CODE: 161A

10th NLUO INTRA UNIVERSITY MOOT COURT COMPETITION(PHASE II), 2019

BEFORE THE HON’BLE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Under Section 53B of the

Competition Act, 2002.

IN THE MATTER OF
Perumi.................................................................................................................Appellant
V.
CCI.................................................................................................................Respondent I
Libra ……………………………………………………………………………Respondent II

Written Submission On Behalf Of the Appellant

1
Memorial on behalf of the Petitioner
10th IUMCC Phase II, 2019 TABLE OF CONTENTS

TABLE OF CONTENTS

Index of Authorities ............................................................................................................ 3

List of Abbreveations .......................................................................................................... 8

Statement of Jurisdiction .................................................................................................... 9

Statement of Facts ............................................................................................................. 10

Issues Raised...................................................................................................................... 12

Summary Of Arguments ................................................................................................... 13

Arguments Advanced ........................................................................................................ 14

ISSUE A Libra has violated section 3 of the act with respect to the incentive scheme for
the drivers. ...................................................................................................................... 14

(I) The agreement is a vertical restraint under section 3(4) of the act ...................... 14

(II) The exclusive distribution agreement causes AAEC in the market ..................... 15

ISSUE B Libra has violated section 4 of the act with respect to abusing its dominant
position in the market. ..................................................................................................... 16

Libra is an enterprise under section 2(h) of the act ....................................................... 17

(I) ‘Mobile APP based intra city Car Taxi Services in the territory of Zubri’ is the
relavant market ............................................................................................................ 17

(II) Libra is a dominant player in the identified market ............................................ 18

(III) Libra Has Abused its Dominant Position Under Section 4 of the Act.............. 20

Prayer ................................................................................................................................ 25

Memorial on behalf of the Appellant Page 2

10th IUMCC Phase II, 2019 INDEX OF AUTHORITIES

INDEX OF AUTHORITIES

CASES

Bharti Airtel Ltd. v. Reliance Industries Ltd., Case no. 03/2017, para 6.4(CCI) __________ 22

Fast Track Call Cab Pvt. Ltd. v. M/s ANI Technologies Pvt. Ltd., Case no. 7/2015, para
10(CCI) ________________________________________________________________ 18

Fast Way Transmission Pvt. Ltd. v. Kansan News Pvt. Ltd., Appeal no. 16/2012, para
23(COMPAT) ___________________________________________________________ 23

GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Case no. 01/2010, para
84(CCI) ________________________________________________________________ 23

HT Media Ltd. v. Super Cassettes Industries Ltd., Case no. 40/2011, para 23(CCI) _______ 23

Kapoor Glass Pvt. Ltd. v. Schott Glass Pvt. Ltd., Case no. 22/2010, para 35(COMPAT) ___ 16

M/s Peeveear Medical Agencies,Kerala v. All India Oranisation of Chemists and Druggists
and Ors., Case no. 30/2011, (CCI) ___________________________________________ 16

M/s Peeveear Medical Agencies,Kerala v. All India Oranisation of Chemists and Druggists
and Ors., Case no. 30/2011, para 13.12(CCI) ___________________________________ 23

Meru Travel Solutions Pvt. Ltd. v. M/s ANI Technologies Pvt. Ltd. And Ors., Case no. 25-
28/2017, para 38(CCI) ____________________________________________________ 18

Mr. Ashok Ahuja v. SanDisk Corporation and Ors. ,Case no. 17/2014, para 11(CCI) _____ 15

Mr. Mohit Mangalani v. Flipkart India Pvt. Ltd., Case no. 80/2014, para 15(CCI) ________ 16

Prints India v. Springer India Pvt. Ltd., Case no. 16/2011, para 9(CCI) ________________ 17

Shamsher Kataria v. Honda Seil Cars India Ltd. And Ors. , Case no.3/2011, para 19.4(CCI)14

Sonam Sharma v. Apple Inc., Case no. 24/2011, para 20(CCI) _______________________ 15

Sunshine Pictures v. Eros International Media, Case no.52/2010, para 5(CCI) ___________ 15

Memorial on behalf of the Appellant Page 2

10th IUMCC Phase II, 2019 INDEX OF AUTHORITIES

TELCO v. Registrar of Restrictive Trade Agreement, 1977 AIR 973, para 693(SC) ______ 15

STATUTES

Competition Act 2002, s 19(4)(a) ______________________________________________ 19

Competition Act 2002, s 19(4)(h) ______________________________________________ 20

Competition Act 2002, s 19(5) ________________________________________________ 17

Competition Act 2002, s 19(7)(c) ______________________________________________ 18

Competition Act 2002, s 2(h) ______________________________________________ 14, 17

Competition Act 2002, s 2(s) _________________________________________________ 18

Competition Act 2002, s 2(t) _________________________________________________ 17

Competition Act 2002, s 3(1) _________________________________________________ 14

Competition Act 2002, s 3(4) _________________________________________________ 14

Competition Act 2002, s 3(4) r/w s 19(3) ________________________________________ 15

Competition Act 2002, s 3(4), Explanation (b)____________________________________ 14

Competition Act 2002, s 4(1) ______________________________________________ 17, 24

Competition Act 2002, s 4(2) r/w s19(4), Explanation 2 ____________________________ 19

