competition Commission of Bohemia ...RESPONDENT

AGAINST THE ORDER IN CASE NO. 1 & 2 OF 2018

Lutyen TV Pvt. Ltd. …APPELLANT

V.

Sandy Home Store & RK & Competition Commission of Bohemia ...RESPONDENTS

AGAINST THE ORDER IN CASE NO. 3 OF 2018

Lutyen TV Pvt. Ltd. ...APPELLANT

V.

Sandy Home Store & Competition Commission of Bohemia ...RESPONDENTS

MEMORIAL FILED ON BEHALF OF SANDY HOME STORE, RK, AND

COMPETITION COMMISSION OF BOHEMIA

TA B L E O F C O N T E N T S

TABLE OF CONTENTS............................................................................................................I

LIST OF ABBREVIATIONS...................................................................................................IV

INDEX OF AUTHORITIES..................................................................................................VII

STATEMENT OF JURISDICTION......................................................................................XIV

STATEMENT OF FACTS......................................................................................................XV

ISSUES FOR CONSIDERATION.....................................................................................XVIII

SUMMARY OF ARGUMENTS...........................................................................................XIX

WRITTEN SUBMISSIONS......................................................................................................1

ISSUE I. LUTYEN HAS VIOLATED THE GUN-JUMPING PROVISION U/S 43A.................1

A. THE MARKET PURCHASES AND THE APA WERE INTERCONNECTED

TRANSACTIONS…...............................................................................................................1

B. ALTERNATIVELY, ITEM 1 SCHEDULE 1 DID NOT EXEMPT THE NOTIFICATION OF THE

MARKET PURCHASES...........................................................................................................3

i. The market purchases were neither ‘solely an investment’ nor ‘in the ordinary

course of business’.........................................................................................................3

C. THE MCA NOTIFICATION DATED 27 MARCH 2017 DID NOT EXEMPT LUTYEN FROM

NOTIFYING THE ACQUISITION OF TOJO’S CASTING TECHNOLOGY DIVISION.......................5

i. The applicable law is the pre-notification law when the cause of action arises......5

[i]

ii. The notification amends the substantive application of relevant sections and

therefore, has a prospective operation............................................................................6

ISSUE II. LUTYEN HAS ABUSED ITS DOMINANCE IN UHD TV MARKET TO INCREASE

ITS SALE IN THE CASTING DEVICES MARKET BY INDULGING IN A TIE-IN ARRANGEMENT.

7

A. LUTYEN IS DOMINANT IN THE RELEVANT TYING MARKET FOR MANUFACTURE AND

SALE OF UHD TV...............................................................................................................8

i. Relevant market.......................................................................................................8

ii. Dominance...........................................................................................................9

B. LUTYEN HAS ABUSED ITS DOMINANCE TO INCREASE ITS SALES IN THE CASTING

DEVICES MARKET U/S 4(2)(D) AND 4(2)(E).......................................................................10

C. LUTYEN HAS ALSO INDULGED IN A TIE-IN ARRANGEMENT UNDER SECTION 3(4)(A)

…. 11

i. UHD TV and casting device are two distinct products..........................................12

ii. The conduct is coercive towards the consumers................................................12

iii. The conduct causes AAEC.................................................................................13

ISSUE III. LUTYEN HAS VIOLATED THE CCB’S ORDER REGARDING CONDITIONAL

APPROVAL BY INDULGING IN AN EXCLUSIVE ARRANGEMENT...........................................17

A. THE PART OF JOINT PENALTY CORRESPONDING TO THE VIOLATION OF CCB’S

ORDER REGARDING CONDITIONAL APPROVAL IS NOT APPEALABLE..................................18

ISSUE IV. THE RESALE PRICE MAINTENANCE IMPOSED BY LUTYEN VIOLATES THE

PROVISION OF THE COMPETITION ACT, 2002....................................................................19

[ii]

A. THE RPM AGREEMENT CAUSES AAEC..................................................................20

i. RPM shall drive out existing competitors, will lead to foreclosure of competition,

and will not improve the distribution system...............................................................21

ii. RPM shall not lead to any accrual of benefits to the consumers.......................23

iii. RPM is dispensable to achieve the said efficiencies due to the presence of less

restrictive alternatives..................................................................................................26

ISSUE V. SANDY HOME STORE HAS NOT INDULGED IN A REFUSAL TO DEAL U/S 3(4)

(D)……… 27

A. THE NCLAT HAS NO JURISDICTION TO HEAR THE APPEAL....................................27

i. CCB is free to pass an order against the DG’s Report...........................................27

ii. CCB has passed the order u/s 26(8)...................................................................28

iii. The order is not appealable to NCLAT...............................................................28

B. SANDY’S CONDUCT DOES NOT AMOUNT TO A REFUSAL TO DEAL..........................29

i. An enterprise has the freedom to choose its trading partners................................29

ii. Refusal to deal because of a legitimate business reason is justified..................30

iii. The conduct makes perfect economic sense......................................................31

C. THE CONDUCT IS NOT ANTI-COMPETITIVE..............................................................31

i. There are alternatives to Sandy’s distribution network.........................................31

ii. Sandy’s dominant distribution network is no ground for penalizing its refusal….

32

[iii]

PRAYER..............................................................................................................................XXII

L I S T O F A B B R E V I AT I O N S

Abbreviations Full Forms

AAEC Appreciable Adverse Effect on Competition

AIR All India Reporter

APA Asset Purchase Agreement

CCB Competition Commission of Bohemia

CCI Competition Commission of India

Co Company

COMPAT Competition Appellate Tribunal

CRT Cathode Ray Tube

D Colo District of Colombia

DG Director General

ECR European Court Reports

Edn Edition

F 2d Federal Reporter, Second Series

F 3d Federal Reporter, Third Series

F Supp Federal Supplement

FHD Full High Definition

HD High Definition

ICN International Competition Network

Inc Incorporated

LLP Limited Liability Partnership

Ltd Limited

Lutyen Lutyen TV Pvt. Ltd

[iv]

MCA Ministry of Corporate Affairs MDNC Middle District of North Carolina MRP Maximum Retail Price NCLAT National Company Law Appellate Tribunal ND Cal Northern District of California No Number OECD Organization for Economic Co-operation and Development OFT Office of Fair Trading OJ Official Journal Ors Others Pvt Private Reg Regulation RPM Resale Price Maintenance RTD Refusal to Deal S Ct Supreme Court (US) SCC Supreme Court Cases SDNY Southern District of New York Supp Supplement TFEU Treaty on the Functioning of the European Union TV Television U/S Under Section UHD Ultra High Definition UKCLR UK Competition Law Reporter UOI Union of India US United States V Versus [v] .

..................................................................................................................................................29 Nandani Satpathy v PC Dani AIR 1978 SC 1025...........................................7 Guntaih v Hambamma (2005) 6 SCC 228...........................................2 [vi] ...........6 C O M P E T I T I O N A P P E L L AT E T R I BU N A L SCM Soilfert Ltd v CCI Appeal No 59/2015.................................6 Union of India v IndusInd Bank Limited (2016) 9 SCC 720......7 Super Cassettes Industries Limited v State of UP (2009) 10 SCC 531...................................................19 The Chairman SEBI v Shriram Mutual Fund (2006) 5 SCC 361.......................................28 Rama Varma Bharathan Thampuram v State of Kerala (1979) 4 SCC 782....................................................................................... 27................ 29 CIT Mumbai v Anjum MH Ghaswala (2002) 1 SCC 633...........................28 Shyam Sunder v Ram Kumar (2001) 8 SCC 24........................6 Thomas Cook (India) Limited v CCI Appeal No 48/2014……………………………………............19............................................7 CIT v Vatika Township Private Limited (2015) 1 SCC 1................................................................................. INDEX OF AUTHORITIES INDIAN CASES: S U P R E M E C O U RT CCI v SAIL (2010) 10 SCC 744....

......... 23 GE Energy order u/s 43A..................3 Deepa Narula v Taneja Developers and Infrastructures Ltd Case No 22/2012.......3 [vii] ....2........... Combination Registration No C-2014/08/202........... 6........ 4 Etihad order u/s 43A..................................10.......................8 EMC order u/s 43A.................................. Combination Registration No C-2015/07/293... 7 M/s ESYS Information Technologies Pvt Ltd v Intel Technologies Case No 48/2011...............................COMPETITION COMMISSION OF INDIA Abbot/Mylan order u/s 31(1)......11 Om Datt Sharma v M/s Adidas AG Case No 10/2014.16 Shri Ghanshyam Dass Vij v M/s Bajaj Corp Ltd Case No 68/2013............................................. Combination Registration No C-2015/01/241........ Combination Registration No C-2015/08/301.....20 Sumitomo Mitsui/Reliance Capital order u/s 31(1)...............4 ITC order u/s 43A........... Combination Registration No C-2013/05/122............ Combination Registration No C- 2014/12/235..........4........................................ 3..8 Piramal Enterprises order u/s 31(1).............. 21 MCX Stock Exchange Ltd v National Stock Exchange of India Ltd Case No 13/2009................ 4 Shamsher Kataria v Honda Siel Cars India Ltd Case No 3/2011............................2..........3 Alibaba/Jasper Infotech order u/s 31(1)...... 22............... Combination Registration No C-2017/02/485.....1 Fx Enterprise Solutions India v Hyundai Motor India Ltd Case No 36 & 82/2014............................ Combination Registration No C-2015/02/249.....................................................20......

