Respondant Memorial

TEAM CODE: 004
(Under §53B of the Competition Act, 2002)
Dylon Nutricia …Appellant
v.
Competition Commission of Bohemia …Respondent No. 1
Mother Care and Child Care …Respondent No. 2
Retailers Association for Milk …Respondent No. 3
Adiva Regina Cattle Feed Limited …Respondent No. 4
Brick Cattle Feed Limited …Respondent No. 5
Cautious Cattle Feed Limited …Respondent No. 6
Detro Cattle Feed Limited …Respondent No. 7
Clubbed With
Application No. ______/2017
(Under §53N of the Competition Act, 2002)
Retailer’s Association for Milk …Applicant
v.
Dylon Nutricia …Respondent
Memorandum filed on behalf of
Competition Commission of Bohemia, Mother Care and Child Care, Retailers Association
for Milk and Others.
Counsel appearing on behalf of
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Competition Commission of Bohemia, Mother Care and Child Care, Retailers Association
for Milk and Others.
TABLE OF CONTENTS
INDEX OF AUTHORITIES……………………………………………………………….3
LIST OF ABREVIATIONS………………………………………………………………..7
STATEMENT OF JURISDICTION……………………………………………………….9
STATEMENT OF FACTS………………………………………………………………..11
ISSUES FOR CONSIDERATION………………………………………………………..12
SUMMARY OF ARGUMENTS………………………………………………………….16
WRITTEN SUBMISSIONS……………………………………………………………….19
I. DYLON NUTRICIA HAS VIOLATED §4 OF THE COMPETITION ACT WITH
RESPECT TO THE SALE OF PACKAGED MILK AT UNFAIR PRICES……..19
A. DYLON IS AN ENTERPRISE UNDER §2(H) OF THE ACT……………….19
B. DYLON IS IN A POSITION OF DOMINANCE IN THE RELEVANT
MARKET……………………………………………………………………….20
i. MARKET FOR PROCESSING AND SUPPLY OF PACKAGED MILK IN
BOHEMIA IS THE RELEVANT MARKET………………………………..20
ii. DYLON IS DOMINANT IN THE IDENTIFIED RELEVANT
MARKET…………………………………………………………………...24
C. THE ACTIONS OF DYLON CONSTITUTE AN ABUSE OF DOMINANT
POSITION……………………………………………………………………….28
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II. THE CCB DECISION OF FINDING NO CONTRAVENTION OF SECTION 3 OF THE
COMPETITION ACT BY THE FOUR CATTLE MANUFACTURERS IS CORRECT
IN LAW………………………………………………………………………………..32
A. THE ACTIONS OF CATTLE FEED MANUFACTURERS WAS AN ACT OF
CONSCIOUS PARALLELISM AND NOT AN ACT PURSUANT TO ANY ANTI-
COMPETITIVE AGREEMENT………………………………………………….34
B. ALTERNATIVELY, THE CATTLE FEED MANUFACTURERS ARE
INCAPABLE TO ENTER INTO ANY ANTI-COMPETITIVE AGREEMENT
UNDER SECTION 3 WITH REFERENCE TO THE DOCTRINE OF SINGLE
ECONOMIC ENTITY…………………………………………………………….38
III. ALL THE CONDITIONS MENTIONED UNDER §53N OF THE ACT HAVE BEEN
SATISFIED…………………………………………………………………………….40
i. RAM IS A LEGAL PERSON UNDER §2(L) OF THE ACT…………………..40
ii. THE CLAIM HAS ARISEN OUT OF AN ORDER BY THE CCB……………41
iii. RAM HAS SUFFERED LOSSES AS A RESULT OF THE APPELLANT’S
ABUSE OF ITS DOMINANT POSITION………………………………………41
iv. THE CONSUMERS ALSO HAVE A CLAIM IN THE COMPENSATION……45
IV. THE IMPOSITION AND QUANTUM OF PENALTY AS PER THE IMPUGNED CCB
ORDER AGAINST THE APPELLANT IS VALID IN LAW……………………….46
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INDEX OF AUTHORITIES
A. STATUTES
1. Competition Act, 1998…………………………………………………………………19
2. Competition Act, 2002………………………………………………………………..19
3. Competition Commission of lndia (Determination of Cost of Production) Regulations,
2009…………………………………………………………………………………….39
B. TREATIES
Treaty on the Functioning of the European Union………………………………………….25
C. CASES
1. AEK Athens and Slavia Prague v. UFEA, CAS 98/200………………………………..37
2. AKZO Chemie BV v. Commission, 1991 ECR I-3359………………………………….25
3. All India Tyre Dealers Federation v. Tyre Manufactures Association, RTPE No. 20 of
2008………………………………………………………………………………………33
4. Anglo American Corporation/ Lonrho [1998] OJ L145/21……………………………...37
5. Arla Foods/Milk Line, Case No. COMP/M.6611………………………………………..22
6. AstraZeneca AB v. Commission Case T-321/05 [2010] ECR II-000…………………...25
7. Bayer v. Commission Case T-41/96, General Court [2000] ECR-II-3303………………35
8. Belaire Owners , Case No. 19/2010
……………………………………………………..30
9. Bijay Poddar v. Coal India Ltd. Case No. 59/2013……………………………………...28
10. British Airways v Commission, [2007] CEC 607, [2007] 4 CMLR 22………………...30
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11. British Leyland Plc. V. Commission of the European Communities, ECR [1986]
3263………………………………………………………………………………………30
12. Case C-453/99 Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and
others [2001] ECR I-6297………………………………………………………………..45
13. Case No. IV/ M.613, Jefferson Smurfit Group Plc./ Munksjo AB [1995] OJ
C169……………………………………………………………………………………...37
14. Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51
L.Ed. 241 (1906)……………………………………………………………………..42, 43
15. DLF Park Place Residents Welfare Association v. DLF House Development Ltd
16. France Telecom v. Commission Case T-340/03 [2007] ECR II-107……………..…21, 25
17. Friesland Foods/Campina, Case No. COMP/M.5046………………………….……21, 22
18. Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968)…………………42
19. Hawaii v. Standard Oil Co. of California, 405 U. S. 251, 405 U. S. 262, Pp. 431 U. S.
745-747…………………………………………………………………………………..43
20. Hilti AG v Commission, [1988] OJ L65/19, [1989] 4 CMLR 677…………………….. 26
21. Hoffmann-La Roche & Co. AG v. Commission, 1979 ECR 461………..…………24, 25
22. Hules AG v. Commission Case C- 199/92P, Court of Justice [1999] ECR-I-
4287…………………………………………………………………………………….35
23. Hydrotherm v. Compact, [1984] ECR 2999…………………………………………….38
24. Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977)………………………………………43
25. Joined cases C-192/95 to C-218/95 Sociétéomateb and others v Directeur général des
douanes et droits indirects [1997] ECR I-165………………………………………..45
26. Lactalis/ Puleva, Case No. COMP/M.5875…………………………………………..21
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27. M/s DLF Limited v Competition Commission of India & Ors, Appeal No. 20 of 2011,
2014CompLR1(CompAT)……………………………………………………………….47
28. M/s HT Media Ltd. v. M/s Super Cassettes Industries Ltd., Case no.- 40/2011………...29
29. MCX Stock Exchange Ltd. v. NSE India Ltd, Case No. 13/2009……………………….28
30. Michelin v. Commission, [1983] ECR 3461 (ECJ)……………………………………..31
31. Microsoft Corporation v. Commission, Case T-201/04………………………………...25
32. Prints India v. Springer India Pvt. Ltd., Case 16/2010, ¶9 (CCI)………………………20
33. Reliance Big Entertainment Limited v. Tamil Nadu Film Exhibitors Association, [2013]
CCI 90, 2013CompLR828(CCI)…………………………………………………………47
34. Shamsher Kataria v. Honda Cars, Case No. 3 of 2011…………………………………..29
35. SIV and Others v. Commission [1992} ECR-II-1403; Beguelin Import Co. v. SAGL
Import Export, [1971] ECR-949…………………………………………………………36
36. Solvay SA v. Commission Case T-57/01 [2009] ECR II-4621………………………….25
37. Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533, 38 S.Ct. 186, 62
L.Ed. 451 (1918)……………………………………………………………………..42, 43
38. State of Karnataka v. Krishna, (1987) 1 SCC 538: AIR 1987 SC 861…………………..48
39. Suretrack Rail Services Ltd. v. Infraco INP, [2002] EWHC 1316………………………39
40. United Brands Co. v. Commission, 1978 ECR 207……………………...………23, 24, 29
D. BOOKS
1. Roy, COMPETITION LAW IN INDIA (2nd edn., 2014)
2. Ariel Ezrachi, EU COMPETITION LAW (3rd edn., 2010)
3. R. Whish and D. Bailey, COMPETITION LAW (8th edn., 2015)
E. OTHER AUTHORITIES
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1. EU Guidance on the Commission’s Enforcement Priorities in Applying Article 82 EC
Treaty to Abusive Exclusionary Conduct by Dominant Undertakings (the ‘Guidance’)
[(2009/C 45/02)]……………………………………………………………………….24
2. Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to
Abusive Exclusionary Conduct by Dominant Undertakings, OJ 2009 (C 45)…………..25
3. Liyang Hou, Excessive Prices within EU Competition Law, European Competition
Journal (2011) Volume 7 Issue 1, 42…………………………………………………….29
4. Pinar Akman & Luke Garrod , When are excessive prices unfair ?,Journal of Competition
Law & Economics, 7(2), 403-426 ………………………………………………………30
5. Raghavan Committee on Competition Law……………………………………………...36
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LIST OF ABBREVIATIONS
SR. NO. ABBREVIATIONS EXPANSION

