3 Tnnlu N M C C, 2020: Ational OOT Ourt Ompetition

TEAM CODE:
3RD TNNLU NATIONAL MOOT COURT COMPETITION,

2020
IN THE COMPETITION COMMISSION OF INDIA

CASE NO. 76/2018 & 1/2019
IN THE MATTER PERTAINING TO
CASE NO. 76 OF 2018
ACME PVT. LTD. …INFORMANT
V/S.
UMBRELLA PVT. LTD. & EPOC GAMING PVT. LTD. …OPPOSITE PARTY
clubbed with
CASE NO. 1 OF 2019
INDEPENDENT SERVICE OPERATIONS …INFORMANTS
V/S.
UBMRELLA PVT. LTD. & OTHERS …OPPOSITE PARTY
WRITTEN SUBMISSIONS ON BEHALF OF THE INFORMANT
i
3rd TNNLS- CCI NATIONAL MOOT COURT COMPETITION, 2020
TABLE OF CONTENT
INDEX OF AUTHORITIES
IV
STATEMENT OF JURISDICTION
IX
STATEMENT OF FACTS
X
ISSUES RAISED
XII
SUMMARY OF ARGUMENTS
XIII
ARGUMENTS ADVANCED
[ISSUE 1.] WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-
COMPETITIVE?
[1.A.] That the Agreement is an Exclusive Supply Agreement 1
[1.B.] That the Agreement is an Exclusive Distribution Agreement 3
[1.C.] That the Agreement Causes Refusal to Deal 3
[1.D] That the Agreement Causes Appreciable Adverse Effect on Competition 4
[ISSUE 2.] WHETHER THE CONSOLE MAKERS HAVE ABUSED THEIR DOMINANT POSITION
UNDER SECTION 4 OF THE ACT?
[2.A.] That home consoles forms a Relevant market

7
[2.B.] That Umbrella was in a dominant position

8
[2.C.] That Umbrella abused its dominant position 12
ii
MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[ISSUE 3.] WHETHER THE CONSOLE MAKERS HAVE ABUSED THEIR DOMINANT POSITION
[3.A] That Aftermarket Services Constitute a Separate Relevant Product Market 14
[3.B] That the Console Makers were Dominant in the Aftermarket

15
[3.C] That the Console Makers Abused Their Dominance
Under Section 4 of the Act

19
[3.D] That the Defence of Intellectual Property Right is Not Valid. 20
PRAYER FOR RELIEF

XIV
iii

INDEX OF AUTHORITIES
CASES
S. No. NAME OF THE CASE CITATION FOOTNOTE PAGE

NO. NO.
1. Amelo v NV EnergiebedrijfIjsselmij [1994] ECR I-1477 57 26
2. Asmi Metal Products (P.) Ltd. v. Case No. 72 / 2016 22 18
SKF India Ltd (Competition
Commission of
India)
3. Aspen Skiing Co. v. Aspen 427 U.S. 585 (1985) 73 30
Highlands Skiing Corp (Competition
Commission of
India)
4. Coal India Ltd. v. Competition [ 2017] 77 taxmann.com 23 20
Commission of 124 (CAT).
5. Eastman Kodak Co. v. Image Tech. 504 U.S. 451 (1992) 61 27
Servs., Inc.,
6. Explosive Manufacturers Welfare 2012 Comp LR 525 2 13
Association v. Coal India Limited & (CCI).
its Officers,
7. Fast Track Call Cab (P.) Ltd. v. ANI 6 & 74/2015 33 21
Technologies (P.) Ltd. (Competition
Commission of
India)
8. Fortner Enterprise, Inc. v. United 394 U.S. 495 (1969) 41 23
States Steel Corp.,
9. Fx Enterprise Solutions India Pvt. Case Nos. 36 & 82 7 13
Ltd v. M/s Hyundai Motor India of 2014
Limited (Competition
Commission of
India)
10. HT Media Ltd v. Super Cassettes Case No. 40/2011 27 19
Industries Ltd (Competition
Commission of
India)
11. Irish Sugar plc v Commission [1999] ECR II-2969 56 26
[46]
12. Jeetender Gupta v. BMW India Ltd Case No. 104/2013 31 20
(Competition
Commission of
India)
13. Kapoor Glass Private Limited vs Case No. 22/2010 28 19
Schott Glass India Private (Competition
Commission of
India)
iv
14. L. H. Hiranandani hospital v. (appeal no. 19/2014) 14 16