.............13......................... 17 Jefferson Parish Hospital v Hyde 466 US 2 (1984)...............2 Vikrant Bhagi v M/s Media Video Limited Case No 28/2013............14 Fortner Enterprises Inc v United States Steel Corp 394 US 495 (1969)..........................Sun Pharma/Ranbaxy order u/s 31(7)............. 15 IBM Corporation v US 298 US 131 (1936)....17 International Salt Company v US 332 US 392 (1947)........ Combination Registration No C-2014/05/170......................................................... 31 Brooke Group Inc v Brown & Williamson Tobacco Corp 748 F Supp 344 (MDNC 1990).....................................................16.........................9 In re Data General Corporation Antitrust Litigation 490 F Supp 1089 (ND Cal 1980)................... 15............................13 [viii] ..............................14 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985)......................14... 29........................................................16 Illinois Tool Works Inc v Independent Ink Inc 126 S Ct 1281 (2006)...........................13..............................................................32 Brown Shoe Co v US 370 US 294 (1962).........17 Cascade Health Solutions v PeaceHealth 502 F 3d 895 (9th Cir 2007)....................23 LePage's Inc v 3M 324 F 3d 141 (3rd Cir 2003)..................... Combination Registration No C-2012/03/45………………………............................................................18 Thomas Cook order u/s 43A.8 Carpa v Ward Foods 536 F 2d 39 (5th Cir 1976).......................................8 US CASES: Advo Inc v Philadelphia Newspapers Inc 51 F 3d 1191 (3rd Cir 1995)......................... Combination Registration No C-2014/02/153…………………2 Vedanta order u/s 31(1)....... 17 Leegin Creative Leather Products Inc v PSKS Inc 551 US 877 (2007)........

.................10 BOOKS: [ix] ........30 Virgin Atlantic v British Airways (2000) OJ L 30/1...................33 Case 85/76 Hoffmann-La Roche v Commission (1979) ECR 461......................................................32 Virgin Atlantic Airways Ltd v British Airways 257 F 3d 256 (2nd Cir 2000)............Nobody in Particular Presents v Clear Channel Communications 311 F Supp 2d 1048 (D Colo 2004)..............9 Case T-41/96 Bayer AG v Commission (2000) ECR II-3383.................................................................................13 Northern Pacific Railway Company v US 356 US 1 (1958).............................................. 9 Case 7/97 Oscar Bronner v Mediaprint Zeitungs (1998) ECR I-7791.............9.31 United States v Socony Vaccum Oil Co 310 US 150 (1940)............................................................................................................................... 12 Case T-201/04 Microsoft v Commission (2007) ECR II-3601........................................8......................................14 Simpson v Union Oil Co 377 US 13 (1964).....................................8 Verizon Communications Inc v Law Offices of Curtis Trinko LLP 540 US 398 (2004)..............................................................................12 Case T-30/89 Hilti AG v Commission (1991) ECR II-1439...................................................................................14 EU CASES: Case 27/76 United Brands & Co v Commission (1978) ECR 207.............................................24..............................................13 Ortho Diagnostic Systems Inc v Abbot Labs Inc 920 F Supp 455 (SDNY 1996)................... 30 US v Grinnell Corp 384 US 563 (1966).

........................................... Oxford University Press 2010)........................ Lexis Nexis 2016).............. Edward Elgar Publishing 2003) .... EU Competition Law: Text.........21................................................26 Howard Marvel....................................... ‘Resale Price Maintenance: Economics Call for a More Balanced Approach’ (2007) 28 European Competition Law Review 657...... Guide to Competition Law (6th edn.................................................................................................. ‘Internet Retailing and Free Riding: A Post-Leegin Antitrust Analysis’ (2011) 14 Journal of Internet Law 1....................... Market Dominance and Antitrust Policy (2nd edn.........................................................15 [x] .............................................................................. ‘Bundling and Consumer Misperception’ (2006) 71(1) The University of Chicago Law Review 33.. 25 SM Dugar..Alison Jones & Brenda Sufrin..................................... 27 Mart Kneepkens..........31 Marina Lao......24 Marina Lao........ ‘Resale Price Maintenance: The Internet Phenomenon and 'Free Rider' Issues’ (2010) 55 Antitrust Bulletin 473........................... 22..................................................30 MA Utton................. 26...........21.25 Oren Bar-Gill..................... Aspen Publishers 2004)...........28 JOURNALS: Benjamin Klein & Kevin Murphy...................................25 Phillip Areeda & Herbert Hovenkamp..... Cases and Materials (4th edn... ‘Vertical Restraints as Contract Enforcement Mechanisms’ (1988) 31(2) The Journal of Law and Economics 265.................. Antitrust Law: An Analysis of Antitrust Principles and their Application (2nd edn............................................................................. ‘The Resale Price Maintenance Controversy: Beyond the Conventional Wisdom’ (1994) 63(1) Antitrust Law Journal 59.

................cfm?abstract_id=1476443>..........................com/sol3/papers.......in/sites/default/files/faq/ConsultationPrior250511........org/archives/volume4/issue_2/article_by_vikram_kanika........................................ and Unconvincing.....................................23 Herbert Hovenkamp....................................htm l>......22 Robert Steiner.................. ‘Tying Arrangements and Lawful Alternatives: Transaction Cost Considerations’ (20 February 2011) <https://papers......................gov...ssrn.........ssrn....................................................27 Thomas Krattenmaker & Steven Salop.......................... ‘Manufacturers’ Promotional Allowances.29 [xi] ...com/sol3/papers.......... ‘Free Riding: An Overstated.............24 Vikram Sobti & Kanika Chaudhary...cfm? abstract_id=1024221>........................................17 Marina Lao..................... Explanation for Resale Price Maintenance’ (16 December 2007) <https://papers... Free Riders and Vertical Restraints’ (1991) 36(2) Antitrust Bulletin 383..... ‘Resale Price Maintenance in the EU: in statu quo ante bellum?’ (21 September 2009) <https://papers.......................Robert Steiner.5 Eric Gippini-Fournier....................................................pdf>.. ‘How Manufacturers deal with Price Cutting Retailers: When are Vertical Restraints Efficient?’(1997) 65 Antitrust Law Journal 407.............ssrn.............32 ONLINE RESOURCES: Competition Commission of India...cci..........cfm? abstract_id=1763386>....................indialawjournal.. ‘Analysis of the Verdict of the Apex Court in CCI v Steel Authority of India Limited’ (23 May 2011) <http://www. ‘Anticompetitive Exclusion: Raising Rivals Costs to Achieve Power over Price’ (1986) 96 Yale Law Journal 209............ ‘Consultation prior to filing of notice of the proposed combination under section 6(2)’ (25 May 2011) <www.......................com/sol3/papers....................

.1................ 19 The Constitution of India 1950....... R E G U L ATI O N S & N O T I F I C AT I O N S : Combination Regulations 2011............................ 24...............10.............................. ‘Policy Roundtables Resale Price Maintenance’ 2008... 3........... 11.......................... 18.................20.................... 4 MCA Notification SO 674(E) (4 March 2016).4 OECD........................................ ‘DG Competition Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses’ 2005......... ‘Policy Roundtables on Refusal to Deal’ 2007...........................................S TAT U T ES ...... R E C O M M E N D AT I O N S & G U I D E LI N E S : Antitrust Modernization Commission...............5 MCA Notification SO 988(E) (27 March 2017)....................22....... 23 [xii] ............................... 10............... ‘Guidelines on Vertical Restraints’ 2010...............18 R E P O RT S .....33 OECD.......................... 8........................ ‘Report and Recommendations’ 2007.....7 The Competition Act 2002..........................................16 European Commission.................................................3......................................... ‘White Paper: Towards more effective EU merger control’ 2014.............................. 12 European Commission................. 26 European Commission...........................................

S TAT E M E N T O F J U R I S D I C T I O N In the present appeal under Section 53B of the Bohemian Competition Act. 2002 concerning the matter of Lutyen TV Pvt. Sandy Home Store & Competition Commission of Bohemia. 2002 concerning the matter of Lutyen TV Pvt. In the present appeal under Section 53B of the Bohemian Competition Act. [xiii] . Competition Commission of Bohemia. 2002 concerning the matter of Lutyen TV Pvt. Sandy Home Store & RK & Competition Commission of Bohemia. Ltd v. the respondents humbly submit to the Jurisdiction of this Hon’ble Tribunal. the respondent humbly submits to the Jurisdiction of this Hon’ble Tribunal. Ltd v. In the present appeal under Section 53B of the Bohemian Competition Act. the respondents humbly submit to the Jurisdiction of this Hon’ble Tribunal. Ltd v.

RK is a company specializing in the manufacture and sale of casting devices for UHD TVs with a 40% market share in the casting devices market. Its business model and one of the reasons for its success is that it gives significant discounts to its end customers. which was initially restricted to FHD TVs is now compatible with UHD TVs and is its most profitable business since 2015. Tojo’s casting device. 4. with showrooms across the territory of Bohemia and is renowned for stocking all television brands and casting devices and selling them as per consumer preferences. S TAT E M E N T O F FA C T S I. was previously the most popular manufacturer of CRT TVs but has witnessed declining profits during the past decade due to its failure to keep up with technology. a company incorporated under the Bohemian Companies Act. Lutyen TV Pvt. Sandy Home Store is Bohemia’s largest distributor of home electronics. Tojo. Ltd. 2. incorporated under the provisions of Bohemian Companies Act. It also manufactures many products including UHD televisions. (hereinafter Lutyen) is the largest television manufacturer in Bohemia. 3. the Tojo Stick. II. THE PARTIES 1. 1956 and trading on the National Stock Exchange of Bohemia. 1956 and specializing in the manufacture of UHD TVs. THE ACQUISITION [xiv] .

its senior management entered into an Asset Purchase Agreement with Lutyen’s CEO for the sale of Tojo’s casting technology division on 24 February 2017 in exchange for cash consideration payable to Tojo’s shareholders and the return of Lutyen’s 12% shareholding in Tojo. However. On 27 March 2017. III. Lutyen filed an appeal before the NCLAT challenging the CCB’s order. On 3 August 2017. 11. Tojo declined Lutyen’s offer to purchase its casting technology division. 5%. IV. 7. 10. and 3% shareholdings in Tojo via successive market purchases over 2016-17. and the latter would remain compatible with the TVs of all other brands. On 10 June 2017. [xv] . CCB in its review found that the transaction has the potential to cause an appreciable adverse effect on competition but approved the transaction on the condition that there would be no exclusive arrangement between Lutyen’s TVs and the Tojo Stick. CCB observed that Lutyen’s acquisition of Tojo’s casting technology division was notifiable under Section 5 of the Competition Act and directed Lutyen TV to file a belated notification of the transaction with it. 6. THE GUN-JUMPING 9. for a substantive review. CCB levied a penalty upon Lutyen for its failure to notify the acquisition of Tojo’s casting technology division and the earlier market purchases and consummating the transaction without its prior approval. Ministry of Corporate Affairs (hereinafter MCA) published a notification in the Gazette of Bohemia regarding certain changes in calculating the thresholds under Section 5 of the Competition Act.5. 8. determined to acquire the Tojo Stick business. Concerned with Tojo’s future. To capitalize on the festival holidays. Lutyen acquired 4%. Aggrieved. Lutyen proceeded to sell its Ultra HD TV and Tojo Stick as a package at the same price of the television and mandated the distributors to sell it as a package as well. POST-ACQUISITION PERIOD 12. Lutyen issued a press release announcing the acquisition of Tojo’s casting technology division.