Competition Act 2002, s 4(2)(a)(ii) ____________________________________________ 22

Competition Act 2002, s 4(2)(c) _______________________________________________ 23

Competition Act 2002, s 4(2), Explanation 2 __________________________________ 17, 19

Competition Act 2002, s19(5)_________________________________________________ 18

Competition Act 2002, s19(6)_________________________________________________ 18

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10th IUMCC Phase II, 2019 INDEX OF AUTHORITIES

TREATISES

EEC Treaty, Art. 82 ________________________________________________________ 21

Treaty on the Functioning of EU (TFEU), Art. 102(c) ______________________________ 21

REGULATIONS

Commission Notice on Agreements of Minor Importance (De Minimis), OCJ 368/07, para 9
_______________________________________________________________________ 15

EU Exemption Regulation 330/2010, para 9 _____________________________________ 15

European Commission Guidelines on Vertical Restraints, O.J. 2010 (C 130) 1, para 101 __ 15

Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to Abusive

Exclusionary Conduct by Dominant Undertakings, OJ 2009( C 45)7, para 10 _________ 16

Report by EC Commission in OECD, The Essential Facility Concept, 97(1996) _________ 23

OTHERS

Memorial, para 5 ___________________________________________________________ 23

Memorial, para 7 ___________________________________________________________ 21

Moot Proposition, para 10_________________________________________________ 15, 21

Moot Proposition, para 11____________________________________________________ 21

Moot Proposition, para 5__________________________________________________ 14, 17

Moot Proposition, para 7__________________________________________________ 19, 22

Moot Proposition, para 8__________________________________________________ 19, 22

FOREIGN CASES

AKZO Chemie BV v. Commission, 1991 ECR I-3359, para 60(ECJ)__________________ 18

Bell Atlantic Corp. v. Twombly, 550 US 554 (USSC) ______________________________ 21

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10th IUMCC Phase II, 2019 INDEX OF AUTHORITIES

Board of Trade of City of Chicago v. U.S., 246 US 231, para 241(USSC) ______________ 15

Boosey and Hawkes: Interim Measures, 1987 OJ (L 286)36, para 18(EC) ______________ 19

British Airways v. Commission, 1999 ECR II-5917, para 270-273(ECJ) _______________ 20

Brooke Group Ltd. v. Brown and Williamson Tobacco Corporation, 509 US

209,1986(USSC) _________________________________________________________ 21

Delimitis v. Henninger Brau AG, 1991 ECR I-935, para 13(ECJ)_____________________ 14

France Telecom SA v. Commission, Case C-202/07 P, para 99-101(Court of First Instance)21

Hoffman La-Roche and Co. AG v. Commission, 1979 ECR 461, para 4(ECJ) ___________ 18

Michelin v. Commission, 1983 ECR 3461, para 71(ECJ) ___________________________ 20

Microsoft corporation v. Commission, Case T-201/04, para 779-784(Court of First Instance)

_______________________________________________________________________ 23

Nungesser v. Commission, 1982 ECR 2015, para 87(ECJ) __________________________ 15

Oscar Bronner GmbH and Co. v. Mediaprint Zeitungs GmbH and Co., 1998 ECR I-7791,
para 25(ECJ) ____________________________________________________________ 22

Sea Containers v. Stena Sealink- Interim Measures, 1994 OJ (L 15)8, para 9(EC) ________ 22

U.S. v. Microsoft, 253 F.3d 34, para 202(Court of Appeals) _________________________ 14

United Brands Co. v. Commission, 1978 ECR 207, para 65(ECJ) ____________________ 18

BOOKS

F. Wijckmans and F. Tuytschaever, Vertical Agreements in EU Competition Law, Pg. 106

(2nd edn., 2011) __________________________________________________________ 16

Faul and Nickpay, The EU Law of Competition Law, Pg. 543(2nd edn., 2007) __________ 21

Jan Werner and Stephen LeRoy, Principles of Financial Economics, Pg. 329(2000) ______ 21

R. Whish and D. Bailey, EU Competition Law, Pg. 528(8 th edn., 2015) ________________ 20
Memorial on behalf of the Appellant Page 6
10th IUMCC Phase II, 2019 INDEX OF AUTHORITIES

S. Dugar, Guide to Competition Law, Vol.1, Pg. 227 (5th edn., 2010)__________________ 17

Memorial on behalf of the Appellant Page 7

10th IUMCC Phase II , 2019 LIST OF ABBREVIATIONS

LIST OF ABBREVIATIONS

S. No ABBREVIATIONS EXPANSION
1. AAEC Appreciable Adverse Effect on Competition
2. Art. Article
3. CCI Competition Commission of India
4. Co. Company
5. COMPAT Competition Appellate Tribunal
6. DG Director General
7. EC European Commission
8. ECJ European Court of Justice
9. EU European Union
10. Ltd. Limited
11. OECD Organisation of Economic Co-operation and
Development
12. Pvt. Private
13. r/w Read with
14. SC Supreme Court of India
15. TFEU Treaty on the Functioning of European Union
16. The Act Competition Act 2002
17. US United States of America
18. USSC Supreme Court of United States

Memorial on behalf of the Appellant Page 8

10th IUMCC Phase II, 2019 STATEMENT OF JURISDICTION
STATEMENT OF JURISDICTION

CIVIL APPEAL NO. ___ of 2018

The Appellant, Perumi Pvt. Ltd. has approached NCLAT under Section 53B of the
Competition Act 2002. The Respondent, Libra Pvt. Ltd. humbly submits to the jurisdiction
of this Hon’ble Court.