Competition Commission of India & COMPAT order
Ors.
15. Los Angeles Land Co. v. Brunswick 6 F.3d 1422 40 22
Corp
16. M/S Cine Prekshakula Viniyoga v. Case No. RTPE 5 13
Hindustan Coca Cola Beverages 16/2009
17. MCX Stock Exchange of India Ltd. Case No. 13/2009, 34 23
v National Stock Exchange of India (Competition
Ltd & others Commission of
India)
18. Meru Travels Solutions (P.) Ltd. v. Appeal No. 31 of 32 20
Competition Commission of India, 2016 (COMPAT)
New Delhi
19. Mr. Ramakant Kini and Dr. L.H. Case No. 39/2012 47, 54 25, 27
Hiranandani Hospital, Powai, (Competition
Mumbai Commission of
India)
20. NK Natural Foods (P.) Ltd. v. Case No. 74 of 2013 46 24
Akshaya (P.) Ltd. (Competition
Commission of
India)
21. Oscar Brooner v Media Print C-7/97 44 23
22. P, Compagnie Maritime Belge [2000] ECR I-1365 58 26
Transports SA v. Commission
23. Radio Telefilms Eireann (RTE) and ECR 1995 I-00743 79 31
Independent Television Publications
Ltd (ITP) v Commission of the
European Communities
24. Shamsher Kataria v. Honda Siel Case No. 6, 11, 63 13, 14,
Cars India Ltd. 03/2011(Competitio 28
n Commission of
India)
25. Shri Ghanshyam Dass Vij and M/s Case No. 68/2013 10, 12 14, 15
Bajaj Corp. Ltd. Mumbai & others (Competition
Commission of
India)
26. Surana And Surana v. Dell India (P.) Case No. 29/2015 25 19
Ltd. (Competition
Commission of
India)
27. Surrinder Brami v BCCI Case No. 61/2010 43 23
(Competition
Commission of
India)
28. Toyota Kirloskar v Competition Case No 60/2014 50, 67, 77, 83 26, 28,
Commission of India (Competition 31, 31
v

Commission of
India)
29. United Brands v. Commission (1978) ECR 207 17 17
30. United States v. Dentsply Intern., 190 F.R.D. 140 39 23
Inc.
31. United States v. Paramount Pictures, 334 U.S. 131 (1948) 65 28
Inc.
32. United States v. Pullman Co 50 F. Supp. 123, 137 66 28
33. Vijay Gopal v. Inox Leisure Ltd Case No. 4 12
29/2018(Competitio
n Commission of
India)
34. Vishal Pande v. Honda Motorcycle Case No. 17/2017 8 13
& Scooter India (P.) Ltd (Competition
Commission of
India)
35. Volvo AB v Erik Veng (UK) Ltd Case No. 238/87 80 31
(Competition
Commission of
India)
BOOKS
 1 SM DUGAR, COMMENTARY ON MRTP LAW COMPETITION LAW AND CONSUMER
PROTECTION LAW, (WADHWA AND COMPANY 2006)
 2 COMPETITION LAW IN INDIA, ABIR ROY AND JAYANT KUMAR, (EASTERN LAW
HOUSE)
 2 JONATHON FAULL AND ALI NIKPAY, THE EC LAW OF COMPETITION (OXFORD)
 4 ALISON JONES AND BRENDA SUFRIN (OXFORD)
 5 VAN BAEL & BELLIS, COMPETITION LAW OF THE EUROPEAN COMMUNITY ,
(COMPETITION LAW OF THE EUROPEAN COMMUNITY)
 6 ARIEL EZRACHI, EU COMPETITION LAW (HART PUBLICATIONS)
 6 COMPETITION LAW MANUAL (TAXMANN)
 9 RICHARD WHISH AND DAVID BAILEY, COMPETITION LAW (OXFORD 2018)
 BURHAN MAJID, COMPETITION LAW IN INDIA
 GARY MIDDLETON AND BARRY J. RODGER, CASES AND MATERIAL ON UK AND EC
COMPETITION LAW.
 KK SHARMA, GUIDE TO COMPETITION LAW.
 RICHARD WHISH, COMPETITION LAW (OXFORD)
vi

 SANDRA MARCO COLINO, VERTICAL AGREEMENT AND COMPETITION LAW (HART

PUBLISHING)
 T RAMAPPA, COMPETITION LAW IN INDIA: POLICY, ISSUES, AND DEVELOPMENT
(OXFORD 2006)
STATUTES
 THE COMPETITION ACT, 2002

 MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969
 TREATY ON THE FUNCTIONING OF EUROPEAN UNION, 1958
 SHERMAN ACT OF 1890
 CLAYTON ACT OF 1914
OTHER SOURCES
 EUROPEAN UNION,
http://europa.eu/documents/comm/green_papers/pdf/com96_721_en.pdf, (last visited
January 8, 2020).
 EUROPEAN COMMISSION,
http://ec.europa.eu/competition/state_aid/legislation/block.html (last visited on
January 9,2020).
 R. Preston McAfee, Hugo M. Mialon, and Michael A. Williams, Economic and
Antitrust Barriers to Entry, 94 THE AMERICAN ECONOMIC REVIEW
 Friedrich Kessler, Richard H. Stern, Competition, Contract, and Vertical Integration,
69 THE YALE LAW JOURNAL.
 Michael H. Riordan, Competitive Effects of Vertical Integration, DISCUSSION
PAPER NO.: 0506-11.
 Yen-Ting Lin, Ali K. Parlakturk, Jayashankar M. Swaminathan, Vertical Integration
under Competition: Forward, Backward, or No Integration? 23 PRODUCTION AND
OPERATIONS MANAGEMENT SOCIETY.
 Treaty on the Functioning of the European Union Art. 102, 2008 O.J. C 115/47,
vii

 Commission Notice on The Definition Of Relevant Market For The Purposes Of

Community Competition Law, OJEC, [C372/5], [C372/6], (1997), https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31997Y1209(01)&from=EN.
 European Commission, Competition discussion paper on the application of Article 82
of the Treaty to exclusionary abuses.
viii

STATEMENT OF JURISDICTION
The Informants in both the cases have approached Competition Commission of Imarti under
§19(1)(a) of the Competition Act,2002.
The Commission ordered the DG to investigate under §26(1) of the Act read with Regulation
18 of the Competition Commission of India (General) Regulations, 2009.
The information in both cases has been consolidated and taken up together as per Regulation
27 of the Regulations.
ix

STATEMENT OF FACTS
BACKGROUND
[¶. 1] Gaming is a nascent industry in Imarti. In the early 1980’s gaming has been restricted
to the personal computer (PC). Epoc games private limited, (Epoc) incorporated in Imarti in
1984, is a game developer (developer). Epoc believes in ‘open source development’, where it
releases a limited source code of all the games it creates to the public.
[¶. 2] Umbrella private limited (Umbrella) is one of the first companies in Imarti to be
incorporated to develop consoles in 1998. Umbrella manufactures all the parts for the console
itself. However, Umbrella does not have the expertise to design its own games. It, therefore,
reaches out to Epoc in January 1999, the developer with the best reputation in the market and
the fastest development process - to create a new game for its console exclusively. Epoc,
ready to enter the console market, creates a game ‘mountain run’ which it grants an exclusive
license of to Umbrella in an agreement.
[¶. 3] A significant factor in Gamecast’s success was also Umbrella’s repair service strategy.
Umbrella decided to make its technical know-how, component parts and diagnostic tools
freely available in the market. This led to a large number of software engineers within Imarti
to set up independent service operations (ISOs) thus keeping repairs and services accessible
at very low costs for consumers. Companies that launched new consoles followed the same
service strategy as Umbrella. This led to a strong service market for ISOs. Over time ISOs
expanded their businesses to sell add-ons for consoles - headsets, controllers and games
bought directly from developers.
[¶. 4] The console market has proved to be very dynamic and time sensitive, with companies
constantly having to innovate new proprietary formats to set their consoles apart, and bring
new versions of their exclusive flagship games in order to retain their market shares.
Acme private limited (Acme) is a new company incorporated in Imarti in 2008 to
manufacture
consoles. Instead of developing new games, acme chose to curate vintage video games in
order to capitalise on their charm. Acme, therefore, approaches Epoc to create a high
quality version of their games Prince of Arabia and road rush over which acme would hold an
exclusive license for its console. By April 2015, Umbrella is designing a new generation
console, one with a completely new software, hardware and user experience. Umbrella
x

decides to exert intense control over the compatibility of games with its console, sharing of
proprietary information, and servicing.
AGREEMENT WITH EPOC
[¶. 5] A. Development: Umbrella and Epoc shall share all relevant proprietary information
regarding new technologies including but not limited to (i) product proposals (ii) game
designs and development (iii) game software (iv)software development tools and hardware
(v) business and marketing strategies, and be closely involved in development of the sequel
to mountain run and other games to ensure optimum compatibility.
B. Revenue sharing: Umbrella shall agree to a revenue sharing ratio where Epoc may
negotiate rate higher than the standard market revenue share for developers.
C. Exclusivity regarding development and sale of video games for consoles:

(i) during the term of the agreement, Epoc shall have an exclusive relationship with Umbrella
regarding the development and licensing of any video games in Imarti.
(ii) during the term of the agreement, Umbrella will exclusively only carry and market games
developed by Epoc.
D. Intellectual property: Epoc shall be the owner the relevant intellectual property
with respect to games developed by it, but shall not release any further part of the source code
of mountain run or any other game developed during the subsistence of this agreement.
CONFLICT WITH ISOS
[¶. 6] Umbrella changed its service model and established several Umbrella authorised repair
centres, offering to maintain not only the GCX but also previously released consoles. As
quality control, Umbrella also places a seal of quality on all its licensed game and accessories
with an official “Umbrella Seal of Approval”.
[¶. 7] Umbrella issued licenses to ISOs to become authorised service centres on the condition
that they only service Umbrella consoles and offer Epoc games for sale. It otherwise does not
make any of its information for servicing freely available.
[¶. 8] 1Acme’s attempts to release a new console that rivals the GCX have failed. While
acme’s new console Playbox2 is a powerful system, its new game ‘King of Alibaba’ designed
by another developer has bombed. A drop in its sales and consumer base has also impacted
Acme’s ability to conclude exclusivity agreements with other developers. Meanwhile, ISOs
xi

are quickly losing business because GCX’s success in the market has instigated a pattern
among all console manufacturers to announce a ‘seal of approval’ on their parts and set up
authorised service centres.
ISSUES RAISED
~ISSUE 1~
WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-COMPETITIVE?
~ISSUE 2~
WHETHER UMBRELLA ABUSED ITS DOMINANT POSITION IN THE MARKET ?
~ISSUE 3~
WHETHER THE CONSOLE MAKERS HAVE ABUSED THEIR DOMINANT POSITION UNDER
SECTION 4 OF THE ACT?
xii

SUMMARY OF ARGUMENTS
ISSUE 1. WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-

COMPETITIVE?
The agreement between Umbrella and Epoc is anti-competitive because it contains an

exclusive supply clause, exclusive distribution clause and it causes refusal to deal. It is
submitted that the clause that stipulates that Epoc will not deal with any other Manufacturer
and the clause that stipulates that Umbrella will exclusively carry and market games
developed by Epoc are anti-competitive. It is contended that the agreement is anti-
competitive as it causes adverse effect on the competition by foreclosure of competition and
by driving existing competitors out of the market.
ISSUE 2. WHETHER UMBRELLA ABUSED ITS DOMINANT POSITION IN THE HOME CONSOLE
MARKET?
It is submitted that home consoles form a relevant market. In this market Umbrella was a
dominant entity. It had the highest market share among its competitors. Umbrella was also
heavily vertically integrated and created technical entry barrier for the competitors by
restricting distribution of video games developed by Epoc. Umbrella also had commercial
advantage over its competitors because of which it was able to pay higher revenue share than
its competitors. Umbrella abused its dominant position by denial of market. This was done by
restricting access to video games developed by Epoc and Epoc’s expertise.
ISSUE 3. WHETHER THE CONSOLE MAKERS HAVE ABUSED THEIR DOMINANT POSITION
It is submitted that aftermarket for home consoles formed a relevant market. In this market,
console manufacturers had become collectively dominant through Authorised Service
Centres. They were also dominant as they created entry barriers for the competing
Independent Service Providers by denying access to proprietary information necessary for
providing service. They began to licence exclusive dealerships and stopped supply of
information. There was also high level of vertical integration as the console manufacturers
consolidated their operations. The console manufacturers abused this dominance by denying
market access to the independent service Operators. It is also submitted that the defence of
Intellectual Property Rights taken by the manufacturers is not valid because Competition Act
xiii

supersedes other legislations and because only reasonable restrictions could be placed for the
protection of IPR.
xiv