I S S U E S F O R C O N S I D E R AT I O N [xvi] . CCB passed an order imposing a penalty of BNR 53 Crore on Lutyen. CASE NO. and failure to comply with commitments based on which the transaction was approved. B. Due to the discount restrictions imposed by Lutyen. 3 OF 2018 18. However. which mandated that distributors only provide end customers with a discount not exceeding 10% of MRP. Aggrieved. V. Sandy Home Store refused to stock its products and filed a complaint before the CCB alleging a violation of the provisions of the Competition Act. 19. Lutyen filed an appeal before the NCLAT. the CCB disagreed with the DG’s findings and dismissed the complaint. On request of certain distributors. CASE NO 1 & 2 OF 2018 14. The DG found Lutyen guilty of indulging in resale price maintenance. 17. Aggrieved by what it viewed as anti-competitive behavior. RK filed a complaint against Lutyen before the CCB. RK witnessed a major drop in its market shares.13. was due to the Lutyen’s bundling of its UHD TV with the Tojo Stick. Lutyen included a clause in its distributorship agreement. which in its view. THE CONFLICT: JUDICIAL PROCEEDINGS A. tying in. Lutyen filed a complaint against Sandy for discriminating against Lutyen’s products and refusing to stock them. Lutyen filed an appeal before the NCLAT. The DG in its investigation found that Sandy had specifically singled out Lutyen’s products. Aggrieved. in addition to a direction to abide by the commitments made during the merger review. 16. CCB found a prima facie violation and therefore. passed a common order for a detailed investigation under Section 26(1). 15.

The market purchases and the Asset Purchase Agreement (hereinafter APA) were inter- connected transactions since the APA mentions the market purchases. Whether Lutyen has violated the CCB’s order regarding the conditional approval of the acquisition? IV. Bohemian Competition Act. the execution [xvii] . Whether Lutyen has violated the gun-jumping provisions u/s 43A. Further. 2002 by indulging in a refusal to deal? SU MMA RY OF A R GU ME N TS I. Whether Sandy has violated Section 3(4)(d) of the Bohemian Competition Act. 2002? II. Whether Lutyen has violated Section 3(4)(e) of the Bohemian Competition Act. Whether Lutyen has abused its dominance in the UHD TV market to increase its sale in the casting devices market through a tie-in arrangement? III. LUTYEN HAS VIOLATED THE GUN-JUMPING PROVISION U/S 43A. 2002 by practicing resale price maintenance? V. I.

of the latter occurred only because of the market purchases. The practice causes AAEC through foreclosure of competition in the tied market by the elimination of even hypothetical equally efficient competitors and choice restriction on consumer’s part. The APA was a notifiable transaction and not exempted under the MCA notification since the notification is not retrospectively applicable and the defaulter becomes liable for a penalty as soon as he breaches the civil obligations. Thus. even when they might be only TV distributors. The appellant has used this dominance to conclude contracts with distributors that give rise to supplementary obligations having no connection with the nature of the contract or the commercial usage by mandating them to sell its UHD TV and Tojo Stick as a package. thus satisfying the mutual interdependence test. the arrangement amounts to a tie-in since consumers are restricted of the choice to buy the UHD TV alone. [xviii] . LUTYEN HAS ABUSED ITS DOMINANCE IN UHD TV MARKET TO INCREASE ITS SALE IN THE CASTING DEVICES MARKET BY INDULGING IN A TIE-IN ARRANGEMENT. Therefore. the appellant should have filed the two transactions as a single composite combination. or with a casting device from any other manufacturer. II. consumer preferences and because the market is characterized by high entry barriers. Further. LUTYEN HAS VIOLATED THE CCB’S ORDER REGARDING CONDITIONAL APPROVAL BY INDULGING IN AN EXCLUSIVE ARRANGEMENT. the appellant is trying to leverage its market position to enter the market for the sale of casting devices in Bohemia. even individually. III. The appellant is dominant in the market for the manufacture and sale of UHD TVs in Bohemia which is evident from its high market shares. the market purchases. Further. were notifiable because an investment in a competitor can never be ‘solely an investment’ or ‘in the ordinary course of business’.

which makes it even more harmful. V. The use of RPM is dispensable to achieve the alleged efficiencies. which has significant market power shall also lead to foreclosure of smaller rivals as the higher margins will entice the dealers to promote this brand over others. It will result in no accrual of benefits to customers due to increased prices in lieu of undesired services. Imposition of RPM by a manufacturer like Lutyen. It will drive out existing competitors. Further. SANDY HAS NOT INDULGED IN A REFUSAL TO DEAL U/S 3(4)(D). The appellant indulged in an exclusive arrangement between its TVs and the Tojo Stick thereby. dealer reimbursements to achieve the intended objectives. IV. it will also reduce dynamism and innovation at the distributor level. the part of the joint penalty imposed under section 42 on the appellant in case no. 2002. The order passed by the CCB will strictly fall under Section 26(8). as there are less restrictive. 1 & 2 of 2018 for violating the order regarding conditional approval is not appealable to NCLAT. The arrangement does not allow the end-customers to buy the appellant’s UHD TV without the Tojo Stick. as aggressive pricing is one of their major competitive strategies. more efficient alternatives like promotional allowances. The right to appeal is not a natural or inherent right but a statutory right and has to be deciphered taking into account [xix] . The resale price maintenance (hereinafter RPM) arrangement imposed by Lutyen shall have appreciable adverse effects on competition. The imposition of RPM on the request of certain distributors. especially the online retailers out of the market. THE RESALE PRICE MAINTENANCE IMPOSED BY LUTYEN VIOLATES THE PROVISION OF THE COMPETITION ACT. By restricting intra-brand competition. violating the CCB’s order for conditional approval under section 31(7) of the Act. It will also prevent the more efficient and low-cost distributors from passing on the benefits to the consumers.

the whole act and not merely a clause itself. Section 53A does not provide orders passed under the section 26(8) as an appealable order and therefore NCLAT does not have the jurisdiction to hear the appeal. The respondent’s conduct will not have exclusionary effects as the appellant have several sufficient distribution channels to distribute their products. [xx] . In view of the facts that price restraint covenants may itself have anti-competitive effects and refusal on the part of the respondent will have pro-competitive effects. Antitrust authorities cannot impinge on the right of an enterprise to choose its dealing partners.

LUTYEN HAS VIOLATED THE GUN-JUMPING PROVISION U/S 43A. ¶ 8. The respondent humbly submits that the earlier market purchases and the asset purchase agreement (hereinafter APA) were inter-connected transactions dependent on each other that invariably had the same intended effect. 2 Moot Proposition. The benefit of exemption under Item 1 Schedule 11 was not available for market purchases as they were a part of the composite combination. 3 Combination Regulations 2011. the party shall file a single notice covering all these steps3 and consummation of any such step without prior approval of the commission would be a violation and invite a penalty under the Act. and whether it 1 Combination Regulations 2011. A. 4 Etihad order u/s 43A. THE MARKET PURCHASES AND THE APA WERE INTERCONNECTED TRANSACTIONS. WRITTEN SUBMISSIONS ISSUE I. ¶2. the time gap between the said transactions. reg 9(4). Item 1 Schedule 1. [1] . Combination Registration No C-2013/05/122. reg 9(4). The mutual dependence or interconnection of a series of transactions depends on a number of factors like the subject of the transaction. ¶1. 5 Combination Regulations 2011. Further. the acquisition of Tojo’s casting technology division was notifiable and not exempted under the MCA notification2. Where the acquisition takes place in a number of interconnected steps. 4 The use of the word ‘shall’ in regulation 9(4) 5 makes the notification of each step of the composite combination mandatory and unavoidable at any stage.

Combination Registration No C-2015/02/249. there is a benefit of exemption to some steps of the combination.11 6 Thomas Cook order u/s 43A. which require evaluation on the factual matrix of each case. Combination Registration No C-2015/07/293. Lutyen had the intention to acquire controlling rights over Tojo when it started acquiring Tojo’s shares from the open market and therefore. Piramal Enterprises order u/s 43A. would be practically reasonable to view the transactions separately. 7 Thomas Cook order u/s 43A. and the return of Lutyen’s 12% shareholding in Tojo was part of the consideration in the APA. Combination Registration No C-2014/02/153. the transactions were such intricately related that the execution of APA happened only because of Lutyen’s market purchases. ¶4. In Thomas Cook9. the commission regarded the market purchases as an independent transaction because the success or failure of market purchases would have had no bearing on the notified transaction and the parties would have proceeded with the second transaction irrespective. should not be permissible. the Commission held that the same intent and purpose behind the transactions connected them. the two transactions were inter-connected. 9 Thomas Cook (India) Limited v CCI Appeal No 48/2014 (COMPAT). even though the first transaction did not mention the second one.10 Further. 11 Moot Proposition. 8 EMC order u/s 43A. 10 Moot Proposition.6 ¶3. 7 In EMC8. [2] . Combination Registration No C-2014/02/153. An entity might structure a combination such that on a standalone basis. ¶ 7. Combination Registration No C-2012/03/45. Vedanta order u/s 31(1). In the present case. and this could facilitate the structuring of transactions to evade compliance with the Act and therefore. ¶ 6. the subject matter of both the market purchases and the APA was same.