1. AAEC Applicable Adverse Effect on Competition
2. Acme Acme Group Plc.
3. Adiva Adiva Regina Cattle Feed Limited

4. Art. Article
5. Brick Brick Cattle Feed Limited

6. Cautious Cautious Cattle Feed Limited
7. CCB Competition Commission of Bohemia
8. CCI Competition Commission of India
9. Co. Company
10. COMPAT Competition Appellate Tribunal
11. Davenport Davenport Cooperative Society
12. Detro Detro Cattle Feed Limited
13. DG Director General
14. Dylon Dylon Nutricia
15. EC European Commission
16. EU European Union
17. FMCG Fast Moving Consumer Goods
18. Ltd. Limited
19. MCC Mother Care and Child Care
20. OECD Organization for Economic Cooperation and
Development
21. Pvt. Private
22. r/w Read with
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23. RAM Retailers Association for Milk
24. SC Supreme Court of India
25. SSNIP Small but Significant & Non-Transitory Increase in
Price
26. TFEU Treaty on the Functioning of the European Union
27. The Act The Competition Act, 2002
28. U.S. United States
29. USSC Supreme Court of the United States
30. & And
31. ¶ Paragraph
32. § Section
STATEMENT OF JURISDICTION
I. APPEAL NO. ____ OF 2017
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The Appellant, Dylon Nutricia, has approached this Honourable Tribunal under §53B of the
Competition Act, 2002. The Respondents, Competition Commission of Bohemia, Mother Care
and Child Care, Retailers Association for Milk, Adiva Regina Cattle Feed Limited, Brick Cattle
Feed Limited, Cautious Cattle Feed Limited and Detro Cattle Feed Limited, humbly submit to
the jurisdiction of this Honourable Court.
“Appeal to Appellate Tribunal
53B. (1)The Central Government or the State Government or a local authority or enterprise or
any person, aggrieved by any direction, decision or order referred to in clause (a) of Section
53A may prefer an appeal to the Appellate Tribunal.
(2) Every appeal under sub-section (1) shall be filed within a period of sixty days from the date
on which a copy of the direction or decision or order made by the Commission is received by the
Central Government or a local authority or enterprise or any person referred to in that sub-
section and it shall be in such form and be accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period
of sixty days if it was satisfied that there was sufficient cause for not filing it within that period.
(3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the
parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit,
confirming, modifying or setting aside the direction, decision or the order appealed against.
(4) The Appellate Tribunal shall send a copy of every order made by it to the Commission and
the parties to the appeal.
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(5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it
as expeditiously as possible and endeavor shall be made by it to dispose of the appeal within six
months from the date of receipt of the appeal.”
II. APPLICATION NO. ____ OF 2017
The Applicant has approached this Honourable Court under Section 53 N of the Competition
Act, 2002. The Respondent, Retailer’s Association For Milk (RAM), humbly submit to the
jurisdiction of this Honourable Court.
ISSUES FOR CONSIDERATION
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I. Whether Dylon Nutricia has violated §4 of the Act with respect to the sale of
packaged milk at unfair prices.
II. Whether the CCB’s decision of finding no contravention as regards §3 of the Act
by the four cattle feed manufacturers is correct in law.
III. Whether all the conditions mentioned §53N of the Act have been duly satisfied.
IV. Whether the imposition and quantum of penalty as per the CCB’s order against
Appellant is valid in law.
STATEMENT OF FACTS
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Milk Manufacturers:
Anmol is one of the largest milk and dairy products’ brands in Bohemia operated by Davenport
Cooperative Society in the state of Davenport. Dairy Fresh Ltd. and Farm Everyday are the
available alternatives.
Dylon, a leading world nutrition chain, set up business in Bohemia with factories across four
Bohemian states. Dylon has a specialized R&D team for devising innovative methods in health
and nutrition products, being a patent holder of unique tetra packaging for milk treated under
high temperature conditions and stringent manufacturing standards which extends storage time to
six months without refrigeration and by seven days after the packaging has been opened.
Available data shows Bohemia to be the largest milk producer in FY 2015-2016. The
aforementioned four collectively hold 75% share in the milk supply market.
In 2015-2016, Anmol dominated the market with its product range but Dylon’s market share
increased with demand for its packaged milk having surpassed that of other manufacturers and
the collective market share of the other three companies fell to 36%. All four manufacturers
supply milk in plastic pouches and tetra packs.
Cattle Feed Manufacturers:
Acme, a global giant in the animal husbandry and farm produce businesses, began operations in
Bohemia with the cattle feed business by entering into joint venture agreements with several
Bohemian entities to form Adiva, Brick, Cautious and Detro between October and November,
2012. Acme held over 50% shares in each of these entities.
Global Recession and impact on Bohemian Economy:
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Recession caused an economic slowdown in Bohemia which affected the unorganized sector in
all markets and industries. As a result, the sales of all FMCG reduced for a few months along
with a reduction in Adiva, Brick, Cautious and Detro’s supply from December 2014 to January
2015.
Action against Dylon:
In May 2016, MCC, a NGO in Bohemia, and RAM filed an Information under Section 19(1)(a)
of the Act before the CCB alleging abuse of dominance by Dylon for charging unfair prices for
its packaged milk over other milk product manufacturers in Bohemia.
The CCB found a prima facie case of Section 4 violation of the Act and directed the DG to
investigate into the matter.
Investigation by DG:
The investigation revealed an increase in milk prices by all milk suppliers in unusual
percentages; however, there was an extraordinary increase of 105% in the price charged by
Dylon for packaged milk which continued even after other milk suppliers reduced their prices.
Dylon held back its costing information citing their R&D expenses as the cause. There was an
increase in the price of cattle feed from April to July 2015and the DG discovered that Dylon’s
marketing of the value its unique packaging offered swayed many consumers in its favour,
resulting in increased sales.
Cartelization Complaint against cattle feed manufacturers:
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During pendency of investigation, Dylon filed an Information against Adiva, Brick, Cautious,
Detro under Section 19(1)(a) for cartelization in the manufacture of cattle feed through limiting
and controlling production and supply of same and fixing prices.
Investigation by DG into complaint of Cartelization:
On 20 December 2014, the cattle feed manufacturers, sans Adiva, attended a seminar followed
by dinner. The DG considered the telephone records of the CEOs of the four from December
2014 to March 2015, finding an exchange of several calls and SMSs in that period.
Request made by Davenport Committee to reduce prices was refused via identical letters and the
companies stated that their prices would follow the market trend.
All four cattle feed manufacturers were found to have colluded to curtail production and supply
from January to March 2015, leading to an increase in the price of cattle feed from April to July
2015. Justification offered by manufacturers, relating the reduction in production and supply to
the economic slowdown of Bohemian economy, was unaccepted. ‘Circumstantial’ evidence was
relied upon to conclude that the manufacturers entered into a collusive agreement in violation of
Section 3(3) of the Act.
CCB Order:
CCB agreed with the recommendations of the DG and held the conduct of Dylon as abusive,
contravening of Section 4(2)(a)(ii) of the Act and benefitting from the significant increase in
price. The CCB disagreed with the DG’s recommendation as regards the alleged cartel holding
no contravention of Section 3(3) of the Act by virtue of them being a single economic entity.
CCB issued the following directions in the order, against Dylon:
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i) Direction to cease and desist from charging unfair prices in the sale of packaged milk;
ii) Direction to pay a penalty of 10% of average annual turnover for the last three years.
Appeal to COMPAT:
Aggrieved by the decision of CCB, Dylon appealed to COMPAT contending both the imposition
and quantum of penalty to be unsustainable and RAM disqualified for compensation under the
Act. The respondents were CCB, MCC, RAM, and the four cattle feed manufacturers. RAM
filed an application for compensation under Section 53N of the Act.
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SUMMARY OF ARGUMENTS
I. DYLON NUTRICIA HAS VIOLATED §4 OF THE COMPETITION ACT WITH
RESPECT TO THE SALE OF PACKAGED MILK AT UNFAIR PRICES.
§4 of the Act prohibits an enterprise from abusing its dominant position in the relevant market.
Dylon is a firm engaged in economic activity, hence is an enterprise. The market for processing
and supply of milk is the relevant market in the instant case. This is because all the four dairy
manufacturers, (i.e.) Anmol, Farm Everyday, Dairy Fresh and Dylon, manufacture packaged
milk as well as loose milk which have the same physical characteristics and the same intended
use, making packaged milk substitutable with loose milk. Further, the geographic relevant
market is Bohemia because all four milk manufacturers compete only in Bohemia since the
market is confined to the same along with the fact that the market is subjected to the regulatory
regimes of Bohemia having consumers belonging to the same. It is submitted that Dylon is in a
position of dominance in the relevant market because it holds substantial market share in the
relevant market and was able to conduct its business irrespective of the behaviour of its
consumers to earn supra normal profits. Further, there is the existence of entry barriers in the