Memorial on behalf of the Appellant Page 9

10th IUMCC Phase II, 2019 STATEMENT OF FACTS

STATEMENT OF FACTS

BACKGROUND

The government of Union of Industan (hereinafter ‘Industan’), a Republic in South Asia has
initiated the process of economic liberalization in 1991, thus opening up markets since then.
In order to ensure healthy and fair competition, it has enacted the Competition Act, 2002. It is
to be noted that there are two intra city car taxi services operating in the metropolitan cities of
Industan, Perumi (the petitioner) and Libra (the respondent) respectively.
Perumi was established in the year 2014 and it has modified its mode of booking cabs by
introducing the feature of mobile application booking services in 2018. On the other hand,
Libra has entered the market in the year 2018 with huge financial backing and adequate
resources at its disposal. Both have a similar business model as far as mode of operation is
concerned.

CONTRACT

There is an existing contract between Perumi and its fleet operators or taxi drivers, whereby
the fleet operators are ably supported by the petitioner’s network which drafts in customers
through a mobile app. The drivers are required to share 1/5th of the revenue thus generated
with Perumi. The fares are decided keeping in mind the costs incurred by the cab drivers and
also adhering to the guidelines of the State of Industan. Similarly, there is also a contract
between the drivers of the new entrant in the market, Libra Private Limited and the company
but in this contract, the cab drivers are provided with lucrative incentive schemes and the
customers are provided with heavy discounts. Libra occupying more than a majority of the
market share within a period of 6 months creates a dispute between the two companies, where
the respondent is alleged of contravening Sections 3 and Section 4 of the Competition Act,
2002.

DISPUTE

The petitioner was concerned by the sudden dip in its market share. Hence, it filed an
information to Competition Commission of India (hereinafter the ‘CCI’) under Section 19 of
the Competition Act alleging violation of Section 3 and Section 4 of the Act on the part of the
respondent, i.e, anti competitive agreements and abuse of dominant position respectively. It
was alleged that the incentive scheme of Libra to its drivers lead to the creation of an
appreciable adverse effect on competition in the market. The Commission opined that the
incentive scheme fails to fulfil the requirements of an agreement under section 3 of the act

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10th IUMCC Phase II, 2019 STATEMENT OF FACTS

and even if it does, there is no scope for appreciable adverse effect on competition caused by
the same.
There was another point of contention between the two parties. Even though both parties
agreed on the relevant geographic market being the ‘territory of Zubri’, they disagreed on the
delineation of the relevant product market in this context.

APPEAL

Aggrieved by the order passed by the CCI, the petitioner filed an appeal under Section 53B of
the Act before the Honorable National Company Law Appelate Tribunal (hereinafter
‘NCLAT’). After the initial hearing, NCLAT issued notice to the CCI as respondent number
1(R-1) and Libra as respondent number 2(R-2). The NCLAT allowed the requests of R-1 and
R-2 and recorded that it would hear the counsel for Petitioner and R-2, who has filed its
reply. The matter is presently listed for final hearing.

Memorial on behalf of the Appellant Page 11

10th IUMCC Phase II, 2019 ISSUES RAISED

ISSUES RAISED

ISSUE A

WHETHER THE COMPETITION COMMISSION OF INDIA IS CORRECT IN HOLDING THAT LIBRA HAS
NOT VIOLATED SECTION 3 OF THE COMPETITION ACT, 2002?

ISSUE B

WHETHER THE COMPETITION COMMISSION OF INDIA IS CORRECT IN HOLDING THAT LIBRA HAS

NOT VIOLATED SECTION 4 OF THE COMPETITION ACT, 2002?

Memorial on behalf of the Appellant Page 12

10th IUMCC Phase II , 2019 SUMMARY OF ARGUMENTS

SUMMARY OF ARGUMENTS

A. Libra Has Violated Section 3 Of The Competition Act 2002 With Respect To
Incentive Scheme For The Drivers.
Agreements within the purview of Section 3(4) of the Act would be in contravention with
Section 3(1) only if they cause AAEC. The agreement between Libra and the drivers falls
within the ambit of the Section 3(4)(c) because they are both enterprises operating in different
markets and the agreement is a vertical restraint. The agreement causes AAEC because Libra
has majority shares in the relevant market. Additionally, the incentive scheme of Minimum
Business Guarantee (MBG), flouted by Libra, locks in the drivers on the network and they
are not free to move to other car taxi service providers, thereby foreclosing competition in the
market and creating entry barriers. The agreement doesn’t have any positive impact on the
market, because it countervails the buying power of consumers in the downstream market,
causing loss in consumer welfare. Overall, the agreement causes AAEC in the market.
Therefore it is submitted that Libra has violated Section 3(4) read with Section 3(1) of the
Act.