the minority shareholding in competitors is subject to investigation since it allows explicit or tacit 12 The Competition Act 2002. ALTERNATIVELY. 14 Sumitomo Mitsui/Reliance Capital order u/s 31(1). § 6(2). which does not entitle the acquirer to hold more than 25% of the total shares and does not lead to the acquisition of control over the target enterprise. This intent can be characterized through a number of factors. 16 Abbot/Mylan order u/s 31(1). [3] . Item 1 Schedule 1.13 I. The term ‘solely an investment’ involves an element of strategic intent. Combination Registration No C-2014/08/202. ¶5. 15 Piramal Enterprises order u/s 31(1).B. Combination Registration No C- 2014/12/235. Alibaba/Jasper Infotech order u/s 31(1). the parties notified a non-controlling minority acquisition of 4. 13 Combination Regulations 2011. ¶6. is exempted from notification12. Combination Registration No C-2015/07/293. which include but are not limited to the existence of an understanding/alliance14. Combination Registration No C-2015/08/301.18 Even in EU. In Alibaba/Jasper17. ¶7. Combination Registration No C-2015/02/249. press release labeling the acquisition as strategic15 or the capacity of acquirer as a competitor of the target16.14% since the two parties were present in the same market. An acquisition of shares. ITEM 1 SCHEDULE 1 DID NOT EXEMPT THE NOTIFICATION OF THE MARKET PURCHASES. Acquisitions made in a competing business or in a vertically related market would not necessarily be termed ‘solely as investment’ even if they meet the exemption thresholds. 17 Alibaba/Jasper Infotech order u/s 31(1). Combination Registration No C-2015/08/301. THE MARKET PURCHASES WERE NEITHER ‘SOLELY AN INVESTMENT’ NOR ‘IN THE ORDINARY COURSE OF BUSINESS’. provided that it is ‘solely an investment’ or ‘in the ordinary course of business’. 18 EMC order u/s 43A.

[4] . which includes a press release or statement by parties labeling the acquisition as strategic22 or unilateral board resolutions that qualify as ‘other documents’ under section 6(2)23 and require notification within 30 days of execution. ¶ 4. ¶ 6. thereby harming competition. ¶8. coordination between the competitors. Item 1 Schedule 1 Explanation (A). which includes no intention to participate in affairs and management of the target. 23 GE Energy order u/s 43A. Lutyen’s intent was not to invest in Tojo but to acquire controlling rights over the company and hence. the present acquisition of shares does not qualify for the exemption since the Lutyen’s board documents and presentations suggest its intention to acquire controlling rights over Tojo’s business. 25 Moot Proposition.24 Further. 24 ITC order u/s 43A.21 The Commission derives intent from circumstantial evidence. 19 The market purchases were not ‘solely an investment’ since Tojo is not only Lutyen’s competitor in the market for sale and manufacture of TVs in Bohemia but also operates in the vertically linked market for the sale and manufacture of casting devices. Combination Registration No C-2017/02/485. Combination Registration No C-2015/02/249. 21 Moot Proposition. as in the present case. ‘White Paper: Towards more effective EU merger control’ 2014. 20 Combination Regulations 2011. an investment in a company witnessing declining profits for almost a decade 25 would not be a wise decision and as such. Strategic investments in a target company present in the same or vertically linked market or acquisition of shares of a target directly related to the business activity of the acquirer cannot be termed ‘solely an investment’ or ‘in the ordinary course of business’. Combination Registration No C-2015/01/241. 22 Piramal Enterprises order u/s 31(1). ¶9. an acquisition of less than 10% of total shares of the target is ‘solely an investment’ subject to certain conditions. 19 European Commission. Further. 20 However. the market purchases do not qualify for an exemption under Item 1 Schedule 1.

Therefore. The pre-amended statute is unambiguous and clear in meaning.e. The respondent humbly submits that the turnover and assets used as thresholds for exemption are the total assets and turnover of the target enterprise. [5] . THE MCA NOTIFICATION DATED 27 MARCH 2017 DID NOT EXEMPT LUTYEN FROM NOTIFYING THE ACQUISITION OF TOJO’S CASTING TECHNOLOGY DIVISION. until 26 March. I.C. the appellant was obligated to notify the execution of APA within 30 days from 24 February i. and a plain reading of the notification dated 4 March 2016 would suggest the use of entire turnover and assets of the target enterprise for determining the exemption’s applicability. which clearly indicates its intention to jump the gun. the intention of the parties 26 MCA Notification SO 674(E) (4 March 2016).in/sites/default/files/faq/ConsultationPrior250511. as laid down by the CCI. 28 ITC order u/s 43A. therefore.pdf>. 27 Competition Commission of India. the appellant consummated the transaction without the approval of the Commission. the cause of action when the thirty-day period ends.cci. ¶11. The cause of action for proceedings under section 43A arises only when the acquiring entity has failed to notify the Commission within 30 days of executing the agreement related to the acquisition under section 6(2).28 ¶12. In the present case. Combination Registration No C-2017/02/485.27 Further.gov. “The penalty is attracted as soon as contravention of the statutory obligations as contemplated by the Act is established and. which was also not availed by the appellant. THE APPLICABLE LAW IS THE PRE-NOTIFICATION LAW WHEN THE CAUSE OF ACTION ARISES. ¶10. ‘Consultation prior to filing of notice of the proposed combination under section 6(2)’ (25 May 2011) <www.26 The Commission also provides a facility for pre-filing consultation concerning combinations.

32 The notification33 not only changes the manner in which the value of assets and turnover for application of section 5 is to be determined but also “the principle determining the applicability of De-Minimis Exception itself”. the failure to notify the acquisition cannot be justified on grounds of bona fide mistake or indeliberate defiance of the law. the levy of penalty is justified under the pre-notification law and secondly. 33 Moot Proposition. it should apply prospectively. ¶ 8. HAS A PROSPECTIVE OPERATION. the breach of the obligations had already happened when the law changed and therefore. 30 SCM Soilfert Ltd v CCI Appeal No 59/2015 (COMPAT). the Courts should construe it as prospective. and that if the wording of the statute could lead to either of the two interpretations. Combination Registration No C-2017/02/485. thereby contravening the ex-ante nature of combination regulations 30. Further. which seeks to check and prevent anti-competitive effects of a combination before it is given effect so that the effects do not become irrecoverable later. [6] .”29 Firstly. 32 Shyam Sunder v Ram Kumar (2001) 8 SCC 24. ¶14.34 The 29 The Chairman SEBI v Shriram Mutual Fund (2006) 5 SCC 361. ¶13. A substantive change in law can never have a retrospective operation because it seeks to alter and remedy the existing stance of law. THE NOTIFICATION AMENDS THE SUBSTANTIVE APPLICATION OF RELEVANT SECTIONS AND THEREFORE. the parties should also be penalised for violating section 6(2A) and consummating the transaction without the commission’s prior approval. II. 31 Union of India v IndusInd Bank Limited (2016) 9 SCC 720. 34 ITC order u/s 43A. 31 It is a well-identified rule of interpretation that unless a statute amends the matter of procedure. committing such violation becomes immaterial.

The respondent humbly submits that the appellant is dominant in the market for the manufacture and sale of Ultra High Definition Television (hereinafter UHD TVs).35 ¶15. the MCA notification does not apply retrospectively. ¶16. and the market structure.37 Therefore. the size of competitors. evident from its market share. which amounts to a tie-in arrangement that has caused and is likely to cause appreciable adverse effects on competition (hereinafter AAEC). 36 CIT v Vatika Township Private Limited (2015) 1 SCC 1. Further. it is necessary to first determine the relevant market in which that particular enterprise was 35 MCA Notification SO 988(E) (27 March 2017). LUTYEN IS DOMINANT IN THE RELEVANT TYING MARKET FOR MANUFACTURE AND SALE OF UHD TV.36 The present notification nowhere contains words that show the legislature’s intent to make the notification retrospective in nature. ISSUE II. 37 CIT Mumbai v Anjum MH Ghaswala (2002) 1 SCC 633. [7] . A. ¶17. the appellant has abused this dominance through its arrangement of selling the UHD TV and Tojo Stick as a package. LUTYEN HAS ABUSED ITS DOMINANCE IN UHD TV MARKET TO INCREASE ITS SALE IN THE CASTING DEVICES MARKET BY INDULGING IN A TIE-IN ARRANGEMENT. the press release labeling the notification does not have the force of law and cannot alter the position established by the statute. In order to determine whether an enterprise is abusing its dominant position or not. present notification is only applicable for a period of five years. The legislation changing the ensuing rights or obligations is prospective in nature unless the legislative intent shows otherwise. Further. which also strengthens the claim that it is not a clarification of the existing law but an addition instead.

the closest substitute available in the upstream market.41 In the present scenario. 43 Illinois Tool Works Inc v Independent Ink Inc 126 S Ct 1281.39 I. [8] . the CCB has correctly identified the upstream market as the ‘manufacture and sale of UHD TV’ and downstream market as the ‘manufacture and sale of casting devices’. 1293 (2006). RELEVANT MARKET. Case 27/76 United Brands & Co v Commission (1978) ECR 207. However. The Commission should consider the factors laid down in section 19 while determining the relevant market (both product market and geographical market). 39 Deepa Narula v Taneja Developers and Infrastructures Ltd Case No 22/2012 (CCI). and further. 42 Om Datt Sharma v M/s Adidas AG Case No 10/2014 (CCI). 43 Therefore. 40 The Competition Act 2002. US v Grinnell Corp 384 US 563 (1966). 19(7). § 19(6). 38 Vikrant Bhagi v M/s Media Video Limited Case No 28/2013 (CCI). 40 It is pertinent to consider the substitutes available for the product while defining the relevant product market. Brown Shoe Co v US 370 US 294 (1962). the relevant market is the market of tying product since that particular market is subject to abuse. compatible with the casting devices is an FHD TV. 41 Case 27/76 United Brands & Co v Commission (1978) ECR 207. 38 The second issue would be whether the enterprise abused its dominant position in any manner in that relevant market in terms of Section 4 of the Act. alleged to be in a dominant position. ¶18. the quality and price difference do not provide the required demand- side substitutability42. while the end use of the products is same. in a tying claim.