relevant market. Also, Dylon’s actions amount to abuse under §4(2)(a)(ii) of the Act since it has
imposed excessive and unfair price for the sale of its packaged milk in the identified relevant
market.
II. THE CCB’S DECISION AS REGARDS FINDING NO CONTRAVENTION OF § 3
OF THE COMPETITION ACT BY THE FOUR CATTLE FEED
MANUFACTURERS IS CORRECT IN LAW.
§ 3 refers to an agreement entered into between enterprises engaged in identical or similar trade
of goods or provision of services which causes adverse affect on the competition. It is humbly
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submitted that there is no contravention of § 3 by the four cattle feed manufacturers because they
are a single economic entity and not rival competitors. This is because Acme holds over 50%
share in all the four joint ventures and such a kind of share holding is presumed to have decisive
influence of the parent company on the joint venture as was supported by circumstantial
evidence in the present case. Further, they are incapable of entering into any anti- competitive
agreement because their act was an act of conscious parallelism and not an act pursuant to an
anti-competitive agreement. This is due to the fact that the disruption in the supply of the
ingredient available only from the unorganized market in the aftermath of the economic
slowdown was the reason behind the very reduction of the supply of the cattle feed and all the
four manufacturers are subject to similar cost fluctuation in setting their product prices and in
terms of supply of the cattle feed.
III. ALL THE CONDITIONS MENTIONED UNDER §53N OF THE ACT HAVE
BEEN SATISFIED.
§ 53N (1) provides for conditions under which an application to the COMPAT for adjudication
of a claim for compensation can be filed by a person or an enterprise, which have been satisfied
in the instant case. It is submitted that RAM is a legal person because it is an association of dairy
retailers. Also, since the cause arose out of an order as passed by the CCB after its finding that
the appellant had abused its dominant position via excessive pricing. Furthermore, RAM has
suffered losses as a result of the appellant’s abuse of its dominant position. The consumers also
have a claim in the compensation by virtue of them being the indirect purchasers and incurring
losses due to Dylon’s 105% hike in milk prices.
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IV. THE IMPOSITION AND QUANTUM OF PENALTY AS PER THE IMPUGNED
CCB ORDER AGAINST THE APPELLANT IS VALID IN LAW.
It is humbly submitted that the CCB has issued a ‘cease and desist’ order from charging unfair
prices in the sale of packaged milk along with the penalty of 10% of the appellant’s average
annual turnover for the last three years against the appellant. The same is suitable in law because
the power of the CCI to impose monetary penalty is derived from §27(b) of the Act, which
allows it to impose such penalty, as it may deem fit which shall be not more than ten per cent of
the average of the turnover for the last three preceding financial years. Further, the CCB can
impose heavy penalty when the abuse of dominant position is in respect of the basic necessities
like milk and when the extent of abuse makes it clear that the enterprise has been grossly abusing
its dominant against a vulnerable section of nifty intraday chart consumers. Furthermore, Dylon
refused to assist the commission in its work.
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WRITTEN SUBMISSIONS
V. DYLON NUTRICIA HAS VIOLATED §4 OF THE COMPETITION ACT
WITH RESPECT TO THE SALE OF PACKAGED MILK AT UNFAIR
PRICES.
1. The §4(1) of the Act states that no enterprise or group shall abuse its dominant position. 1
The CCB decision that Dylon has violated §4 of the Act should be upheld because first,
Dylon is an enterprise under §2(h) of the Act [A]. Secondly, Dylon is in a position of
dominance in the relevant market [B]. Lastly, the actions of Dylon amounts to abuse
under §4(2)(a)(ii) of the Act [C].
A. DYLON IS AN ENTERPRISE UNDER §2(H) OF THE ACT
2. Provisions of §4 of the Act are only applicable to an enterprise or a group. 2 An enterprise
means a person who engages in any activity relating to the production, storage, supply,
distribution, acquisition or control of articles or goods.3 Dylon Nutricia is a leading world
nutrition chain and has set up it's business in Bohemia recently. 4 It is one of the leading
milk suppliers in Bohemia.5 It sells products focused towards the nutrition of mothers and
1
§4(1), Competition Act, 2002.
2
3
§2(h), Competition Act, 2002.
4
Proposition, ¶5, Line 1-2
5
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infants. It is also a patent holder of a unique tetra packaging used for packaged milk
supply.6 Therefore, it is submitted that BKL qualifies as an enterprise under the Act.
B. DYLON IS IN A POSITION OF DOMINANCE IN THE RELEVANT MARKET
i. MARKET FOR PROCESSING AND SUPPLY OF PACKAGED MILK IN
BOHEMIA IS THE RELEVANT MARKET.
3. The ascertainment of the relevant market is essential for analysing a case of abuse of
dominance.7 The dominant position of an enterprise or a group has to be established
within the identified relevant market.8 When determining what constitutes the relevant
market, due regard must be given to both the relevant product as well as geographic
market.9
4. All those products or services which are regarded as interchangeable or substitutable by
the consumer form part of the same relevant product market. 10 Relevant product market is
primarily determined by taking into consideration the product substitutability from a
consumer’s perspective. The Commission has to take consumer preferences into
consideration for the determination of the relevant product market. 11 The market of
supply of packaged milk is different from loose milk. Globally, competition authorities
have identified separate market for fresh basic dairy products on one hand and long life
6
7
Prints India v. Springer India Pvt. Ltd., Case 16/2010, ¶9 (CCI).
8
Explanation 2, §4(2), Competition Act, 2002.
9
10
§2(t), Competition Act, 2002.
11
§19(7) (c), Competition Act, 2002.
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basic dairy products on the other.12 With regard to long life dairy products, the
Commission identified separate markets for long life milk.13
5. In Friesland/Campina14, the commission held that the reason to assess two different
markets for long life packaged milk and other fresh dairy products such as loose milk was
notably that the customers considered long life milk as preferable product in terms of
taste quality and packaging. The market investigation in this case confirmed the
distinction between fresh and long life dairy products. It was revealed that despite the
improvements in the taste for long life basic dairy products, customers still perceive long
life dairy products as different from fresh basic dairy products because of taste, shelf-life,
storage possibilities and placement in the supermarket. 15 Where it was found that high
percentage (about 80%) of subscribers who would not abandon high speed access in
response to a price increase was considered to be a very strong indication of the absence
of demand side substitution.16 Similarly the demand of the packaged milk in Bohemia
irrespective of increase in the price did not decrease. It is evidence of the fact that the
consumers prefer packaged milk over loose milk. Both of them are not substitutable and
therefore fall under different product market. Packaged milk can be delivered according
to customer’s specification and thus are customized products.17 Thus we see that the
12
Friesland Foods/Campina, Case No. COMP/M.5046, ¶ 141 [Hereinafter Friesland case]
13
Lactalis/ Puleva, Case No. COMP/M.5875, ¶ 96 and ¶125 [Hereinafter Lactalis case]
14
Id.
15
Id. at 12
16
France Telecom v. Commission Case T-340/03 [2007] ECR II-107 [Hereinafter France
Telecom Case]
17
Arla Foods/Milk Line, Case No. COMP/M.6611 [Hereinafter Arla Foods Case]
Page | 22
packaged milk provides with wide variety of options for the customers which is not
available in case of loose/unpackaged milk. Taking into consideration the above aspect,
the relevant market is the “processing and sale of packaged milk”.
6. The ‘relevant geographic market’ should also be taken into consideration to identify the
relevant market.18 The CCB should pay due regard to the factors such as adequate
distribution facilities,19 transport,20 consumer preference,21 etc., while identifying the
relevant geographic market. The long life products can be transported over longer
distance than fresh products which may result in the broader geographical markets.22 The
maximum outreach of fresh dairy product was found to be 650 Km. 23 Thus the outreach
of loose milk is also low. The insignificant transport cost in case of packaged milk helps
the dairy companies to reach numerous customers which is not possible in case of loose
milk. At the very outset, the loose milk market is narrow and confined to the nearby
regions of the manufacturers processes the loose milk. With regard to the supply of long
life milk the commission has concluded in Friesland case24 that the geographical
dimension is national. As under Competition Law, CCI has stated that the relevant
18
19
§19(6)(d), Competition Act, 2002
20
§19(6)(e), Competition Act, 2002
21
§19(6)(g), Competition Act, 2002
22
Friesland Case, Supra note 12
23
Id.
24
Id. at 17
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geographic market can only be India.25 Therefore the “relevant geographic market” in this
case is the State of Bohemia.
ii) DYLON IS DOMINANT IN THE IDENTIFIED RELEVANT MARKET
7. 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. 26
According to the test laid down in United Brands27, a firm would be able to behave
independently of competitive forces, if it has acquired a position of economic strength.28
8. The relevant market in the instant case is the “processing and sale of packaged milk”. It is
humbly submitted that Dylon has acquired a dominant position in the relevant market.
While inquiring into the dominant position of the firm due regard must be given to the
market share of the enterprise, 29 size and resources of the enterprise, 30 size and
importance of the competitors,31 economic power of the enterprise including commercial
advantages over the competitors32 etc. One of the important aspect recognized globally is