ARGUMENTS ADVANCED
[ISSUE 1.] WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-
COMPETITIVE
[¶.1] Yes. Section 3(1) of the Act read with section 3(2) of The Competition Act 2002,
provides that any agreement which causes or is likely to cause appreciable adverse effect on
competition1 is an anti-competitive agreement and shall be void. Section 3(4) of the Act
provides that any agreement amongst persons or enterprises at different levels of the
production chain including agreements in the nature of (a) exclusive supply (b) exclusive
distribution and (c) refusal to deal, shall be in contravention of Section 3(1) of the Act if they
cause or are likely to cause AAEC.
[¶.2] Section 19(3) of the Act gives due regard to the following while determining the
presence of AAEC in any agreement viz., creation of barriers to new entrants in the market,
driving existing competitors out of the market, foreclosure of competition by hindering entry
into the market. In the present case, the agreement between Epoc and Umbrella is
anticompetitive because: [1.A] The agreement contains an Exclusive Supply Agreement [1.B]
The agreement contains an Exclusive Distribution Agreement [1.C] The agreement causes
Refusal to deal [1.D] The collective effect of these factors leads a strong agreement causes or
likely to cause AAEC.
[1.A] THAT THE AGREEMENT IS AN EXCLUSIVE SUPPLY AGREEMENT
[¶.3] The explanation to Section 3(4)(b) of the Act defines an exclusive supply agreement as
any agreement restricting in any manner the purchaser in the course of his trade from
acquiring or otherwise dealing in any goods other than those of the seller or any other person.
The above definition is inclusive in nature and that a wide meaning has to be given to its
provisions.2 The main element of the Exclusive supply hence, is that the supplier is induced
or obliged to sell the contacted products, for a general or particular use, mainly or exclusively
to one buyer3. When the supplier holds significant market, power enters into exclusive supply
agreements with the purchaser to create barriers to entry for other suppliers can be seen as
exclusive supply agreement4. Any such exclusive agreement which restricts the purchaser
1
Hereinafter “AAEC”.
2
Explosive Manufacturers Welfare Association v. Coal India Limited & its Officers, 2012 Comp LR 525 (CCI).
3
VAN BAEL & BELLIS, COMPETITION LAW OF THE EUROPEAN COMMUNITY, 169 – 340, (Competition Law of the
European Community (Fifth Edition) 2019), 5th edition.
4
Vijay Gopal v. Inox Leisure Ltd, Case No. 29/2018 (Competition Commission of India).
from buying or procuring any goods or services for any other supplier is an anti-competitive
agreement, limiting the source of supply of goods and hence and thereby limiting the
competition5.
[¶.4] In the case of Shamsher Kataria v. Hyundai6, most of the OEMs and the authorized
dealers had clauses in their agreements requiring the authorized dealers to source spare parts
only from the OEMs and their authorized vendors. CCI after reviewing the investigation of
Director General concluded that such agreements were in the nature of exclusive supply
agreements in terms of section 3(4)(b) of the Act.
[¶.5] In Hyundai motor case7 , the existing dealership agreements of Hyundai prohibited the
dealers to source spare parts requirements from any source other than its approved vendors,
resulting in such dealers being forced to source Hyundai line Products only through the
official vendors. The Commission was of prima facie opinion that such agreements between
Hyundai and its dealers are in the nature of exclusive supply agreement in violation of the
provisions of section 3(4)(b) of the Competition Act.
[¶.6] In the case of Vishal Pande v. Honda Motorcycle & Scooter India (P.) Ltd8, the
informant had to adhere to the exclusive supply agreement as a condition of dealership. The
clause also included refusal to deal where the informant was restricted by the OP to deal with
any other competing product without the prior approval of the OP. It was held that where
there is a de facto exclusivity, such a clause is faulted and hence an exclusive supply
agreement.
[¶.7] In the instant case, the clause C of the agreement between Umbrella and Epoc states
that Umbrella will exclusively only carry and market games developed by Epoc 9, makes the
agreement an exclusive supply agreement. Here the contracted product is the games
developed by Epoc which is acquired by console manufacturer through licensing. This
agreement has restricted Umbrella from licensing games from other developer and hence put
this agreement under the purview of exclusive supply agreement.
5
M/S Cine Prekshakula Viniyoga v. Hindustan Coca Cola Beverages, Case No. RTPE 16/2009 (Competition
Commission of India).
6
Shamsher Kataria v. Honda Siel Cars India Ltd., Case No. 03/2011 (Competition Commission of India).
7
M/s Fx Enterprise Solutions India Pvt. Ltd v. M/s Hyundai Motor India Limited, Case Nos. 36 & 82/2014
(Competition Commission of India).
8
Vishal Pande v. Honda Motorcycle & Scooter India (P.) Ltd, Case No. 17/2017 (Competition Commission of
India).
9
Moot proposition ¶16.
2

[¶.8] Therefore, it is humbly pleaded before the commission that the agreement contains an
Exclusive Supply Agreement.
[1.B] THAT THE AGREEMENT IS AN EXCLUSIVE DISTRIBUTION AGREEMENT
[¶. 9] The explanation to Section 3(4) (c) of the Act defines “exclusive distribution
agreement” as any agreement to limit, restrict or withhold the output or supply of any goods
or allocate any area or market for the disposal or sale of the goods. Explanation (c) to
section 3(4) of the Competition Act defines exclusive distribution agreement. It has been
defined to include any agreement to limit, restrict or withhold the output or supply of any
goods or allocate any area or market for the disposal or sale of the goods
10
[¶. 10] In Shri Ghanshyam Dass Vij and M/s Bajaj Corp. Ltd. Mumbai & others , CCI
observed that exclusive distribution agreement means an arrangement between the supplier
and distributor wherein the distributor sells the product/s within a defined area or to a
particular group/category of customers. Such arrangements particularly affect intra-brand
competition as they restrict entry of another player into the market. It may also affect the
inter-brand competition since the outlets of distribution are limited thereby impeding
competition amongst players engaged in several similar services.
[¶. 11] In the agreement between Epoc and Umbrella, the clause stating that Epoc shall have
an exclusive relationship with Umbrella regarding development and licensing of any video
games in Imarti. Here, this agreement has restricted Epoc from developing games for other
console manufacturer thus restricting the output of the game development to itself only.
Therefore, this agreement comes in the ambit of exclusive supply agreement.
[¶. 12] Therefore, it is humbly pleaded before the Commission that the agreement contains an
exclusive supply agreement.
[1.C] THAT THE AGREEMENT CAUSES REFUSAL TO DEAL
[¶. 13] The explanation to section 3(4) (d) of the Act defines refusal to deal. It has been
defined to include any agreement which restricts, or is likely to restrict, by any method the
persons or classes of persons to whom goods are sold or from whom goods are bought. It
10
Shri Ghanshyam Dass Vij and M/s Bajaj Corp. Ltd. Mumbai & others, Case No. 68/2013 (Competition
Commission of India), hereinafter “Bajaj”.
3