B. Libra Has Violated Section 4 Of The Competition Act 2002 With Respect To
Abusing It’s Dominant Position
Section 4 of the Act prohibits an enterprise from abusing its dominance in the relevant
market. Libra is a company engaged in economic activity, thus, it is an enterprise. The rele
vant market in the present case is the market for ‘Mobile App based intra-city Car Taxi
Services in the territory of Zubri’. Libra is dominant in the relevant market because it can
operate independently of the competitive market forces and can affect the market,
competitors in its favour. It has abused its dominant position by providing heavy discounts to
consumers and unrealistic incentives to drivers, on account of the extensive foreign funding;
which amounts to ‘predatory pricing’ under Section 4(2)(ii) of the Act. Additionally, Libra
has been indulging in below average variable cost pricing for a reasonable period of time
which has led to significant losses and increased bookings. The actions of Libra are not a part
of promotional practices but for the specific purpose of reducing competition and ousting
competitors from the market. Libra has abused its position by imposing unfair conditions on
Perumi and other competitors and therefore, it’s conduct is in violation of Sect. 4 of the Act..

Memorial on behalf of the Appellant Page 13

10th IUMCC Phase II,2019 ARGUMENTS ADVANCED
ARGUMENTS ADVANCED

ISSUE A LIBRA HAS VIOLATED SECTION 3 OF THE ACT WITH RESPECT TO

THE INCENTIVE SCHEME FOR THE DRIVERS.

1. Section 3 of the Act prohibits any two enterprises from entering into an agreement
which causes appreciable adverse effect on competition. 1 It is submitted that the tacit
exclusive distribution agreement between Libra and taxi drivers should be declared
void because
(i) The agreement is a vertical restraint
(ii) It causes AAEC in the market

(I) THE AGREEMENT IS A VERTICAL RESTRAINT UNDER SECTION 3(4) OF THE

ACT

2. For an agreement to be anti-competitive in nature, it needs to be between enterprises

or persons.2 Libra is a company engaged in the activity of providing intra-city car taxi
services in the metropolitan cities of Industan. 3 Thus, Libra is an enterprise. Drivers
are individuals engaged in providing taxi services in exchange of remuneration. 4
Therefore, they are persons. Thus, both of them qualify to enter into an agreement
under the Act.
3. Two products become a part of two different markets if they are not
substitutable/functionally interchangeable. 5 In the present case, Libra engages in
providing intra-city taxi services through an online mobile application and the drivers
operate in the market of providing their professional services. These, services are not
interchangeable and therefore, forms part of two different markets.
4. The Act provides that “exclusive distribution agreements”6 are vertical restraints. In
this case, the incentive scheme indirectly locks in the drivers on Libra’s network,
thereby, restricting or withholding the supply of drivers in the market.7

1
Competition Act 2002, s 3(1)
2
Competition Act 2002, s 3(4)
3
Moot Proposition, para 5
4
Competition Act 2002, s 2(h)
5
Shamsher Kataria v. Honda Seil Cars India Ltd. And Ors. , Case no.3/2011, para 19.4(CCI)
6
Competition Act 2002, s 3(4), Explanation (b)
7
Moot Proposition, para 10

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
5. Therefore, it is submitted that the implicit agreement between Libra and drivers is an
exclusive distribution agreement under Section 3(4) of the Act and is a vertical
restraint.

(II) THE EXCLUSIVE DISTRIBUTION AGREEMENT CAUSES AAEC IN THE MARKET

6. Agreements within the purview of Section 3(4) of the Act would be in contravention
of Section 3(1) only if they are likely to cause AAEC. 8 Such agreements are not
illegal per se and there is no presumption that they cause AAEC. 9 Rule of reason is
applied to assess such agreements.10 The likely pro-competitive and anti-competitive
effects are to be evaluated on a case to case basis, and only the net negative impact on
the competition renders it void.11
7. The market share of a competitor in the relevant market is crucial in deciding whether
there is AAEC in the market due to exclusive distribution agreement.12 The act of
entering into exclusive distribution agreement by dominant players causes market
foreclosure.13 The De Minis Doctrine states that where the market share held by each
of the parties to the agreement exceeds 15% of any of the relevant markets affected by
the agreement, it may cause AAEC. 14
8. Libra is a dominant player in the market owing to its large market share. Such an
enterprise when enters into an agreement which falls under the vertical restraint under
Section 3(4), causes foreclosure of competition by hindering entry into the market.15
9. Such foreclosure is considered substantial because the degree of market foreclosed
deprives new or existing players of the ability to obtain economies of scale and
thereby improve effective inter-brand as well as non-price competition.16 It also
deprives them of the essential facility necessary to prosper in the market. Therefore,
degree of foreclosure is magnified in the market.17
10. Libra, due to its dominant position in the relevant market, is able to impose undue
influence on the competition. Its tacit exclusive agreement with the drivers restricts
supply of drivers in the market; thereby, drives existing competition out of the market