that very large market shares are highly significant evidence of the existence of a
dominant position.33 Other relevant factors are the relationship between the market shares
25
A. Roy, COMPETITION LAW IN INDIA, 130 (2nd edn., 2014)
26
27
United Brands Co. v. Commission, 1978 ECR 207, ¶65 (ECJ) [hereinafter, United Brands].
28
Id.
29
§19(5)(a), Competition Act, 2002.
30
§19(5)(b), Competition Act, 2002.
31
§19(5)(c), Competition Act, 2002.
32
§19(5)(d), Competition Act, 2002.
33
Hoffman Case
Page | 24
of the undertaking concerned and of its competitors, especially those of the next largest,
the technological lead of the undertaking over its competitors, the existence of a highly
developed sales network and the absence of potential competition. 34 This notion of
independence is related to the degree of competitive constraint exerted on the undertaking
in question. Dominance entails that these competitive constraints are not sufficiently
effective and hence that the undertaking in question enjoys substantial market power over
a period of time. This means that the undertaking’s decisions are largely insensitive to the
actions and reactions of competitors, customers and, ultimately, consumers.35
9. It is humbly submitted that Dylon holds substantial market share in the relevant market.
There are only four competitors in the market of “processing and sale of packaged milk”
including Dylon along with Anmol, Dairy Fresh and Farm Everyday. 36 As provided in the
financial year 2015-16, the market share of Dylon surpassed the other three competitors
as the collective market share of the Anmol, Dairy Fresh and Farm Everyday dipped to
36%.37 With no other competitor left in the market, Dylon is estimated to hold 64% of the
market share in the packaged milk. There are catena of judgments which refer to the
market share of the enterprise to be one of the important factor to decide the dominant
position of the firm. In the Hoffman case 38 the commission took into consideration the
aspect of market share and stated that very large shares are in themselves, and save in
34
United Brands Case, supra note 27
35
EU Guidance on the Commission’s Enforcement Priorities in Applying Article 82 EC Treaty to Abusive
Exclusionary Conduct by Dominant Undertakings (the ‘Guidance’) [(2009/C 45/02)]
36
37
38
Page | 25
exceptional circumstances, evidence of the existence of a dominant position.39 There are
catena of judgements which considers high market shares as indication of dominance. 40 In
Akzo41 and Microsoft case42, the commission has laid down the precedent that very large
market shares in excess of 50% are considered in themselves, and but for exceptional
circumstances, evidence of the existence of a dominant position.
10. The decision in Virgin/British Airways43 was based on the fact that though British
Airways had only 39.7% market share which may be small to consider it in a dominant
position but it is to noted that the market share of British Airways was larger than it's
rivals and it constituted enough proof of it's dominant position in the market. As already
stated the market shares of the competitors are also taken into `consideration while
determining the dominant position of an enterprise. 44 In this case with reference to market
share none of the enterprises are remotely close to the Dylon and thus it allows Dylon to
operate independently in the market. 45 Another important aspect which cannot be ignored
while determining the dominant position of the enterprise is the economic strength and
39
Hoffmann-La Roche & Co. AG v. Commission, 1979 ECR 461, ¶4 (ECJ) [hereinafter, Hoffmann].
40
France Telecom v. Commission Case T-340/03 [2007] ECR II-107, Solvay SA v. Commission
Case T-57/01 [2009] ECR II-4621, AstraZeneca AB v. Commission Case T-321/05 [2010] ECR
II-000
41
AKZO Chemie BV v. Commission, 1991 ECR I-3359 [hereinafter, Akzo]
42
Microsoft Corporation v. Commission, Case T-201/04[hereinafter, Microsoft]
43
OJ [2000] L 30/1
44
45
Page | 26
commercial advantages of the enterprise over the competitors. 46 In Eurofix- Bauco/
Hilti47, the Hon’ble court took into consideration the aspect of technological aspects of a
company which gives it an edge over it's competitors creating a dominant position for it.
The court held that “In addition to the strength derived from it's market share Hilti
benefits from other advantages that reinforce it's position in the nail gun market. These
include novel technology used in it's nail gun, the patent protection for it's cartridge
strips, it's strong research and development position and it's strong distribution system
Hilti market power and dominance stems principally from it's large share of the sales of
nail guns coupled with the patent protection for it's cartridge strips.” Dylon heavily
advertises about the value of it's unique tetra packaging which has swayed many
customers in it's favour resulting in significant boost in sales.It holds patent for the
same.48 It has already one of the leading nutrition chain globally which gives it an edge
over the competitors and also specialized R & D team comprising of scientists and
nutritionists for devising new and innovative methods in health and nutrition products
shows the technical advancement of Dylon. In the Wanadoo Interactive decision49, the
Commission placed emphasis on the fact that Wanadoo, as a subsidiary of France
Telecom active on the ADSL residential mass market, had benefited from a number of
technical advantages.
11. Unlike enterprises in a market characterized by effective competitive constraints, a
dominant enterprise is able to price above the competitive level and earn supra normal
46
§19(5)(d), Competition Act, 2002.
47
[1988] OJ L65/19, [1989] 4 CMLR 677
48
Proposition ¶5 Line 8
49
§19(4)(d), Competition Act, 2002
Page | 27
profits in the process. Further, dominant enterprise can also maintain supra normal profits
by reducing output and hence escalating demand of the product. The key point is whether
the enterprise can conduct its business operations irrespective of the behaviour of the
competitors, it's customers and consumers. If the answer is yes, then the enterprise/group
will be considered to be in a position of strength. 50 It is important to understand that
Dylon started increasing the price of the packaged milk from April to June 2016 and
irrespective of the same, the sale of the Dylon’s packaged milk surpassed the supply of
packaged milk of all other manufacturers.51 This shows that Dylon was able to conduct
it's business irrespective of the behaviour of it's consumer and thus was very much
dominant in the relevant market of “processing and sale of packaged milk”.
12. The existence of entry barriers in the relevant market is also taken into consideration to
ascertain the dominance of an enterprise.52 In the instant case, the entry into the relevant
market is difficult as Dylon’s packaged milk has gained vast recognition in the state of
Bohemia and this is evident from the fact that irrespective of increase of the price of the
packaged milk by 105%, the market share of the Dylon has shot up and surpassed the
collective market share of three manufacturers.53 The incorporation of new dairy
manufacturing unit or changing the manufacturing unit by existing manufacturer in
consonance to the advanced set up of Dylon’s involves high capital cost. In conclusion, it
is submitted that Dylon is dominant in the relevant market.
50
51
52
§19(4)(h), Competition Act, 2002.
53
Proposition ¶6 Line 6-7
Page | 28
C. THE ACTIONS OF DYLON CONSTITUTE AN ABUSE OF DOMINANT
POSITION
13. It is submitted that Dylon has abused its dominant position according to §4(2)(a)(ii) of
the Act because, Dylon has imposed excessive and unfair price for the sale of it's
packaged milk in the identified relevant market. It is to be noted that there are two sets of
pricing abuses: unfair and discriminatory. Unfair pricing is one where the pricing conduct
of the dominant player is unfair with respect to the other stakeholders in the market, be it
the consumers or other competitors.54
14. §4(2)(a)(ii) of the Act provides that the indirect or direct imposition of unfair or
discriminatory conditions in the purchase or sale of goods of service constitutes abuse of
dominant position.55 The term ‘unfair’ has not been defined anywhere in the Act.56 It has
to be examined either in the context of unfairness in relation to customers, or in relation
to a competitor.57 In the given case at the very outset Dylon increased the price of the
packaged milk by 105% in the period between April to July 2015. 58 Upon investigation,
Dylon stated that the increase in price was due to the increase in the price of the cattle
feed by the four cattle feed manufacturers i.e Adiva, Bricks, Detro and Cautious.59 The
54
55
56
MCX Stock Exchange Ltd. v. NSE India Ltd, Case No. 13/2009, ¶ 10.71 (CCI).
57
Bijay Poddar v. Coal India Ltd. Case No. 59/2013, ¶57 (CCI).
58
Proposition, ¶13, Line 4
59
Proposition ¶13 Line 8-9
Page | 29
CCI, in the Super Cassettes case 60 and the Automobile spare parts case 61, relied on the
United Brand62 case decided by the European Court of Justice which held that a price
charged is excessive if it has no reasonable relation to the economic value of the product
supplied.63
15. It may be further substantiated by the two staged test laid down in the United Brands 64
case. It can be understood from the below given example. Consider a monopolist that
optimally changes the same price over two periods but in the second period the
monopolist is more efficient and supplies a product that better suits it’s consumer
preferences. If there is no change in the quality of the product, an abuse will be found if
the price cost margin is deemed excessive. It is to be considered that the firms conduct
has led to extra benefits for the firm. This benefits is at the customer’s expenses.65 In
another case the difference between the fee for the right hand vehicle and left hand
vehicle meant that fee was disproportionate to the economic value of the service provided
and therefore was held to be abusive.66
60
M/s HT Media Ltd. v. M/s Super Cassettes Industries, Case No. 40 of 2011
61
Shamsher Kataria v. Honda Cars, Case No. 3 of 2011
62
United brands Case, Supra
63
Liyang Hou, Excessive Prices within EU Competition Law, European Competition Journal
(2011) Volume 7 Issue 1, 42