1293 (2006).44 The Commission should consider the various factors laid down in section 19 while determining whether an enterprise enjoys a dominant position. MARKET SHARE. it is essential to prove that the enterprise enjoys a dominant position in the market for the tying product. II. [9] . Case T-30/89 Hilti AG v Commission (1991) ECR II-1439. 47 Case 85/76 Hoffmann-La Roche v Commission (1979) ECR 461. 47 In the market for manufacture and sale of UHD TVs in Bohemia. Lutyen has a huge market share of 45% with the rest of market diffused between several manufacturers in such a way that no manufacturer exerts sufficient competitive constraints on Lutyen. § 19(4). 48 European Commission. where the barriers to entry include both legal barriers and strategic barriers. The existence of a dominant position may derive from several factors which. ¶20. Where barriers to entry by firms outside the market are high. ¶21. evidence of the existence of a dominant position. ¶ 90. are not necessarily determinative but among these factors.46 Very large shares are in themselves. M/s ESYS Information Technologies Pvt Ltd v Intel Technologies Case No 48/2011 (CCI).45 A. MARKET STRUCTURE AND ENTRY BARRIERS. ¶ 41. ‘DG Competition Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses’ 2005. ¶19. 48 44 Illinois Tool Works Inc v Independent Ink Inc 126 S Ct 1281. the fact that one firm has a very high market share is indicative of significant market power to constitute dominance. ¶ 34-40. In a tying claim. B. the existence of very large market shares is highly important. DOMINANCE. ¶ 41. and save in exceptional circumstances. 46 Case 85/76 Hoffmann-La Roche v Commission (1979) ECR 461. taken separately. 45 The Competition Act 2002.

LUTYEN HAS ABUSED ITS DOMINANCE TO INCREASE ITS SALES IN THE CASTING DEVICES MARKET U/S 4(2)(D) AND 4(2)(E).49 the Court of First Instance held that the assessment of the dependence relationship between the undertaking in question and its customers is relevant for the finding of a dominant position in a classical sense. § 4(2)(d). a new entrant would require a huge capital for technology. thus making the entry a challenging task. In the present case. CONSUMER PREFERENCE. In the case of British Airways. have no connection with the subject of such contracts”. ¶22. ¶23. by their nature or according to commercial usage. the consumers have a greater preference for Lutyen’s products since it is the leading market player. 51 MCX Stock Exchange Ltd v National Stock Exchange of India Ltd Case No 13/2009 (CCI). [10] . 50 The Competition Act 2002. and in the establishment of a nationwide distribution network. In a UHD TV market. even after Sandy (the second biggest player) offers greater discounts on its UHD TVs. § 4(1). B. C. Section 4(2)(e) recognizes the fact that an enterprise may use its position of strength in one market to leverage its position and gain an unfair advantage in the other market.51 Section 4(2)(d) is applicable where a dominant enterprise “makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which. The Competition Act.52 49 Virgin Atlantic v British Airways (2000) OJ L 30/1. ¶ 220. 52 The Competition Act 2002. set-up of manufacturing plants. 2002 prohibits the abuse of dominant position 50 rather than the dominance itself.

which are two separate products and thus coerced the consumers such that they can only buy the more preferred UHD TV if they take the Tojo Stick with it. Lutyen’s distributorship agreement is only with respect to the TVs and by providing the casting device as an additional product. Even while selling the two together. ¶ 12. thereby creating a situation of exclusivity with the Tojo Stick. In the distributorship agreement. I. Lutyen added a clause that the distributors should sell Lutyen TVs together with the Tojo Stick as a package. it is necessary to establish that two products are distinct. 53 This is a supplementary obligation by commercial usage since the TV and the casting device are two separate products that the distributor may not sell together.¶24. 54 Case T-201/04 Microsoft v Commission (2007) ECR II-3601. [11] . ¶27. In a tying claim. LUTYEN HAS ALSO INDULGED IN A TIE-IN ARRANGEMENT UNDER SECTION 3(4)(A). Evidence that two products are distinct can be direct i. ¶26. This practice has led to exclusionary effects in the market for manufacture and sales of casting devices. Not only does the clause restrict consumer choice but it also does not allow the distributors to sell any other casting device with Lutyen TVs. Further. along with the clause to sell both as a package. The respondent submits that Lutyen has indulged in tying of UHD TV and casting devices.e. the consumers should get the choice to buy any TV or casting device together. UHD TV AND CASTING DEVICE ARE TWO DISTINCT PRODUCTS. whether or not customers would buy the two products separately if given choice 53 Moot Proposition. ¶25. C. This is against the very nature of operation of independent distributors who provide several choices with respect to the product they offer. 54 This distinctness does not necessarily mean that they have a separate market for sale but depends on the demand for the product. Lutyen is virtually forcing the distributor to sell an undesired product if he wants access to Lutyen’s UHD TVs.

a specialized casting device manufacturer. THE CONDUCT IS COERCIVE TOWARDS THE CONSUMERS. the existence of independent specialized companies that only manufacture the tied product without the tying product.58 ¶29. Clarification 21. 12-15 (1984).59 “It is enough that the tying arrangement has forced the customer to make a less than optimal choice in the tied product market. 55 In the present case.”60 In the present case. or indirect evidence i. 59 Nobody in Particular Presents v Clear Channel Communications 311 F Supp 2d 1048. 60 Jefferson Parish Hospital v Hyde 466 US 2. 56 Moot Proposition. is a well-regarded exception to the economic principle that lower pricing is equivalent to consumer welfare. and 55 European Commission. and RK. 1091-92 (D Colo 2004). has the highest market share in casting devices market.56 II. [12] . a large number of manufacturers only produce the casting devices without producing the UHD TVs. 512 (1969). 6 (1958). ¶ 185-186. the customers cannot obtain the UHD TV without buying the Tojo Stick with it. 57 Northern Pacific Railway Company v US 356 US 1. A tie-in arrangement does not require below-cost pricing for a certain period followed by exclusion of rivals and exorbitant prices in the recoupment period like a conventional predatory pricing claim. ¶28. forcing the customers to buy things they do not want. There is an assumption of tying if an enterprise with substantial market power over the tying product does not allow the customers to purchase the tying product without the tied product. ‘DG Competition Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses’ 2005.57 The idea that ‘inducement’ or ‘coercion’ i.e. Fortner Enterprises Inc v United States Steel Corp 394 US 495.e. ¶ 15. 58 Case 85/76 Hoffmann-La Roche v Commission (1979) ECR 461.

THE CONDUCT CAUSES AAEC. To determine whether a practice would exclude equally efficient rivals in the competitive tied market. ¶30. Ortho Diagnostic Systems Inc v Abbot Labs Inc 920 F Supp 455.61 The efficiency arguments about a pro-consumer practice with above-cost discounts are immaterial when it leads to exclusion of equally efficient rivals. III. which leads to exclusionary competitive harm. foreclosing the sales opportunities of its rivals in the tied market. [13] . the Courts use the discount-attribution test wherein they attribute 61 LePage's Inc v 3M 324 F 3d 141. ¶31. While disallowing tying arrangements. Section 19(3) lays down the factors to determine whether a practice would cause AAEC or not. Courts usually rely on the premise that packaged discounts can exclude an equally efficient competitor who does not manufacture “equally diverse group of products”. 601-605 (1985). 471 (SDNY 1996). For a tying claim to be successful. 62 Virgin Atlantic Airways Ltd v British Airways 257 F 3d 256 (2nd Cir 2000). 155 (3rd Cir 2003). the arrangement should cause or be likely to cause AAEC. 63 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585. therefore. Advo Inc v Philadelphia Newspapers Inc 51 F 3d 1191 (3rd Cir 1995). An enterprise with a dominant position in one market may extend it to a related market. it is coercive towards consumers who want to buy Lutyen’s UHD TV but another casting device. A. 62 Even in cases of above-cost discounts.63 ¶32. a dominant player does not have the freedom to take certain actions that a company in a competitive market may take because the market conditions are entirely different. IT FORECLOSES COMPETITION IN THE CASTING DEVICES MARKET AND WOULD DRIVE OUT HYPOTHETICAL EQUALLY EFFICIENT COMPETITORS.

which rarely happens. Lutyen is offering the Tojo Stick for virtually zero price during the introductory period and hence the aforementioned analysis applies perfectly. B. ‘Bundling and Consumer Misperception’ (2006) 71(1) The University of Chicago Law Review 33. THERE IS NO ACCRUAL OF BENEFITS TO CONSUMERS AND THE PRACTICE ONLY RESTRICTS CONSUMER CHOICE. 47. ‘Bundling and Consumer Misperception’ (2006) 71(1) The University of Chicago Law Review 33. 47. [14] . lower-priced. 64 Cascade Health Solutions v PeaceHealth 502 F 3d 895. 66 Oren Bar-Gill. Thus. 67 Oren Bar-Gill. who might even be offering a superior product. ¶33. and more innovative products.67 In the present case. ¶ 15.64 If the total discount is more than the production cost of the tied product. Lutyen’s practice leads to foreclosure of competition in the casting devices market by the exclusion of equally efficient competitors evident from RK’s loss of profits65. Therefore. The practice of offering a product at high discount or zero price for an introductory period is common and works on the principle of consumer misperception. the total discount is equal to the price of the Tojo Stick. the other manufacturers cannot compete in the casting device market since they would have to offer an impossible discount equal to the price of Tojo Stick. the total discount on the package to the tied product. 65 Moot Proposition. 66 The seller acts on the consumers’ miscalculation of choice that they will buy the product and terminate their association after the introductory period. then the practice is deemed to have exclusionary effects. 916 (9th Cir 2007). Lutyen offers the package at the price of the UHD TV alone and therefore. Exclusion of an equally efficient rival harms consumers because competition results in higher quality. ¶34. In the present case.