8
Competition Act 2002, s 3(4) r/w s 19(3)
9
Sunshine Pictures v. Eros International Media, Case no.52/2010, para 5(CCI)
10
TELCO v. Registrar of Restrictive Trade Agreement, 1977 AIR 973, para 693(SC)
11
Delimitis v. Henninger Brau AG, 1991 ECR I-935, para 13(ECJ)
12
Sonam Sharma v. Apple Inc., Case no. 24/2011, para 20(CCI)
13
EU Exemption Regulation 330/2010, para 9
14
Commission Notice on Agreements of Minor Importance (De Minimis), OCJ 368/07, para 9
15
U.S. v. Microsoft, 253 F.3d 34, para 202(Court of Appeals)
16
European Commission Guidelines on Vertical Restraints, O.J. 2010 (C 130) 1, para 101
17
Mr. Ashok Ahuja v. SanDisk Corporation and Ors. ,Case no. 17/2014, para 11(CCI)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
by denying them essential necessities to survive in the competition and thus, denying
them market access.18
11. The restrictions in the agreement need to be assessed in the context of the market to
determine their net effect on the competition.19 The vertical restraints in the
agreement need to be reasonable for it to have a positive effect on the competition.20
The Act enumerates numerous factors like- benefits to consumers, improvement in
production and distribution, scientific, technical and economic development, etc. to be
taken into account to analyze the net ameliorating effect of the agreement on the
competition.21
12. As argued above, foreclosure in market results in restrictions on customers and leads
to a loss in consumer welfare.22 In this case, Libra indirectly restricts the drivers to
attach their fleet to other similar platforms, on account of the incentive scheme. The
final consumers have to now avail the services of Libra only, due to exclusive
distribution, instead of having multiple options; which would be the case if there
existed free and fair competition in the market.23 This causes loss in consumer welfare
instead of benefitting the consumers, increasing the AAEC in the market.
13. Therefore, even if exclusive contracts provide the consumers with professional
services at affordable rates, but in the long run it have a negative impact on the entire
competition24. The ameliorating effects are not enough to counter the aggravating
effects of exclusive distribution agreement, and hence, it has net negative impact on
the competition.
14. In conclusion, it is submitted that the agreement between Libra and the cab drivers is
a vertical restraint under section 3(4) of the Act, and it causes considerable AAEC on
the market. Therefore, it is in contravention of Section 3(1) of the Act, and under
Section 3(2) such an agreement should be void.

ISSUE B LIBRA HAS VIOLATED SECTION 4 OF THE ACT WITH RESPECT

TO ABUSING ITS DOMINANT POSITION IN THE MARKET.

18
Kapoor Glass Pvt. Ltd. v. Schott Glass Pvt. Ltd., Case no. 22/2010, para 35(COMPAT)
19
Nungesser v. Commission, 1982 ECR 2015, para 87(ECJ)
20
Board of Trade of City of Chicago v. U.S., 246 US 231, para 241(USSC)
21
Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary
Conduct by Dominant Undertakings, OJ 2009( C 45)7, para 10
22
M/s Peeveear Medical Agencies,Kerala v. All India Oranisation of Chemists and Druggists and Ors., Case no.
30/2011, (CCI)
23
Supra note 16, para 103
24
Mr. Mohit Mangalani v. Flipkart India Pvt. Ltd., Case no. 80/2014, para 15(CCI)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
15. Section 4 of the Act states that no enterprise or group shall abuse its dominant
position. 25 CCI is wrong in holding that Libra has not violated Section 4 of the Act
because- firstly, Libra is an enterprise under Section 2(h) of the Act; secondly, Libra is
in a position of dominance in the relevant market; lastly, the actions of Libra amounts
to abuse of dominance under Section 4(2)(a) of the Act.

LIBRA IS AN ENTERPRISE UNDER SECTION 2(H) OF THE ACT

16. Provisions of Section 4 of the Act are only applicable to an enterprise or a group. 26 An
enterprise means a person who engages in an economic activity or a profession.27
Libra Pvt. Ltd., is a company incorporated under the Companies Act,2013, engaged in
the business of intra-city car taxi services in the metropolitan cities of Industan.28
Therefore, it is submitted that Libra qualifies as an enterprise under the Act.

(I) ‘MOBILE APP BASED INTRA CITY CAR TAXI SERVICES IN THE TERRITORY OF
ZUBRI’ IS THE RELAVANT MARKET

17. Ascertainment of the relevant market is essential for analysing a case of abuse of
dominance. 29 The dominant position of an enterprise or a group has to be established
within the identified relevant market.30 When determining what constitutes the
relevant market, due regard must be given to both the relevant product as well as
geographic market.31
18. All those products or services which are regarded as interchangeable or substitutable
by the consumer form part of the same relevant product market. 32 Relevant product
market is primarily determined by gauging product substitutability from a consumer’s
perspective.33 The Commission has to take consumer preferences into consideration
for the determination of the relevant product market.34 It is submitted that, the
consumers availing the taxi services are the ultimate consumers of the services
provided by Libra. Thus, in the instant case, customers of cab- aggregators should be
considered as consumers.