64
United Brands Case Supra note 27
65
Pinar Akman & Luke Garrod , When are excessive prices unfair ? Journal of Competition Law &
Economics, 7(2), 403-426
66
British Leyland Plc. V. Commission of the European Communities, ECR [1986] 3263
Page | 30
16. Considering the increase in the price of cattle feed was A% which led to increase in the
prices of the packaged milk by all dairy manufacturers. Dylon passed this increase in cost
to it’s consumers. But apart from this increase, Dylon increased the price of the packaged
milk by more than A% as evident from the fact that there was an extraordinary increase
in the price of Dylon’s packaged milk by 105% which was unreasonable as there was no
increase in the value of the product provided by Dylon. Dylon cited R&D expenses in its
defense for extraordinary increase in the price of the milk but it is to noted that at the very
outset Dylon already used to charge premium for its unique tetra packaging.67
17. In Belaire Owners’ Association case68, CCI and COMPAT dealt with ‘exploitative’
nature of abuse (exploiting customers) as the jurisprudence on abuse of dominant position
mainly centered on the ‘exclusionary’ abuses like price predation or refusal to deal etc.,
resulting in the exclusion of a competitor from the market. COMPAT recognized the
principle of ‘special responsibility of a dominant enterprise. This principle had been laid
down by European Court of Justice in the Michelin Case69 in 1983. It means that a firm in
a dominant position has a special responsibility not to allow its conduct to cause any
detrimental impact on the stakeholders. The abuse of dominant position by Dylon has
caused detriment to the consumer as they are being charged excessive prices for the
packaged milk.
67
Clarification
68
Case No. 19/2010
69
Michelin v. Commission, [1983] ECR 3461 (ECJ)
Page | 31
2. THE CCB DECISION OF FINDING NO CONTRAVENTION OF SECTION 3 OF
THE COMPETITION ACT BY THE FOUR CATTLE MANUFACTURERS IS
CORRECT IN LAW
1. Section 3 refers to an agreement entered into between enterprises engaged in identical or
similar trade of goods or provision of services which causes adverse affect on the
competition.70 It must be kept in mind that the provision, with respect to agreement, is
only applicable in cases when there is an agreement between parties who are completely
independent of each other and operate autonomously. 71 CCB in its order exempted the
70
COMPETITION ACT
71
Page | 32
cattle feed manufactures on the basis of the doctrine of single economic entity. 72 It is
humbly submitted that the order of CCB in finding no contravention of Section 3 by the
four cattle feed manufacturers is correct in law as it is an established principle that
“single economic entities are not rival competitors and thus incapable to enter into any
anti-competitive agreement. This contention is sought to be substantiated on the grounds
i) The actions of cattle feed manufacturers was an act of conscious parallelism and not an
act pursuant to an anti-competitive agreement. ii) Alternatively, the cattle feed
manufacturers are incapable to enter into any anti-competitive agreement under Section 3
with reference to the doctrine of single economic entity.
i) THE ACTIONS OF CATTLE FEED MANUFACTURERS WAS AN ACT OF
CONSCIOUS PARALLELISM AND NOT AN ACT PURSUANT TO ANY
ANTI-COMPETITIVE AGREEMENT
2. In a market which is oligopolistic in nature, it is more likely that each market player is
aware of the actions of the other and influences each others’ decisions. No doubt,
interdependence between firms is an important characteristic of such a market which
would mean that each firm in such a market takes into account the likely reactions of
other firms while making independent decisions particularly as regards prices and
output.73
3. It is to be considered that high concentration may provide a structural reasoning for
collusive action resulting in parallelism related to price or output. Thus, it is very
important to differentiate between ‘rational’ conscious parallelism arising out of the
interdependence of the firms’ strategic choices and parallelism stemming from purely
72
Proposition
73
Page | 33
concerted action. Thus to infer the activity of cartelization there is further requirement of
strong evidences. Economic theory has demonstrated convincingly that ‘conscious
parallelism’, is not uncommon in homogeneous oligopolistic markets. It is necessary that
the competing firms are conscious of one another’s activities in all phases, including
marketing and pricing. Awareness of such outcomes especially where there is little real
difference in product the it is quite probable that in many such instances, conscious
parallelism may be dictated solely by economic necessity.74
4. In All India Tyre Dealers75 Case the CCI noted that the direction in which prices were
moving was parallel. The tyre manufacturers took the defense that price parallelism in the
tyre industry arises on account of the fact that the products sold are homogenous which
makes it difficult for businesses to charge different prices to customers. It was pointed
out that the products in the tyre industry share similar sources of inputs, which means that
competitors are subject to similar cost fluctuations in setting their product prices. Also
another point raised was that the competitors monitor each other’s prices closely and
match competitors’ price movements. Based on the above, the CCI undertook elaborate
analysis of data relating to production; capacity utilization; cost analysis; cost of
sales/sales realization/margin; cost of production and natural price movement; net dealer
price and margin to analyse whether there was any evidence of a collusion between the
tyre manufacturers.
5. All the four cattle feed manufacturers entered into an R&D agreement in January 2013 to
enable each of them to meet the standards required under the cattle feed Regulations, in
74
75
All India Tyre Dealers Federation v. Tyre Manufactures Association, RTPE No. 20 of 2008
Page | 34
an efficient manner using modern technology.76 It is provided that in pursuant to the same
they agreed to use certain ingredient in the manufacture of cattle feed, which was
available only from local, unorganized supply chains.77 After the economic slowdown the
worst affected sector was the unorganized sector in all markets and industries. In
furtherance to the same there was reduction of supply of cattle feed from all the four
cattle manufacturers. The very reason behind the reduction of supply was the dependence
of all the four cattle feed manufacturers on the unorganized supply chain for the specific
ingredients which was used by them for their cattle feed manufacturing. 78 The end
product of all the cattle feed manufacturers are homogeneous and the ingredients used for
the same are identical. Thus all the four manufacturers are subject to similar cost
fluctuation in setting their product prices and in terms of supply of the cattle feed.
6. A distinction should be drawn between cases in which an undertaking has adopted a
genuinely unilateral measure and thus without the express or implied participation of
another undertaking and those in which the unilateral character of the measure is merely
apparent.79 In the given case Adiva was the first to reduce the supply of the cattle feed
subsequent to the economic slowdown and there is no evidence of any kind of concerted
practise. It was in furtherance to the economic slowdown that all the others cattle feed
manufacturer reduced their supply. Parallel conduct cannot be regarded as furnishing
proof of concerted practise unless it constitutes the only plausible explanation for such
76
Proposition
77
Proposition
78
Proposition
79
Bayer v. Commission Case T-41/96, General Court [2000] ECR-II-3303
Page | 35
conduct.80 There is an alternative explanation for the conduct of the four cattle feed
manufacturers. The disruption in the supply of the ingredient available only from the
unorganized market in the aftermath of the economic slowdown was the reason behind
the very reduction of the supply of the cattle feed. Thus it disproves any kind of anti-
competitive agreement between the cattle feed manufacturers.
ii) ALTERNATIVELY, THE CATTLE FEED MANUFACTURERS ARE
INCAPABLE TO ENTER INTO ANY ANTI-COMPETITIVE AGREEMENT
UNDER SECTION 3 WITH REFERENCE TO THE DOCTRINE OF SINGLE
ECONOMIC ENTITY.
7. It is required that the parties to the agreement are engaged in rival or potentially rival
activities. A potential rival is one who could be capable of engaging in the same type of
activity. Such a provision has generally been interpreted to mean that firms that are
under common ownership or control is not considered as "rival" or "potentially rival"
firms".81
8. When a company exercises decisive influence over another company they form a single
economic entity and, hence, are part of the same undertaking. The same is true for sister
companies, that is to say, companies over which decisive influence is exercised by the
same parent company. They are consequently not considered to be competitors even if
they are both active on the same relevant product and geographic markets. 82 Even with
80
Hules AG v. Commission Case C- 199/92P, Court of Justice [1999] ECR-I- 4287
81
Raghavan Committee on Competition Law
82
Para 11 of the Commission’s Guidelines on Horizontal Cooperation Agreements,
Page | 36
respect to the EU jurisprudence on the doctrine of single economic entities, there are
catena of judgements which suggests that Article 101 TFEU which is almost in
consonance to Section 3 of the Competition Act refers only to the relations between
economic entities which are capable of competing with one another and does not cover
agreements or concerted practices between undertakings belonging to the same economic
unit.83
9. Acme holds over 50% share in all the four joint ventures. 84 The other shareholding is
dispersed. It is to be taken into consideration that such a kind of share holding is