70 Further. In a tying claim. merits or presence of superior substitutes. 12-15 (1984). 512 (1969) (White dissenting). [15] . The creation of entry barriers happens when the enterprise provides sufficient discounts on the tied product by transferring greater part of the potential losses (or reduced profits) to the dominant tying product. the package deprives them of their choice to purchase a casting device other than Tojo Stick and hence.¶35. when consumers are purchasing Lutyen’s Ultra HD. the arrangement is coercive towards consumers who want to use any other casting device with the Lutyen’s UHD TVs that effectively enjoy great customer preference. then the new entrant in the tied product market would not be able to overcome the short-term losses because it does not have such diversified product offering. 68 In the present case. 68 Jefferson Parish Hospital v Hyde 466 US 2. the Commission should look beyond the efficiencies of such anti-competitive arrangement. ¶36. ¶37. ‘Report and Recommendations’ 2007. 69 The ‘leverage theory’ states that an enterprise dominant in the tying market may use it to assume market power in the competitive market for the tied product through the construction of strategic entry barriers hindering entry into the tying market. Where an arrangement provides apparent short-term efficiencies but leads to the creation of structural entry barriers and exclusion of competitors. if the tying market has entry barriers. 69 Shamsher Kataria v Honda Siel Cars India Ltd Case No 3/2011 (CCI). the plaintiff is only required to prove that the defendant has restricted consumer choice through coercion to take the tied product. like the UHD TV market in the present case. Fortner Enterprises Inc v United States Steel Corp 394 US 495. C. irrespective of its quality. besides the obvious exclusion of incumbent rivals. 70 Antitrust Modernization Commission. 95-96. IT CREATES BARRIERS TO NEW ENTRANTS IN THE CASTING DEVICES MARKET.

75 Carpa v Ward Foods 536 F 2d 39. without coercing the customer to buy the second product from him. D. IBM Corporation v US 298 US 131 (1936). the Court even went on to state that quality control could never be a valid defense to any exclusionary anti-competitive practice and there is no valid ground for an exception where goodwill is not at stake or a less restrictive alternative exists.com/sol3/papers. [16] . RK’s casting device is the most preferred casting device by consumers 71 International Salt Company v US 332 US 392 (1947). ¶39. 74 Jefferson Parish Hospital v Hyde 466 US 2.cfm? abstract_id=1763386>. When the customer bears the consequences of choosing a bad product. In fact. 73 Even when the second product’s quality directly affects the performance of the first product. International Salt Company v US 332 US 392 (1947). the Lutyen’s UHD TV is compatible with other casting devices in the market. ‘Tying Arrangements and Lawful Alternatives: Transaction Cost Considerations’ (20 February 2011) <https://papers. ¶38. 71 In IBM72. 75 In the present case. 73 Herbert Hovenkamp. 47 (5th Cir 1976). In re Data General Corporation Antitrust Litigation 490 F Supp 1089 (ND Cal 1980). QUALITY CONTROL IS NOT A VALID DEFENSE WHEN LUTYEN COULD HAVE ADOPTED LESS RESTRICTIVE MEANS. there exists no rationale for tying. 26 (1984). 72 IBM Corporation v US 298 US 131 (1936). the appellant could have easily withdrawn from the quality protection exercise through a disclaimer of specifications for the second product to work perfectly well with the first product. The Courts have repeatedly rejected the quality control defenses where the tying arrangement was not necessary and there were alternatives to protect quality. he will reasonably buy the second product with best rate-quality match. 74 If a rival in the tied market can supply the tied product of the same quality.ssrn.

[17] . and a mere statement of the specifications of casting devices best compatible with Lutyen’s UHD TV would have sufficed. the appellant has not respected its commitments. by indulging in an exclusive arrangement. art 19(6). ¶ 10. 76 Moot Proposition. 77 Sun Pharma/Ranbaxy order u/s 31(7). 78 The Constitution of India 1950.76 ¶41. Combination Registration No C-2014/05/170. iii]. even if it is neither ordinarily covered nor punishable under Act. C.77 Even the fundamental right to trade lays down certain exceptions. The respondent humbly submits that Lutyen has violated the CCB’s order for conditional approval. The CCB had granted approval to the combination under section 31(7) of the Act. ¶40. subject to which the CCB had approved the combination under section 31(7) of the Act. While evaluating whether a combination is likely to cause AAEC. which includes an existing law restricting the absolute exercise of the freedom. 78 The practice is exclusionary since the customer’s choice to obtain the UHD TV with a casting device other than Tojo Stick is restricted and it has caused AAEC as proved in [II. without restricting the competition in the market ISSUE III. made contingent upon conditions that the appellant would not indulge in an exclusive arrangement between its televisions and Tojo Stick and that the Tojo Stick would remain compatible with other brand’s TVs. However. LUTYEN HAS VIOLATED THE CCB’S ORDER REGARDING CONDITIONAL APPROVAL BY INDULGING IN AN EXCLUSIVE ARRANGEMENT. the CCB is free to allow the combination after forbidding any practice that will lead to AAEC in those circumstances.

¶ 17. 83 The Competition Act 2002. 79 The CCB had found the appellant in violation of its order under section 31 of the Act regarding conditional approval. Therefore. The definition of RPM under Explanation (e) to Section 3(4) of the Act 83 included “any agreement to sell goods on condition that the prices to be charged on the resale by 79 Moot Proposition. ¶44. which would invite a penalty under section 42 since the use of the word ‘shall’80 mandates that the defaulter should be penalized. which is a statutory right. 2 of 2017. ¶42. 2002.81 When the legislature had specifically mentioned appealable orders and directions. ¶43. 80 The Competition Act 2002. THE RESALE PRICE MAINTENANCE IMPOSED BY LUTYEN VIOLATES THE PROVISION OF THE COMPETITION ACT. The respondents humbly submit that Lutyen TV by indulging in Resale Price Maintenance (hereinafter RPM) which is prohibited under Section 3(4)(e) of the Competition Act is causing appreciable adverse effects to competition in Bohemia. § 42. § 3(4)(e). THE PART OF JOINT PENALTY CORRESPONDING TO THE VIOLATION OF CCB’S ORDER REGARDING CONDITIONAL APPROVAL IS NOT APPEALABLE. 81 Super Cassettes Industries Limited v State of UP (2009) 10 SCC 531. it intended to exclude all the other orders from the appeal and that any other construction with respect to the Act would make the application and wording of Section 53B futile. [18] . ¶45.A. ISSUE IV. The CCB imposed a joint penalty in Case No. 1 and Case No. 82 Therefore. this part of the penalty imposed under section 42 is not appealable to NCLAT and the decision of the CCB is final and binding on the appellant. a part of the joint penalty was under section 42 of the Act for violating CCB’s order for conditional approval of the acquisition under section 31(7) of the Act. 82 CCI v SAIL (2010) 10 SCC 744. The relevant provisions of law may take away the right to appeal.

the fact that one firm has a very high market share is indicative of significant market power. This would include fixing the distribution margin or the maximum level of discount.84 A. The criteria set out to gauge the possible anti-competitive effects include the presence of significant unilateral upstream market power.(c) of section 19(3) deal with factors which restrict the competitive process in the markets where the agreements operate (negative factors) while clauses (d)-(f) deal with factors which enhance the efficiency of the distribution process and contribute to consumer welfare (positive factors). 87 M/s ESYS Information Technologies Pvt Ltd v Intel Technologies Case No 48/2011 (CCI). 274. ¶46. ¶48. the manufacturer can effectively fix the minimum resale price.87 84 Fx Enterprise Solutions India v Hyundai Motor India Ltd Case No 36 & 82/2014 (CCI). ¶49. 85 Shri Ghanshyam Dass Vij v M/s Bajaj Corp Ltd Case No 68/2013 (CCI). It is pertinent to note that clauses (a). 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 respondents humbly submit that the appellant is indulging in RPM by mandating the maximum permissible discounts on its products. By fixing the maximum resale price as well as the maximum amount of discount. ‘Policy Roundtables Resale Price Maintenance’ 2008. which is causing AAEC in Bohemia. it was established that in order to determine if the agreements entered between a manufacturer and its distributors are in the nature of ‘resale price maintenance’. In Bajaj85. [19] . An agreement that has the direct or indirect object of establishing a fixed or minimum resale price level may restrict competition. 86 OECD. THE RPM AGREEMENT CAUSES AAEC. the factors listed in 19(3) need to be satisfied in order to prove AAEC is caused in the market.86 Where barriers to entry by firms outside the market are high. ¶47.

RPM SHALL DRIVE OUT EXISTING COMPETITORS.90 Hence. RPM would eliminate this inherent advantage 89 and because the nature of the services that the manufacturer may want to ensure is such that Internet retailers are physically incapable of providing them. I. Antitrust Law: An Analysis of Antitrust Principles and their Application (2nd edn. a manufacturer with sufficient market power may implement RPM to foreclose competition from smaller rivals.¶50. [20] . RPM will not succeed in inducing these services from them and will ultimately drive them out of the competition. WILL LEAD TO FORECLOSURE OF COMPETITION. even where such advice is 88 Moot Proposition. ‘Resale Price Maintenance: The Internet Phenomenon and 'Free Rider' Issues’ (2010) 55 Antitrust Bulletin 473. ¶53. AND WILL NOT IMPROVE THE DISTRIBUTION SYSTEM. The respondents humbly submit that this RPM agreement shall have a detrimental effect on existing competitors resulting in their exit from the market. In the present case. It is widely acknowledged that Internet retailers’ overall lower prices. a new entrant would require a huge capital for technology. In banning discounts. thus making the entry a challenging task. the barriers to entry are high. In addition to possession of 45% market shares by Lutyen 88. which may arise because of this practice. are a source of competitive advantage for the sector. may entice the latter to favor the particular brand over rival brands when advising customers. In a UHD TV market. 89 Marina Lao. and in the establishment of a nationwide distribution network. Aspen Publishers 2004). ¶51. the anti-competitive effects generated due to RPM clearly outweigh any pro-competitive effects. 90 Phillip Areeda & Herbert Hovenkamp. ¶ 10. The increased margin that RPM may offer distributors. made possible by their substantially lower operating costs. set-up of manufacturing plants. Consumers are deceived when multi-brand dealers recommend a brand solely because of insulation from intra-brand price competition. ¶52.