25
Competition Act 2002, s 4(1)
26
ibid
27
Competition Act 2002, s 2(h)
28
Moot Proposition, para 5
29
Prints India v. Springer India Pvt. Ltd., Case no. 16/2011, para 9(CCI)
30
Competition Act 2002, s 4(2), Explanation 2
31
Competition Act 2002, s 19(5)
32
Competition Act 2002, s 2(t)
33
F. Wijckmans and F. Tuytschaever, Vertical Agreements in EU Competition Law, Pg. 106 (2nd edn., 2011)
34
Competition Act 2002, s 19(7)(c)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
19. Intra-city car taxi services is a distinct market from the market of local
transportation.35 It is also established that the market for intra-city car taxi services is
further sub-divided into separate product markets.36 It was opined in Fast Track Call
Cab Services v. ANI Technologies that, the key features of radio taxi, viz, point-to-
point pick up and drop facility, pre-booking, round the clock availability, ease of
payment, etc., makes them different from other transports.37 Hence, it is submitted
that ‘mobile app based intra-city car taxi services’ should be identified as the relevant
product market.
20. The relevant geographic market38 should also be taken into consideration to identify
the relevant market.39 The CCI should pay due regard to the factors such as language,
consumer preferences, etc., while identifying the relevant geographic market.40 The
geographic market of taxi services is usually defined by the State
Government/Regional Transport Authorities. 41 Thus, the regulatory conditions of
competition are homogenous only in a particular city and distinct in neighbouring
states/cities. Further, radio taxi services is a highly localized service from demand and
supply side perspective.42 Therefore, it is submitted that Zubri should be delineated
as relevant geographic market.
21. In conclusion, it is submitted that the market of ‘mobile app based intra-city car taxi
services in the territory of Zubri’ is the relevant market.

(II) LIBRA IS A DOMINANT PLAYER IN THE IDENTIFIED MARKET

22. As argued above, the relevant market in the instant case is ‘mobile app based intra
city car taxi services in the territory of Zubri’. It is submitted that Libra has acquired a
dominant position in the relevant market, as per the second explanation to Section 4
of the Act, read with Section 19(4).43
23. Dominant position is defined as a position of strength enjoyed by an enterprise that
enables it to operate independently of competitive forces in the relevant market. 44

35
Meru Travel Solutions Pvt. Ltd. v. M/s ANI Technologies Pvt. Ltd. And Ors., Case no. 25-28/2017, para
38(CCI)
36
ibid
37
Fast Track Call Cab Pvt. Ltd. v. M/s ANI Technologies Pvt. Ltd., Case no. 7/2015, para 10(CCI)
38
Competition Act 2002, s 2(s)
39
Competition Act 2002, s19(5)
40
Competition Act 2002, s19(6)
41
S. Dugar, Guide to Competition Law, Vol.1, Pg. 227 (5th edn., 2010)
42
Supra note 35, para 7
43
Competition Act 2002, s 4(2) r/w s19(4), Explanation 2
44
Competition Act 2002, s 4(2), Explanation 2

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
According to the tests laid down in United Brands45 and Hoffman46, a firm would be
able to behave independently of competitive forces, if it has acquired a position of
economic strength.47 This position of economic strength can be understood to be one
of substantial market power.48 However, CCI stated that independence in the context
of dominance does not mean absence of any other player in the relevant market. 49

i. LIBRA HOLDS MAJORITY SHARES IN THE RELEVANT MARKET

24. Market share is one of the relevant factors to be taken into consideration, while
inquiring into whether a firm enjoys dominant position or not.50 The ECJ has stated
that very large shares are in themselves evidence enough to show dominance. 51
25. In the instant case, Libra is a monopolist in the relevant market, because it is one of
the two companies holding the maximum shares of the market (45%), and due to the
enticing discounts rendered by Libra , the popularity of Perumi is reducing and hence,
it is losing out on the market shares. 52 Therefore, there is an assumption of
dominance. 53

ii. LIBRA HOLDS A POSITION OF ECONOMIC STRENGTH IN THE MARKET

26. It is submitted that Libra holds substantial market power in the relevant market. This
is because there are only two major private cab aggregators in Zubri, namely- Libra
and Perumi54. Perumi is losing its popularity because of the introduction of Libra in
the market. With the aid of foreign funding, Libra is able to provide huge discounts to
the customers and incentives to drivers.55 Due to these discounts and incentives Libra
became very popular among customers within a short period of time.

iii. LIBRA HAS THE ABILITY TO RESTRICT ENTRY INTO THE MARKET

27. An enterprise is dominant if it is able to control prices or restrict entry of new

competitors into the relevant market.56 While determining whether an enterprise has a

45
United Brands Co. v. Commission, 1978 ECR 207, para 65(ECJ)
46
Hoffman La-Roche and Co. AG v. Commission, 1979 ECR 461, para 4(ECJ)
47
Supra note 43, para 65
48
Supra note 20, para 10
49
Supra note 17, para 20
50
Competition Act 2002, s 19(4)(a)
51
Supra note 44, para 4
52
Moot Proposition, para 8
53
AKZO Chemie BV v. Commission, 1991 ECR I-3359, para 60(ECJ)
54
ibid
55
Moot Proposition, para 7
56
Boosey and Hawkes: Interim Measures, 1987 OJ (L 286)36, para 18(EC)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
dominant position, creation of entry barriers has to be taken into considerations. 57
Advantages peculiar to dominant company constitute barriers to entry. 58
28. In the instant case, Libra has allegedly restricted entry of new competitors in the
competition. Due to the financial backing and incentive schemes provided by Libra,
existing competition as well as new competitors find it extremely difficult to be at par
with Libra, or sustain the competition efficiently. 59 Thus is the reason, there has been
no significant entry of a new intra-city car taxi provider in the relevant market, since
Libra started in the business.60
29. Thus, it is submitted, that owing to its share in the market, market power, control over
infrastructure, regulatory role, control over players and ability to restrict entry of other
competitors, Libra is in a dominant position in the identified relevant market.