must be noted that refusal to deal has mostly been dealt under an abuse of dominance
investigation.
[¶. 14] In Shamsher Kataria11, the agreements between the OEMs and their dealers
specifically restricted the sale of spare parts over the counter which were in the nature of
exclusive distribution agreements in terms of section 3(4)(c) of the Competition Act. Further,
such practices also amounted to refusal to deal under the terms of section 3(4)(d) of the
Competition Act.
[¶. 15] Again, in the Bajaj case12, the CCI noted that competition law issues with respect to
refusal to deal/supply will arise when an enterprise, generally with stronger market power
refuses to deal with its customers or suppliers. The effect in such scenario is that the
downstream market gets affected due to such refusal.
[¶. 16] In the Instant case, the agreement, on the one hand has restricted the Epoc from
developing and Licensing games for other manufacturer other than Umbrella. Therefore
Epoc, which has best market reputation and has fastest development process 13 , thus giving it
strong market power has refused to deal with other console manufacturers who were till now
using its service for development of game because of this agreement. On the other hand,
restricted Umbrella from marketing or carrying out games developed by other developer.
Umbrella which has largest market share in the gaming console market, and provides better
gaming experience than other console makers holds strong position in market, will refuse to
deal with any other developer for marketing of games because of this agreement. Therefore,
this agreement falls within ambit of refusal to deal.
[¶. 17] Therefore, it is humbly pleaded before the Commission that the Agreement caused
refusal to deal.
[1.D] THAT THE AGREEMENT CAUSES APPRECIABLE ADVERSE EFFECT ON COMPETITION
[¶. 18] Section 3(1) of the Act provides that any agreement which causes or is likely to cause
Appreciable Adverse Effect on Competition is void in nature. Section 3(4) of the Act
provides that any agreement amongst persons or enterprises at different levels of the
production chain including agreements in the nature of (a) exclusive supply shall be in
11
Supra note at 6.
12
Supra note at 10.
13
Moot Proposition ¶6.
4

contravention of Section 3(1) of the Act if they cause or are likely to cause AAEC. Sec 19(3)
of the Act provide that while determining whether an agreement has an appreciable adverse
effect on competition under Section 3, have due regard to all or any of the following
factors, namely: — creation of barriers to new entrants in the market; driving existing
competitors out of the market; foreclosure of competition by hindering entry into the market.
[¶. 19] In Dr LH Hiranandani Hospital Case14 that section 3(1) prohibits any agreement in
respect of provision of services which causes or is likely to cause an appreciable adverse
effect on competition within India and therefore the ambit of section 3 is extremely wide and
covers all kinds of commercial agreements even if they do not fall in the category of section 3
(3)and section 3 (4) further the CCI in this case held that the exclusive agreement Entered
into between Dr LH Hiranandani Hospital and Cryobanks International India is a violation of
section 3 because it causes AAEC . It was held that such exclusive agreement was anti-
competitive and even though LH Hiranandani Hospital was not dominant in the relevant
market
[¶. 20] In this case it is contended that the agreement of exclusivity between Epoc and
Umbrella causes or is likely to cause AAEC because [D.1] it has led to the foreclosure of
competition by hindering entry into the market. [D.2] it is driving existing competitors out of
the market
[D.1] THAT THE AGREEMENT HAS FORECLOSED COMPETITION
[¶. 21] Section 19(3)(c) makes foreclosure of competition as a factor of AAEC in the market.
In the instant case, the agreement has restricted Epoc from developing and licencing games
for any other console maker in the market. By foreclosure is meant that actual or potential
competitors are completely or partially denied profitable access to a market. Foreclosure may
discourage entry or expansion of rivals or encourage their exit. Foreclosure thus can be found
even if the foreclosed rivals are not forced to exit the market: it is sufficient that the rivals are
disadvantaged and consequently led to compete less aggressively.
[¶. 22] If a given vertical restraint is introduced to solve coordination problems along with
another that restricts competition, there would not be any compensatory effect and an
14
Dr. L. H. Hiranandani hospital v. Competition Commission of India & Ors., (appeal no. 19/2014) COMPAT
order.
5