94 Fx Enterprise Solutions India v Hyundai Motor India Ltd Case No 36 & 82/2014 (CCI). [21] . It prevents dealers with lower cost structures from passing on 91 European Commission. 94 In that instance. It would prevent the retailers with better distribution systems and lower cost structures from charging lower prices by the agreement. The RPM imposed by Lutyen shall also lead to reduced dynamism and innovation at the distribution level.91 Permitting price competition for popular brands as Lutyen would encourage new or existing multi-brand dealers to develop innovative and cost-efficient ways to provide different services92 but restricting price competition shall leave little incentives for such innovation. not in the interest of these customers. RPM hinders the incentives of more efficient retailers from entering the market and acquiring sufficient market power through low prices. the manufacturer does not establish the practice to stimulate services or to promote its brand but to give inefficient retailers higher profits. ¶ 224. 92 Robert Steiner. is particularly problematic since it helps maintain the collective interest of the downstream players. Antitrust Law: An Analysis of Antitrust Principles and their Application (2nd edn. 93 Phillip Areeda & Herbert Hovenkamp. ¶55. ¶54. ‘How Manufacturers deal with Price Cutting Retailers: When are Vertical Restraints Efficient?’(1997) 65 Antitrust Law Journal 407. Aspen Publishers 2004). The respondents submit that a vertical restraint may be identical to that to which a wiser manufacturer would have adopted on its own. i.e. However. the distributors. causing consumer harm.93 ¶56. RPM. The respondents humbly submit that imposition of RPM by Lutyen. which has significant market power shall have exclusionary effects on smaller rivals as the distributors in Bohemia will be tilted towards promoting Lutyen’s brand due to the increased margins. By restricting price-competition between distributors. or not to sell these rival brands at all. when enforced at the instance of the distributors/dealers. such restraints must be doubted where a manufacturer does not itself desire it. ‘Guidelines on Vertical Restraints’ 2010. to maintain higher resale prices.

RPM SHALL NOT LEAD TO ANY ACCRUAL OF BENEFITS TO THE CONSUMERS. 98 As a result. ‘Resale Price Maintenance in the EU: in statu quo ante bellum?’ (21 September 2009) <https://papers. which inevitably leads to consumer harm. ¶ 12. efficient online & offline (Sandy) distributors are being denied the opportunity to pass on their efficiency benefits to the consumers. even the distributors operating efficiently and on low-cost have to charge higher prices to the consumers. Thus.95 In the present case. 97 OECD. their superior efficiency to the consumer. ‘Policy Roundtables Resale Price Maintenance’ 2008. RPM decreases the pricing pressure on competing manufacturers when a dominant player imposes minimum selling price restrictions in the form of maximum discount that the dealers can offer. 99 Fx Enterprise Solutions India v Hyundai Motor India Ltd Case No 36 & 82/2014 (CCI).100 95 Eric Gippini-Fournier.cfm?abstract_id=1476443>. causes consumer harm.com/sol3/papers. there is a greater likelihood that the restraint supports an inefficient retailer. 98 Moot Proposition.99 The RPM arrangements will lead to higher prices of competing brands as Lutyen is the largest television manufacturer in Bohemia and has gained significant market power in the market of sale of UHD Televisions across Bohemia in the last few years. ¶58. [22] . 218.97 Lutyen imposed RPM on the request of certain distributors. resulting in price increases. ¶ 3. 100 Moot Proposition. ¶57. minimum retail price RPM has the effect of reducing inter-brand price competition in addition to reducing intra-brand competition. If there is any evidence suggesting that retailers were the impetus for a vertical price restraint. Preventing price competition on a popular brand would result in higher prices of competing brands as well. II.ssrn. 96 The use of RPM to sustain this collusion. 96 Leegin Creative Leather Products Inc v PSKS Inc 551 US 877 (2007).

such services need not be worth their price to the consumers who receive.102 The direct effect of RPM is a price increase. ¶60.cfm? abstract_id=1024221>. 104 Mart Kneepkens. He may choose to provide no services at all and sell the product at a higher resale margin 104.¶59. RPM does not guarantee a high quality of services on the distributor’s end. While protection of provision of services may indeed be in the interest of manufacturers. ¶ 13. 105 Moot Proposition. ‘Resale Price Maintenance: Economics Call for a More Balanced Approach’ (2007) 28 European Competition Law Review 657.ssrn. 106 Howard Marvel. Sandy Home Store has a large portfolio enjoying economies of scale105 and possesses a ‘retailer brand image’. 102 Marina Lao. The welfare effects of restraints encouraging dealer services are ambiguous when consumers differ in their desire for service as it deprives them of the choice to obtain the 101 United States v Socony Vaccum Oil Co 310 US 150 (1940). 103 European Commission. which would definitely be against consumer interest.106 The respondents humbly submit that the price rise would not be worth the services that it would generate and the increased prices would not accrue any benefits to the consumer. [23] . ‘The Resale Price Maintenance Controversy: Beyond the Conventional Wisdom’ (1994) 63(1) Antitrust Law Journal 59. Explanation for Resale Price Maintenance’ (16 December 2007) <https://papers.com/sol3/papers. and Unconvincing. In the present case. ¶ 224. ‘Free Riding: An Overstated. ‘Guidelines on Vertical Restraints’ 2010. 103 It is difficult to see what ‘enhanced value’ consumers would receive in return for increased prices. Price is the ‘central nervous system’ of the economy 101 and the consistently and substantially higher prices that result from restrictions on price competition are suggestive of anti-competitive effects. The discounts provided are a part of its business strategy and in no way suggests lack of services.

free- rideable services. Moreover. [24] . Any benefit for the new customer must be weighed against the adverse impact on the welfare of the ‘non- marginal’ consumer. Finally. to the extent that RPM prevents more efficient dealers from offering consumers desired services at lower prices.109 RPM will anyway fail to control free riding as even if the manufacturer does not permit the would-be free rider to lower its price. which again harms even those consumers who desire these services. Edward Elgar Publishing 2003) 245. he can evade price restriction by offering the price-restricted good together with a related product at a price below the combined prices of the separate items. even those desiring the services suffer. even if the free-rider effect is assumed prevalent. a familiar product like a TV does not need complex. Market Dominance and Antitrust Policy (2nd edn. Product demonstration is superfluous for customers who already know the product’s features. it can be more effectively avoided through less restrictive 107 Phillip Areeda & Herbert Hovenkamp.107 In the present case. the choice of consumers who are well aware of the specifications and technicalities are restricted when they are forced to pay for these services. Antitrust Law: An Analysis of Antitrust Principles and their Application (2nd edn. Further. the abundance of information available online should diminish the need for in-store demonstrations or knowledgeable sales assistance and. 109 Marina Lao. 108 MA Utton. Aspen Publishers 2004). thus.108 However. product at a lower price without unwanted services. ¶61. Lutyen is also preventing the efficient dealers like Sandy from offering the services at a lower price.110 Further. The ‘free-rider’ problem is one reason manufacturers might want to introduce resale price maintenance. High price worsens the welfare of these consumers by forcing them to pay for services they do not desire. ‘Resale Price Maintenance: The Internet Phenomenon and 'Free Rider' Issues’ (2010) 55 Antitrust Bulletin 473. the frequency of free riding.

112 In addition to being less restrictive. ‘Resale Price Maintenance: The Internet Phenomenon and 'Free Rider' Issues’ (2010) 55 Antitrust Bulletin 473. which would ensure specified services and eliminate the free-rider effect. Free Riders and Vertical Restraints’ (1991) 36(2) Antitrust Bulletin 383. ‘Guidelines on Vertical Restraints’ 2010. 111 European Commission. including specified service in agreements. RPM is dispensable because a more efficient and less restrictive alternative is present in the form of promotional allowances. 112 Robert Steiner. means that may include dealer reimbursements including the mandatory services. The respondents humbly submit that even if Lutyen’s objective to impose RPM is to ensure better services. ¶ 125. Promotional allowances essentially compensate retailers for specific services and do not restrain their freedom to price the manufacturer’s products as they see fit. promotional allowances are probably more efficient and effective than RPM agreements. [25] . ¶63. dealer reimbursements. III. ‘Manufacturers’ Promotional Allowances. ¶62. 113 Marina Lao.111 In the present case. there are least restrictive alternatives available to achieve it. If the application of what appears to be a commercially realistic and less restrictive alternative would lead to a significant loss of efficiencies. RPM IS DISPENSABLE TO ACHIEVE THE SAID EFFICIENCIES DUE TO THE PRESENCE OF LESS RESTRICTIVE ALTERNATIVES. Internet and brick-and-mortar retailers provide very different types of services (involving different costs) for a manufacturer. Promotional allowance programs would permit a manufacturer to distinguish between these services and tailor the payments accordingly. ‘Vertical Restraints as Contract Enforcement Mechanisms’ (1988) 31(2) The Journal of Law and Economics 265. the restriction in question is indispensable.113 110 Benjamin Klein & Kevin Murphy.