(III) LIBRA HAS ABUSED ITS DOMINANT POSITION UNDER SECTION 4 OF THE ACT

30. It is submitted that Libra has abused its dominant position according to Section 4(2)
of the Act because (a) it has imposed unfair conditions in the purchase of services of
the drivers61 as well as sale of their services (b) it indulges in the practices resulting in
denial of market access to its fellow competitors.62

A. LIBRA HAS IMPOSED UNFAIR CONDITIONS IN THE PURCHASE OF SERVICES OF THE

DRIVERS AS WELL AS SALE OF THEIR SERVICES IN THE RELEVANT MARKET

31. Section 4(2)(a) of the Act states that the indirect or direct imposition of unfair or
discriminatory conditions in the purchase or sale of goods or services constitutes
abuse of dominant position. 63 The term ‘unfair’ is nowhere defined in the Act.64 It has
to examined either in the context of unfairness to competitors or to the customers. 65
32. In the instant case, Libra is imposing unfair conditions on the purchase of services of
the drivers and also on the sale of their services to the ultimate customers through
predatory pricing.66

57
Competition Act 2002, s 19(4)(h)
58
Supra note 5, para 20
59
Sainsbury’s Superarkets Ltd. v. Mastercard Incorporated And Ors., 2018 ECWA 1536, para 76(Court of
Appeal)
60
Moot Proposition, para 12
61
Competition Act 2002, s 4(2)(a)
62
Competition Act 2002, s 4(2)(c)
63
Competition Act 2002, s 4(2)(a)(i)
64
MCX Stock Exchange Ltd. v. NSE India Ltd., Case no. 13/2009, para 10.71(CCI)
65
ibid
66
Competition Act 2002, s 4(2)(a)(ii)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
(I) LIBRA HAS INDIRECTLY IMPOSED UNFAIR CONDITIONS IN THE PURCHASE OF
SERVICES OF THE DRIVERS

33. As argued above, the tacit agreement between Libra and the drivers causes market
foreclosure.67 The reason being, the drivers are indirectly locked in on the network as
they don’t get such high shares of revenue as well as incentives on any other platform.
34. Further, the minimum business guarantee incentive scheme flouted by Libra in the
market, imposes a condition on the drivers that in order to be eligible for the extra
incentives they have to complete trips for at least Rs.300 in fares between 6 pm to 11
pm; which is the ‘evening peak hour’.68 This contingency on the drivers qualifies as
Loyalty Rebate69.
35. It is established position of law that rebate schemes included in supply agreements
may infringe competition law. 70 As due to these conditional rebates, dominant firms
tend to make customers purchase all their requirements from one supplier only and
eventually cause foreclosure of market for other players in the market. 71
36. Libra is indirectly forcing the drivers to attach their fleet/cars on its network, from the
period of 6pm to 11pm72, which is the period of maximum sale in the market; and
thus withholding the supply of drivers in the market; thus imposing unfair conditions
on other competitors.
37. Further, Libra is also discriminating between the drivers by providing the additional
incentives only to those drivers who fulfil the prescribed amount of rides 73. Hence,
there is differential treatment meted out to other drivers, depriving them of the
additional benefits provided to other drivers, and thus promoting unfair competition in
the trade.74
38. Therefore, it is submitted that Libra has abused its dominant position by imposing
unfair conditions on its competitors, the customers and even on the drivers; based on
the above mentioned contentions and arguments.

67
Memorial, para 7
68
Moot Proposition, para 10
69
R. Whish and D. Bailey, EU Competition Law, Pg. 528(8th edn., 2015)
70
Treaty on the Functioning of EU (TFEU), Art. 102(c)
71
EEC Treaty, Art. 82
72
Moot Proposition, para 11
73
Michelin v. Commission, 1983 ECR 3461, para 71(ECJ)
74
British Airways v. Commission, 1999 ECR II-5917, para 270-273(ECJ)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
(II) LIBRA HAS IMPOSED DISCRIMINATORY PRICES IN THE SALE OF INTRA-CITY TAXI
SERVICES

39. Libra has been spending Rs.2 for each kilometre of every ride booked on its
platform. 75 This clearly demonstrates, that Libra has been operating below its average
variable cost, with the sole intention of eliminating competition. 76
40. Libra has constantly been indulging in the practice of providing huge discounts and
unrealistic incentives to the drivers, with the aid of foreign funding. Due to these
practices, Libra has gained immense popularity in the market, thereby reducing the
market shares of Perumi drastically, refer to the table below 77:

JULY DECEMBER
Libra 0% 45%
Perumi 70% 35%

41. The incentives and discounts offered by Libra can’t be regarded as measures to meet
competition as no other company in the relevant market is offering services below the
variable cost78. Such conduct of Libra, amounts to predatory pricing in contravention
of Section 4(2)(a)(ii) of the Act.79 Libra has been able to indulge in predatory pricing
because of the funds provided by its foreign investors.80
42. Libra holds majority shares in the market, thus has the economic strength to fix price
in the market.81 By indulging in the practice of setting the prices below the variable
cost, Libra is denying the other players in the competition to a level playing field, as
they don’t have access to foreign funds, unlike Libra.82
43. Libra is indulging in predatory pricing, just to drive out all the competition out of the
market, and eventually monopolize the entire market.83 Which eventually impose the
ultimate consumers with unfair conditions; as they would be denied the freedom of
choice and will be forced to pay the price, fixed by Libra in the identified market. 84