85
presumed to have decisive influence of the parent company on the joint venture. The
Commission in one occasion has considered that the level of holding would suffice to
establish control of the parent company.86 The Commission repeated the same test
holding that where a shareholder has a substantial interest through its holding in the
undertaking and the remaining shares are widely dispersed then that shareholder de facto
controls the voting at the annual meeting and thus that shareholder exercises decisive
influence on the undertaking.87 According to EU jurisprudence on the Doctrine of Single
Economic Entity “Control” is defined as the possibility of exercising decisive influence
83
SIV and Others v. Commission [1992} ECR-II-1403; Beguelin Import Co. v. SAGL Import
Export, [1971] ECR-949

84
Proposition
85
Optical fibre
86
Anglo American Corporation/ Lonrho [1998] OJ L145/21
87
Case No. IV/ M.613, Jefferson Smurfit Group Plc./ Munksjo AB [1995] OJ C169
Page | 37
on an undertaking.88 It is therefore not necessary to show that the decisive influence was
exercised or not by the undertaking. It is presumed to be already in existence.
10. In AEK Athens and Slavia Prague v. UFEA89 both AEK Athens and Slavia Prague
qualified to participate in the 1998/1999 UEFA Cup competition. However, as both clubs
were owned by the same company (ENIC, based in the United Kingdom) the UEFA
decided, on account of their common ownership, that the clubs were incapable of
competing. As a consequence it was decided not to admit AEK Athens to the UEFA Cup,
unless ENIC relinquished control of one the clubs. The Court of Arbitration for Sport
found that competition between clubs with a common owner was not possible. 90 The
current position adopted in both the US and the EU is that separate legal entities with a
common owner are presumed not to be capable of competing. In the US the Supreme
Court set out this position in Copperweld v. Independence Tube91
11. The inability of separate legal entities to compete inter se when they have a common
owner is presumed or assumed in a variety of contexts outside the field of EU
competition law. In one of the case with respect to the rules for allocation of the right to
provide third generation telephony services in the United Kingdom a telecoms licence
was not awarded to any person connected or associated with any person that also holds a
telecoms licence.92 Hydrotherm v. Compact93 is often treated as the leading case on
competition between separate legal entities with a common owner.49 The case actually
88
Article 3(2) of the Merger Regulation, Para 16 of the Consolidated Jurisdictional Notice
89
CAS 98/200
90
AEK Athens
91
467 U.S. 752 (1984)
Page | 38
concerned the impossibility of competition between the owner and the separate legal
entities he/she/it owns. In the case of Suretrack Rail Services Ltd. v. Infraco INP 94 the
argument that the subsidiary take their own decision does not indicate whether these
subsidiaries are either independent of each other or parent companies. If the fact that the
directors of a subsidiary take their own decision were enough to prevent the subsidiary
from being considered as part of a single economic unit for competition law purposes,
then all subsidiaries would be treated as being separate undertakings. Chapter 1 of the
UK Competition Act 1998 was held not to be applicable as the three companies
concerned were subsidiaries of the same parent company and subsequently an agreement
between such undertakings did not exist.
12. The CCI has noted and accepted the international accepted doctrine of single economic
entity in its decisional practice. It has been noted by the CCI and Competition Appellate
Tribunal that agreement between enterprises which form part of the same group, owing to
the fact that the sole control is exercised by one company, cannot be assessed under
section 3 of the Competition Act. The rationale adopted by the CCI is that the agreement
referred to under section 3 refers to agreement between two enterprises that are
independent of each other, and not between two enterprises which are part of the same
group. The rationale is that enterprises within the same group are not autonomous in their
92
Para 3.3.2(c) of the Wireless telegraphy (third generation licences) Notice 1999, issued
pursuant to the Wireless telegraph (third generation licences) Regulations 1999