¶65. Section 26(8) is the only possible section wherein CCB can pass such orders. 115 CCI v SAIL (2010) 10 SCC 744.117 II.115 The Act vests CCB with powers of adjudication and passing orders. CCB HAS PASSED THE ORDER U/S 26(8). The respondents humbly submit that the NCLAT has no jurisdiction to hear an appeal against an order not mentioned in section 53A. Only another possible section that envisages such an order is section 27. Therefore. THE NCLAT HAS NO JURISDICTION TO HEAR THE APPEAL. 117 CCI v SAIL (2010) 10 SCC 744. In addition. CCB IS FREE TO PASS AN ORDER AGAINST THE DG’S REPORT. to achieve this objective the Act makes CCB a quasi-judicial body. The conduct does not amount to a refusal to deal when it is the outcome of non-adherence to some restrictive covenant such as resale price maintenance. The purpose of the Act is to protect the interests of the consumers and to ensure freedom of trade carried on by other participants in markets. it will be right to interpret that CCI has the power to take any decision as it may deem fit after the DG’s report. ¶66. SANDY HOME STORE HAS NOT INDULGED IN A REFUSAL TO DEAL U/S 3(4) (D). 116 CCB’s orders should not be under the compulsion of the DG’s report since DG is the mere investigative arm and the adjudicatory process entire lies in CCB’s hands.114 A. 116 Rama Varma Bharathan Thampuram v State of Kerala (1979) 4 SCC 782. [26] . Lexis Nexis 2016). I.ISSUE V. since CCB is a quasi- judicial body it should adhere to the principles of natural justice. Guide to Competition Law (6th edn. though it becomes impossible to interpret this order under that section because the language of 27 is very 114 SM Dugar. ¶64. Sandy’s refusal to deal is justified since it was in response to unfair restriction in the distribution of the appellant’s product.

strictly controlled by the provisions of the relevant Act and the procedure provided therein. [27] . Section 53A does not provide for an order passed under the section 26(8) as an appealable order. relying on the purpose of the Act and the legislative intent. ‘Analysis of the Verdict of the Apex Court in CCI v Steel Authority of India Limited’ (23 May 2011) <http://www. the appeal is not maintainable. as the NCLAT does not have the jurisdiction to hear the matter. it is clear that the said order passed by the CCB was under Section 26(8).120 Therefore. Section 53A provides the right to appeal to NCLAT. Vikram Sobti & Kanika Chaudhary. This section of the Act provides the right to appeal only against certain orders of the Commission and does not include section 26(8). 118 Guntaih v Hambamma (2005) 6 SCC 228. 120 CCI v SAIL (2010) 10 SCC 744.html>. the right to appeal is not a natural or an inherent right.indialawjournal. It is a statutory right. Therefore. ¶67. by resorting to a harmonious and purposive interpretation.org/archives/volume4/issue_2/article_by_vikram_kanika.119 The language of section 27 is very clear in the aspect that the section deals only with situations where the commission after the DG’s investigation finds that there is a contravention of section 3 and 4 of the Act. Further. clear as to what it provides for in the main text of the section. even under the Competition Act. III. The CCB cannot use the marginal note in an Indian Statute for construing the statute 118 and it cannot certainly control the meaning of the body of the section if the language employed therein is very clear. ¶68. Therefore. THE ORDER IS NOT APPEALABLE TO NCLAT. 119 Nandani Satpathy v PC Dani AIR 1978 SC 1025.

¶69. the court emphasized that formulation of the price-fixing agreement is itself an offense. 123 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985). REFUSAL TO DEAL BECAUSE OF A LEGITIMATE BUSINESS REASON IS JUSTIFIED. ¶70. [28] . Cases and Materials (4th edn.123 Labeling practices like refusal to deal with competitors as automatically abusive would encroach on important legal principles such as contractual freedom. a firm has no duty to deal with its competitors. In general. 224 (1940). non-performance might imply abandonment and would mean that no damage resulted. 122 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985).B. 126 United States v Socony Vacuum Oil Co 310 US 150. Oxford University Press 2010). If the dominant firm refuses to deal in a competitor’s products or stops providing services that it makes available to others. SANDY’S CONDUCT DOES NOT AMOUNT TO A REFUSAL TO DEAL. AN ENTERPRISE HAS THE FREEDOM TO CHOOSE TRADING PARTNERS. Competition law does not impinge on companies’ choices to deal. 125 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985). or if the dominant firm has done business with the competitor and then stops.125 In Socony126.121 One of the most unsettled areas of antitrust law has to do with the duty of a firm to deal with its competitors. with other companies.124 II. or not to deal. I. However. The appellant may not use coercion on its retail 121 Alison Jones & Brenda Sufrin. EU Competition Law: Text. 124 Case T-41/96 Bayer AG v Commission (2000) ECR II-3383. imposing obligations on a firm to do business with its rivals is at odds with other antitrust rules that discourage agreements among competitors that may unreasonably restrict competition.122 In fact. the firm needs a legitimate business reason for its policies. ¶ 180.

The application of the “no economic sense” test is conceptually straightforward. 130 Marina Lao. which would not be limited were it merely to adopt a suggested price at its pleasure and only for as long as desired. which includes a clause in the distributorship agreement. The coercive device may exist in any form128. 131 Thomas Krattenmaker & Steven Salop. ‘Anticompetitive Exclusion: Raising Rivals Costs to Achieve Power over Price’ (1986) 96 Yale Law Journal 209. It is further submitted that the present contract purporting to bind the dealer does confine its future freedom of action.131 ¶73. ‘Internet Retailing and Free Riding: A Post-Leegin Antitrust Analysis’ (2011) 14 Journal of Internet Law 1. leads to better competition and any interference would adversely affect consumer welfare. 127 Simpson v Union Oil Co 377 US 13. the respondent did stock the appellant’s product in its showrooms 129 until the discount restrictions were included in its distributorship agreement. Further. 224. 354 (MDNC 1990). ¶72. A short-run profit sacrifice is not necessary for conduct to be exclusionary by the “no economic sense” test because the anti-competitive gains from exclusionary conduct sometimes lead to immediate gains. 129 Moot Proposition. ¶71.130 III. 17 (1964). ¶ 13. 128 Simpson v Union Oil Co 377 US 13. If the firm refusing to deal earlier profitably dealt with its competitor earlier and later stopped. This was against the business model of the respondent through which it had made its reputation in the market for distribution of home electronics and any action against this model would adversely affect its reputation in the end. Unrestricted pricing offers consumers with more options and therefore. THE CONDUCT MAKES PERFECT ECONOMIC SENSE. 19. which mandated distributors not to give discounts exceeding 10%. outlets to achieve RPM127. 17 (1964). Brooke Group Inc v Brown & Williamson Tobacco Corp 748 F Supp 344. [29] .

II. 133 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985). C. the conduct makes perfect economic sense.132 In the present case. THE CONDUCT IS NOT ANTI-COMPETITIVE. It cannot exclude rivals unless the facilities provided by the defendant are essential to carry out that particular trade in the specific area. since it may 132 Aspen Skiing Co v Aspen Highlands Skiing Corp 472 US 585 (1985). continued dealing after the discount restrictions would be against its business model and harmful for its reputation in the end and therefore. A refusal to deal cannot be anti-competitive unless it has exclusionary effects leading to the elimination of competition from the market. and not merely a particularly suitable or convenient one. I. though the respondent profitably dealt in appellant’s product earlier. Compelling such firms to share the source of their advantage is in some tension with the purpose of the antitrust laws. 134 OECD. Case 7/97 Oscar Bronner v Mediaprint Zeitungs (1998) ECR I-7791.133 The refused product must constitute an objectively indispensable input for such competitors. Sandy’s distribution network is dispensable to carry out the business of sale and manufacture of UHD TVs in Bohemia. ¶74. ¶75. SANDY’S DOMINANT DISTRIBUTION NETWORK IS NO GROUND FOR PENALIZING ITS REFUSAL. ‘Policy Roundtables on Refusal to Deal’ 2007. and thereby reducing the number of alternatives and restricting consumer choice in the market. ¶ 43. 134 In the present case. Firms may acquire dominant position by establishing an infrastructure that renders them uniquely suited to serve their customers. THERE ARE ALTERNATIVES TO SANDY’S DISTRIBUTION NETWORK. the Courts should look to find out whether it deliberately sacrificed its profits to exclude its competitors. [30] . ¶ 15. there are various other distribution channels available for the effective distribution of the appellant’s products and therefore.

¶ 12. or both to invest in these economically beneficial facilities. [31] . the mere fact that by retaining a facility for its own use a dominant undertaking retains an advantage over a competitor cannot justify requiring access to it. 137 Case 7/97 Oscar Bronner v Mediaprint Zeitungs (1998) ECR I-7791. a role for which they are ill-suited.135 Enforced sharing also requires antitrust courts to act as central planners. ¶ 13. harm the consumer welfare. and other terms of dealing. lessen the incentive for the dominant firm.139 Such restraints will effectively increase the cost of UHD TVs in the market and therefore. Moreover. 138 Moot Proposition. 139 Moot Proposition. 136 Verizon Communications Inc v Law Offices of Curtis Trinko LLP 540 US 398 (2004). the rival. quantity.137 ¶76. The respondent submits that the appellant on the request of certain distributors added a discount restriction clause to the distributorship agreement and this may amount to collusion between the manufacturer and distributors. 138 Such collusion may harm the respondent because by harming its business model as per which it has the potential to provide higher discounts. 135 Verizon Communications Inc v Law Offices of Curtis Trinko LLP 540 US 398 (2004). identifying the proper price. 136 Thus. compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion.

 Lutyen’s conduct amounts to a tie-in arrangement since it would cause AAEC. In Lutyen v Sandy & RK & CCB:  Lutyen is dominant in the market for sale and manufacture of UHD TV in Bohemia. P R AY E R Wherefore.  The MCA notification is not applied retrospectively.  Lutyen’s conduct amounts to Resale Price Maintenance since it would cause AAEC.  Affirm the CCB’s order.  Item 1 Schedule 1 of the Combination Regulations did not exempt the market purchases from notification.  The MCA notification did not exempt the APA from notification. issues raised. in light of the facts of the case.  Lutyen has abused its dominance in the UHD TV market to increase its sale in the casting devices market. this Hon’ble Court may be pleased to adjudge and declare that: In Lutyen v CCB:  The market purchases and the APA were inter-connected transactions. [xxii] . arguments advanced and authorities cited.

AND CCB.  Sandy’s conduct does not amount to a refusal to deal.  Lutyen has indulged in an exclusive arrangement and therefore. ALL OF WHICH IS RESPECTFULLY SUBMITTED COUNSELS FOR SANDY.  Affirm the CCB’s order. In Lutyen v Sandy & CCB:  The CCB’s order is not appealable. [xxiii] . RK. violated the conditions for the approval of the acquisition.  Affirm the CCB’s order.