75
Moot Proposition, para 7
76
Bharti Airtel Ltd. v. Reliance Industries Ltd., Case no. 03/2017, para 6.4(CCI)
77
Moot Proposition, para 8
78
Supra note 76, para 6.6
79
Competition Act 2002, s 4(2)(a)(ii)
80
France Telecom SA v. Commission, Case C-202/07 P, para 99-101(Court of First Instance)
81
Jan Werner and Stephen LeRoy, Principles of Financial Economics, Pg. 329(2000)
82
Bell Atlantic Corp. v. Twombly, 550 US 554 (USSC)
83
Brooke Group Ltd. v. Brown and Williamson Tobacco Corporation, 509 US 209,1986(USSC)
84
Faul and Nickpay, The EU Law of Competition Law, Pg. 543(2nd edn., 2007)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
44. Therefore, it is submitted that Libra that Libra has abused its dominant position by
indulging in the practice of predatory pricing.

A. LIBRA HAS INDULGED IN PRACTICES RESULTING IN DENIAL OF MARKET ACCESS TO ITS

FELLOW COMPETITORS

45. Section 4(2)(c) states that there shall be an abuse dominant position if an enterprise
indulges in any practice or practices that results in denial of access of market. 85
46. It is submitted that, Libra has abused its dominant position by indulging in activities
that results in denial of market access. CCI has held that exclusive dealing by a
dominant firm results in restrictions on the market and therefore constitutes abuse of
dominance. 86 Libra entered into an exclusive distribution agreement with the taxi
drivers, placing conditions on their services. 87 This results in denial of market access
as other intra-city taxi providers were barred from entering into the market and
provide their services.
47. Furthermore, foreclosure in market results in restrictions on customers and leads to
loss of consumer welfare.88 This is because foreclosure results in entry barriers in the
market and may also result in present competitors leaving the market.89 This denies
the consumer from availing services, leading to consumer harm, which is a form of
denial of market access to buyers of the end product.90
48. Additionally, the Essential Facility Doctrine is used by EU and CCI to show abuse by
a dominant enterprise, by denying market access.91 According to CCI, a facility is
essential if without its access there is an insuperable barrier to entry, for competitiors
of the dominant firm, making their activities uneconomic. 92
49. In the instant case, the essential facility of taxi drivers is necessary to enter the market
of intra-city taxi services; and Libra implicitly constricts this facility
under its control by means of the exclusive agreements with the drivers. Everyone
wishing to enter the market needs this facility because without the availibilty of
drivers, they cannot sustain in the market.93

85
Competition Act 2002, s 4(2)(c)
86
GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Case no. 01/2010, para 84(CCI)
87
Memorial, para 5
88
M/s Peeveear Medical Agencies,Kerala v. All India Oranisation of Chemists and Druggists and Ors., Case no.
30/2011, para 13.12(CCI)
89
HT Media Ltd. v. Super Cassettes Industries Ltd., Case no. 40/2011, para 23(CCI)
90
Fast Way Transmission Pvt. Ltd. v. Kansan News Pvt. Ltd., Appeal no. 16/2012, para 23(COMPAT)
91
Sea Containers v. Stena Sealink- Interim Measures, 1994 OJ (L 15)8, para 9(EC)
92
Report by EC Commission in OECD, The Essential Facility Concept, 97(1996)
93
Oscar Bronner GmbH and Co. v. Mediaprint Zeitungs GmbH and Co., 1998 ECR I-7791, para 25(ECJ)

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10th IUMCC Phase II , 2019 ARGUMENTS ADVANCED
50. Further to check whether there is denial of market access, we need to take into
account the control of the facility by the monopolist, the denial of its use, and the
feasibility of providing it.94 In this case, Libra implicitly and exclusively controls the
supply of taxi drivers in the market. It was generally feasible for Libra to provide this
facility freely to all other competitors by not entering into exclusive agreements with
the drivers. Thus, Libra denied the use of this essential facility to other competitors in
the market, restricting their entry.
51. It can be concluded that Libra has withheld the essential facility needed to ente the
market, thus denying market access. Cumulatively, this resulted in the abuse of
dominant position by Libra, countervailing Section 4(1) of the Act. 95

94
Microsoft corporation v. Commission, Case T-201/04, para 779-784(Court of First Instance)
95
Competition Act 2002, s 4(1)

Memorial on behalf of the Appellant Page 24

10th IUMCC Phase,2019 PRAYER

PRAYER

Wherefore, in the light of the issues raised, arguments advanced and authorities cited, it is
humbly prayed before the Hon’ble Court that it may be pleased to adjudge and declare that:
 Libra has violated Section 3 of the Act with respect to the Exclusive Distribution
Agreement with the taxi drivers.
 Libra has violated Section 4 of the Act with respect to imposing unfair conditions on
its competitors and indulging in the practice of predatory pricing.
And pass any other order that this Hon’ble Court may deem fit in the interest of justice,
equity and good conscience.

Memorial on behalf of the Appellant Page 25