93
[1984] ECR 2999
94
[2002] EWHC 1316 (para 18)
Page | 39
operations since the decisive influence over such enterprises can be held by a single
enterprise.95
COMPAT has the power to pass an order for compensation under §53N of the Act, for the loss
or damage caused to the Applicant as a result of any contravention of the provisions of Chapter
II by any enterprise.96 It is, thus, submitted that the application should be granted by COMPAT
because all the conditions mentioned under §53N of the Act have been satisfied [A].
A. ALL THE CONDITIONS MENTIONED UNDER §53N OF THE ACT HAVE BEEN
SATISFIED
§ 53N (1) provides for conditions under which an application to the COMPAT for adjudication
of a claim for compensation can be filed by a person or an enterprise. 97 It is, therefore, submitted
95
ABIR ROY BOOK CITATION
96
§53N, Competition Act, 2002
97
§53N(1), Competition Act, 2002
Page | 40
that all the conditions for the same have been satisfied because, firstly, RAM is a legal person [i].
Secondly, the claim has arisen out of an order as passed by CCB [ii]. Thirdly, RAM has suffered
losses as a result of the appellant’s abuse of its dominant position. [iii] Lastly, the consumers also
have a claim in the compensation. [iv]
i. RAM Is A Legal Person Under §2(L) Of The Act.
§53N provides that an application for compensation can be filed only by the central or state
government, a local authority, an enterprise or any person. 98 In the instant case, RAM is an
association of dairy retailers.99 Therefore, it is submitted that RAM is a legal person.
ii. The Claim Has Arisen Out Of An Order By The CCB
The Act provides that a claim for compensation should arise out of the findings of the
Commission or the orders of COMPAT in an appeal against any finding of the Commission. 100 In
the instant case, the CCB has passed an order after finding that the appellant has abused its
dominant position via excessive pricing.101 Consequently, it is submitted that this claim for
compensation filed by RAM has arisen out of the abovementioned order of CCB.
iii. RAM Has Suffered Losses As A Result Of The Appellant’s Abuse Of Its
Dominant Position
Any legal person filing an application for compensation is required to show that s/he has suffered
some loss or damage as a result of any contravention of the provisions as laid in Chapter II of the
98
99
Proposition, ¶12, Line 2
100
101
Propostion,¶20, Line 3-4
Page | 41
Act by the abusive enterprise. In the instant case, the Appellant’s products were known to sell at
generally low prices due to their technological help;102 however, there was an extraordinary
increase of 105% in the price charged by the Appellant for its packaged milk which was
continued even after other milk suppliers reduced their prices.103 Such conduct, on the
Appellant’s behalf, in relation to the excessive pricing of its packaged milk has resulted in
pecuniary loss to RAM as well as to the consumers. It is submitted that RAM had made a public
announcement that it intended to seek compensation from the Appellant on behalf of all the dairy
retailers and consumers who paid the unfairly high price. Thus, it is submitted that RAM and the
consumers have suffered losses due to the abusive conduct of the Appellant.
In the instance where the retailers and consumers had been forced to pay excessive prices for
products from the manufacturer, they had suffered a legal injury. This “excessive price” was the
legal injury.104 It is unnecessary to determine whether the retailers had passed on the illegal
burden as the injury was complete the moment they paid the excessive price and also because
“(t)he general tendency of the law, in regard to damages at least, is not to go beyond the first
step” and to exonerate a defendant by reason of remote consequences. 105 When a buyer shows
that the price paid by him for materials purchased for use in his business is illegally high along
with the overcharge incurred, s/he has made out a prima facie case of injury and damage. 106 The
102
103
104
Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968)
105
Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533, 38 S.Ct. 186, 62
L.Ed. 451 (1918); Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968) at 830
106
Page | 42
buyer is equally entitled to damages even if he raises the price for his own product. 107 As long as
the seller continues to charge the illegal price, he takes from the buyer more than the law
allows.108 At whatever price the buyer sells, the price he pays the seller remains illegally high,
and his profits would be greater were his costs lower. 109 The possibility that retailers had
recouped the overcharges from their customers is held to be irrelevant in assessing damages.110
To enforce the antitrust laws, the legislative purpose is better served by holding direct purchasers
to be injured to the full extent of the overcharge paid by them than by attempting to apportion the
overcharge among all that may have absorbed a part of it.111 Additionally, even if it were easy to
establish that the overcharge was passed on to the consumers, that would not necessarily mean
that the plaintiff did not incur any injury as he may very well have faced a reduction in the
number of units he sells due to the price increase. 112 The antitrust laws would be more effectively
enforced by concentrating the full recovery for the overcharge in the direct purchasers rather than
by allowing every plaintiff potentially affected by the overcharge to sue only for the amount it
107
Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed.
241 (1906
108
109
Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed.
241 (1906
110
Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533, 38 S.Ct. 186 (1918);
Adams v. Mills, 286 U.S. 397, 406—408, 52 S.Ct. 589, 591—592, 76 L.Ed. 1184 (1932).
111
Hawaii v. Standard Oil Co. of California, 405 U. S. 251, 405 U. S. 262, Pp. 431 U. S. 745-
747; Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977)

112
Page | 43
could show was absorbed by it.113 A direct purchaser has “been injured in his business as
required by the law” even if he passes the “claimed illegal overcharge[s] to” his customers. 114
“Injury” is perceived to occur at the moment when the direct (or indirect, as the case may be)
pays the overcharge.115 Manufacturers may not use a pass-on theory to challenge the standing of
direct purchasers.116 § 4 of the Clayton Act does not “permit offensive use of a pass-on theory
against an alleged violator that could not use the same theory as a defense in an action by direct
purchasers.117 Where, although the charge has been passed on to the purchaser, domestic law
permits the trader to claim that the illegal levying of the charge has caused him damage which
excludes, in whole or in part, any unjust enrichment, it is for the national court to give such
effect to the claim as may be appropriate. 118 There is no reason to protect the perpetrator of a
serious competition law violation just because the surcharge may have been passed on.119
113
Illinois Brick, at 734-35.
114
Illinois Brick, 431 U.S. at 724
115
’Comments of the Max Planck Institute for Intellectual Property, Competition and Tax Law on
the White Paper by the Directorate General for Competition of April 2008 on Damages for
Breach of the EC Antitrust Rules’, Munich, 15 July 2008, 12.; Rules’, Munich, 15July 2008, 12.
http://ec.europa.eu/competition/antitrust/actionsdamages/white_paper_comments.html. (Last
accessed on 20th February, 2017 at 10.30 am)

116
Illinois Brick
117
Illinois Brick at 735
118
Joined cases C-192/95 to C-218/95 Sociétéomateb and others v Directeur général des douanes
et droits indirects [1997] ECR I-165, ¶22

119
Assimakis Komninos, EC Private Antitrust Enforcement (Hart Publishing, Oxford 2008) 200-
201.
Page | 44
In conclusion, it is submitted that all the conditions under §53N are fulfilled.
Therefore, the compensation claim should be granted.
iv. The Consumers Also Have A Claim In The Compensation
It is “open to any individual to claim damages for loss caused to him by a contract or by conduct
liable to restrict or distort competition”. 120 Indirect purchasers should not be left without
compensation for injuries actually sustained.121 Competition law must be read in the light of the
philosophy of the Constitution of India, which has concern for the consumers. In the instant case,
due to the Appellant’s increase in price of their milk products by 105%, the retailers bought the
same at such increased rates. That, along with the profit margin of the concerned retailer,
resulted in the consumers having to buy milk products at relatively unaffordable rates as a
consequence.
120
Case C-453/99 Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and others
[2001] ECR I-6297, ¶26.