improvement from the view of competition would not be noticed. 15 In the instant case, the
anti-competitive effect of the agreement has multiplied due to the many anti-competitive
clauses. Entry barriers have been created making foreclosure of market likely. When multiple
vertical restraints exist, a combined assessment may lead to the conclusion that their
collective existence enhances the anti-competitive effect of each individual restraint.16
[¶. 23] The widest definition suggests that barriers to entry arise from product differentiation,
absolute cost advantages of incumbents, and economies of scale. Product differentiation
creates advantages for incumbents because entrants must overcome the accumulated brand
loyalty of existing products. As has been held in the United Brands17, product differentiation
acts as a barrier to entry. By introducing the spare parts with the stamp of authenticity, the
product differentiation has been created.18
[¶. 24] The exclusive supply clause creates barriers to new entrants in the aftermarket. The
exclusive distribution agreement has made entry into the aftermarket undesirable and has
made foreclosure of the same likely.
[D.2] THAT THE AGREEMENT IS DRIVING EXISTING COMPETITORS OUT OF

COMPETITION
[¶. 25] Section 19(3)(b) makes driving existing competitors out of business as a factor of
AAEC in the market. In the instant case, Umbrella’s agreement had a detrimental effect on
the market. Epoc had been supplying games to many console manufacturers in the market.
The exclusivity agreement makes other manufacturers unable to 1) Licence new games from
Epoc and 2) Maintain and update games already licenced from Epoc.
[¶. 26] Epoc is the oldest and most reputed game developer in the market. It has also
produced many games that have been licensed to Console Manufacturers. These games form
an important selling point for Gaming Consoles. The exclusivity agreement ensures that Epoc
is not able to develop games for any other Console Maker for the next six years. It also
ensures that Epoc does not update and maintain games that have been already licensed. Acme
15
EUROPEAN UNION, http://europa.eu/documents/comm/green_papers/pdf/com96_721_en.pdf, (last visited
January 8, 2020).
16
EUROPEAN COMMISSION, http://ec.europa.eu/competition/state_aid/legislation/block.html (last visited on
January 9,2020).
17
United Brands v. Commission, (1978) ECR 207.
18
R. Preston McAfee, Hugo M. Mialon, and Michael A. Williams, Economic and Antitrust Barriers to Entry, 94
THE AMERICAN ECONOMIC REVIEW, 482 2004, www.jstor.org/stable/3592928.
6

had a game licenced from Epoc that Epoc refused to update due to the agreement. Because of
this refusal, Acme suffered huge loss. The loss in popularity affected other Manufacturers
also. The loss in consumer base has made signing exclusivity agreements with other
developers hard for Manufacturers.
[¶. 27] Therefore, it is humbly submitted before the Commission that the agreement causes
AAEC by foreclosing the competition and driving out the existing competitors from the
market.
[ISSUE 2.] WHETHER UMBRELLA ABUSED ITS DOMINANT POSITION IN THE

MARKET
[¶. 28] Yes. Umbrella was decisive one of the oldest companies to be incorporated for
manufacturing gaming consoles in Imarti 19. Umbrella’s position vis-à-vis other console
manufacturers was strong and highly pervasive throughout the market as could be clearly
seen from the 2008 data where Umbrella held humongous 35% of the market share which is
more than double the share of Nimoy Pvt. Ltd 20. Which stands second at 16.1%. Even after
the constitution and success of Acme, Umbrella still had a market share of 30.5% which still
was a highly considerable share of the market 21. For the purposes of examining the
allegations of the Informant under the provisions of section 4, it is necessary to first of all
determine the relevant market. Thereafter, it is required to be assured whether the OP enjoys
a position of strength that enables it to operate independently of the market forces in the
relevant market. Only when such a position is established to be enjoyed by the opposite party,
it is imperative to examine whether the impugned conduct amounts to an abuse22.
[2.A] THAT HOME CONSOLES THE RELEVANT MARKET
[¶. 29] The finding of dominance in the relevant market is a necessary precondition before
applying section 4.23 It is submitted that Sale of Gaming Consoles is a relevant product
market. The Console Manufacturers constitute the primary market. Gaming consoles are
19
20
Moot proposition Table 2.
21
Moot proposition Table 3.
22
Asmi Metal Products (P.) Ltd. v. SKF India Ltd Case No. 72 / 2016 (Competition Commission of India).
23
Coal India Ltd. v. Competition Commission of India [ 2017] 77 taxmann.com 124 (CAT).
7