121
Antitrust Modernization Commission, Report and Recommendations, 2 April 2007, 273
Page | 45
THE IMPOSITION AND QUANTUM OF PENALTY AS PER THE IMPUGNED CCB
ORDER AGAINST THE APPELLANT IS VALID IN LAW.
It is humbly submitted that the CCB has issued a ‘cease and desist’ order from charging unfair
prices in the sale of packaged milk along with the penalty of 10% of the appellant’s average
annual turnover for the last three years against the appellant.122
The power to pass ‘cease and desist’ order,
CCI can direct any enterprise to modify the unfair prices being charged and thus discontinue
such abuse of dominant position.123
The imposition of the ‘cease and desist’ order from charging unfair prices in the sale of packaged
milk is sustainable in law. Because, first
The power of the CCI to impose monetary penalty is derived from §27(b) of the Act, which
allows it to “impose such penalty, as it may deem fit which shall be not more than ten per cent of
the average of the turnover for the last three preceding financial years.
122
Moot Proposition, ¶20, Line 9-11
123
M/s HT Media Ltd. v. M/s Super Cassettes Industries Ltd., Case no.- 40/2011,
http://www.cci.gov.in/May2011/OrderOfCommission/27/C-2011-40.pdf (Last accessed on 19th February, 2017 at
2.48 am)
Page | 46
The CCB can impose heavy penalty when the abuse of dominant position is in respect of the
basic necessities like milk and elements and extent of abuse make it clear that the enterprise has
been grossly abusing its dominant and that too against a vulnerable section of nifty intraday chart
consumers, who have little ability to act or organize against such abuse. 124 An abuse of
dominance whether it is on one count or on many remains an abuse and therefore it must be dealt
with iron hands.125 As a dominant player in the market, it has a special duty to be within the four
corners of law.126 If the consumer is exploited by a mighty enterprise, then such mighty
enterprise cannot claim soft attitude from the State and refusal by COMPAT to bring down the
penalty is justified.127
An undertaking refusing to assist the commission in its work is also an aggravating
circumstance. It is submitted that instead of co-operating with the investigations before the DG,
the appellant resisted providing exact costing information which was required by the DG. In such
situation, it would be a misplaced sympathy to take any lenient view in the matter.128
124
DLF Park Place Residents Welfare Association v. DLF House Development Ltd
125
M/s DLF Limited v Competition Commission of India & Ors, Appeal No. 20 of 2011, 2014CompLR1(CompAT)
¶124
126
¶124
127
¶125
128
Reliance Big Entertainment Limited v. Tamil Nadu Film Exhibitors Association, [2013] CCI 90,
2013CompLR828(CCI), ¶46
Page | 47
The CCB can impose heavy penalty when the enterprise is found in contravention of the
provisions of section 4(2) (a) of the act for imposing unfair prices or conditions for sale of
commodities or services.129
Large companies with a great financial capacity to harm their competitors and the market in
general should be punished severely to ensure that the fine has an adequately deterrent effect.
Furthermore, larger companies usually have sufficient knowledge and competence to be able to
see the effect of their own actions, and to be familiar with the relevant legislation regulating
competition in the market. This larger amount of knowledge also results in a greater degree of
culpa, as the one who knowingly violates should be fined more strictly than the one who
ignorantly does the same. Considerations of undue sympathy will lead to miscarriage of
justice.130
129
M/s HT Media Ltd. v. M/s Super Cassettes Industries Ltd., Case no.- 40/2011,
http://www.cci.gov.in/May2011/OrderOfCommission/27/C-2011-40.pdf (Last accessed on 19th February, 2017 at
2.48 am) (8% of the average turnover of the last 3 financial years on super Cassettes Industries Limited for abusing
Dominant Position)
130
State of Karnataka v. Krishna, (1987) 1 SCC 538: AIR 1987 SC 861, ¶7.
Page | 48
PRAYER
Wherefore in light of the issues raised, arguments advanced and authorities cited, it is humbly
prayed that this Hon’ble Tribunal may be pleased to adjudge and declare that:
1.
And pass any order that this Hon’ble Court may deem fit in the interests of justice, equity and
good conscience.
ON BEHALF OF COMPETITION COMMISSION OF BOHEMIA, MOTHER CARE AND
CHILD CARE, RETAILER’S ASSOCIATION FOR MILK AND OTHERS,
COUNSEL FOR COMPETITION COMMISSION OF BOHEMIA, MOTHER CARE AND
CHILD CARE, RETAILER’S ASSOCIATION FOR MILK AND OTHERS.
Page | 49

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TEAM CODE: 004

(Under §53B of the Competition Act, 2002)

Dylon Nutricia …Appellant

Competition Commission of Bohemia …Respondent No. 1

Mother Care and Child Care …Respondent No. 2

Retailers Association for Milk …Respondent No. 3

Adiva Regina Cattle Feed Limited …Respondent No. 4

Brick Cattle Feed Limited …Respondent No. 5

Cautious Cattle Feed Limited …Respondent No. 6

Detro Cattle Feed Limited …Respondent No. 7

Application No. ______/2017

(Under §53N of the Competition Act, 2002)

Retailer’s Association for Milk …Applicant

Dylon Nutricia …Respondent

Memorandum filed on behalf of

Counsel appearing on behalf of

ISSUES FOR CONSIDERATION………………………………………………………..12

I. DYLON NUTRICIA HAS VIOLATED §4 OF THE COMPETITION ACT WITH

RESPECT TO THE SALE OF PACKAGED MILK AT UNFAIR PRICES……..19

A. DYLON IS AN ENTERPRISE UNDER §2(H) OF THE ACT……………….19

B. DYLON IS IN A POSITION OF DOMINANCE IN THE RELEVANT

i. MARKET FOR PROCESSING AND SUPPLY OF PACKAGED MILK IN

BOHEMIA IS THE RELEVANT MARKET………………………………..20

ii. DYLON IS DOMINANT IN THE IDENTIFIED RELEVANT

C. THE ACTIONS OF DYLON CONSTITUTE AN ABUSE OF DOMINANT

COMPETITION ACT BY THE FOUR CATTLE MANUFACTURERS IS CORRECT

A. THE ACTIONS OF CATTLE FEED MANUFACTURERS WAS AN ACT OF

CONSCIOUS PARALLELISM AND NOT AN ACT PURSUANT TO ANY ANTI-

B. ALTERNATIVELY, THE CATTLE FEED MANUFACTURERS ARE

INCAPABLE TO ENTER INTO ANY ANTI-COMPETITIVE AGREEMENT

UNDER SECTION 3 WITH REFERENCE TO THE DOCTRINE OF SINGLE

i. RAM IS A LEGAL PERSON UNDER §2(L) OF THE ACT…………………..40

ii. THE CLAIM HAS ARISEN OUT OF AN ORDER BY THE CCB……………41

iii. RAM HAS SUFFERED LOSSES AS A RESULT OF THE APPELLANT’S

ABUSE OF ITS DOMINANT POSITION………………………………………41

iv. THE CONSUMERS ALSO HAVE A CLAIM IN THE COMPENSATION……45

ORDER AGAINST THE APPELLANT IS VALID IN LAW……………………….46

1. Competition Act, 1998…………………………………………………………………19

2. Competition Act, 2002………………………………………………………………..19

3. Competition Commission of lndia (Determination of Cost of Production) Regulations,

Treaty on the Functioning of the European Union………………………………………….25

1. AEK Athens and Slavia Prague v. UFEA, CAS 98/200………………………………..37

2. AKZO Chemie BV v. Commission, 1991 ECR I-3359………………………………….25

4. Anglo American Corporation/ Lonrho [1998] OJ L145/21……………………………...37

5. Arla Foods/Milk Line, Case No. COMP/M.6611………………………………………..22

6. AstraZeneca AB v. Commission Case T-321/05 [2010] ECR II-000…………………...25

7. Bayer v. Commission Case T-41/96, General Court [2000] ECR-II-3303………………35

8. Belaire Owners , Case No. 19/2010

9. Bijay Poddar v. Coal India Ltd. Case No. 59/2013……………………………………...28

others [2001] ECR I-6297………………………………………………………………..45

L.Ed. 241 (1906)……………………………………………………………………..42, 43

16. France Telecom v. Commission Case T-340/03 [2007] ECR II-107……………..…21, 25

17. Friesland Foods/Campina, Case No. COMP/M.5046………………………….……21, 22

20. Hilti AG v Commission, [1988] OJ L65/19, [1989] 4 CMLR 677…………………….. 26

21. Hoffmann-La Roche & Co. AG v. Commission, 1979 ECR 461………..…………24, 25

22. Hules AG v. Commission Case C- 199/92P, Court of Justice [1999] ECR-I-

23. Hydrotherm v. Compact, [1984] ECR 2999…………………………………………….38

24. Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977)………………………………………43

douanes et droits indirects [1997] ECR I-165………………………………………..45

26. Lactalis/ Puleva, Case No. COMP/M.5875…………………………………………..21

30. Michelin v. Commission, [1983] ECR 3461 (ECJ)……………………………………..31

31. Microsoft Corporation v. Commission, Case T-201/04………………………………...25

CCI 90, 2013CompLR828(CCI)…………………………………………………………47