specialized desktops used to play video games on. They form the hardware of the gaming
consoles.
[¶. 30] In Europemballage Corporation and Continental Can Company Inc. v Commission 24
the approach taken by the Court while determining the characteristics and the end-use of the
product is the assessment that whether the products are potential for satisfying the inelastic
need of the consumer. The is examined whether the product in question is different from
other products to the extent that there is only a small degree of interchangeability is possible
with the other products. As gaming consoles is distinct in its end-use and no other product
can substitute the same, the physical characteristics and the end-use of the goods in the
present case are distinct and cannot be substituted. Because of non-substitutability of gaming
consoles, it constitutes a relevant product market25. Further, the producers of consoles like
Umbrella are specialized producers of the home consoles which produce all the parts of the
console themselves26.
[¶. 31] Therefore, it is humbly pleaded before the Commission that the gaming consoles
constitute a separate relevant product market for Umbrella.
[2.B] THAT UMBRELLA WAS IN A DOMINANT POSITION
[¶. 32] Section 4(1) of the Act incorporates the spirit of Competition Act, 2002 by
enumerating that no enterprise or group shall abuse its dominance. The Act defines ‘dominant
position’ in the Explanation as a position of strength, enjoyed by an enterprise, in the relevant
market, in India, which enables it to (i) operate independently of competitive forces
prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant
market in its favor.
[¶. 33] ‘The position of strength’ is a rational consideration of relevant facts, holistic
interpretation of statistics or information and application of several aspects of the Indian
economy27. In Kapoor Glass case28, the commission stated “that independence in context of
dominance does not mean absence of other player in a relevant market, but that the
24
Europemballage Corporation and Continental Can Company Inc. v Commission [1973] ECR 215.
25
Surana And Surana v. Dell India (P.) Ltd. Case No. 29/2015 (Competition Commission of India)
26
27
HT Media Ltd v. Super Cassettes Industries Ltd. Case No. 40/011 (Competition Commission of India)
28
Kapoor Glass Private Limited vs Schott Glass India Private Case No. 22/2010 (Competition Commission of
India).
8

enterprise whose dominance is being ascertained has market power and is in apposition to
influence competitive forces to its own advantage and to the detriment of others. The Act,
therefore, does not prescribe any structural definition of dominance in terms of a defined
threshold of market share alone. What is required, instead is to give due regards to the other
factors in addition to market share as mentioned in section 19(4) of the Act in order to asses
or test whether an enterprise is in a position to operate independent of competitive forces or
can affect its competitors or consumers in its favor in a relevant market”.
[¶. 34] The findings of the DG report were based on the number of console manufacturers
present in the market due to which it was concluded that Umbrella cannot be said to be in a
dominant position29. Such a conclusion was wrongful and defective as it did not take into
consideration other factors, all or any, provided by Section 19(4) for the consideration of the
enquiry of dominant position of the enterprise in the market viz., (a) market share of the
enterprise; (d) economic power of the enterprise including commercial advantages over
competitors; (e) vertical integration of the enterprises or sale or service network of such
enterprises (h) entry barriers including barriers such as regulatory barriers, financial risk,
high capital cost of entry, marketing entry barriers, technical entry barriers, economies of
scale, high cost of substitutable goods or service for consumers
[¶. 35] Umbrella is in a dominant position which can be affirmed on the basis of: [B.1] The
opposite party cannot take the defense of non-dominant market share under Section 19(4)(a)
[B.2] There existed a case vertical integration under Section 19(4)(e) [B.3] Agreement
created an entry barrier under Section 19(4)(h) [B.4] economic power of the enterprise
including commercial advantages over competitors
[B.1] THAT UMBRELLA OWNS A SIGNIFICANT MARKET SHARE
[¶. 36] Market share of Umbrella as of 2015 is 30.5%, followed by that of Acme at 24.5%.
Such a market share even though isn’t prima facie the declarative of dominant position as the
current act does not specify any threshold market share for dominance ( however in the
MRTP act, the precursor of the current act , provided that market share above 25 % was
considered to dominant or a substantiate market share 30) but relative position of Umbrella
suggests that as the other competitors have a significantly smaller market share for such an
29
30
Monopolies and Restrictive Trade Practice Act, 1969, § 2(d)(iii), No. 13, Acts of Parliament, 2003, (India).
9

influence to be avoided. The Commission in an earlier case concluded that for a company to
be dominant in a relevant market, it should have substantial market power and should be able
to hold on to that market power for a reasonable period of time31.
[¶. 37] It is also imperative to look at the provisions of Explanation to Section 4 of the Act. It
states that dominant position means a ‘position of strength’. It does not say that the position
of strength shall necessarily be determined on the basis market share in statistical terms. Sub-
clause (i) and (ii) of Explanation 1 read with Section 19(4) provides that while examining the
dominance, we aren’t constrained to consider the market share of the enterprise but we will
have to look at other sub-clause of section 19(4)32.
[¶. 38] Moreover, market share is but one of the indicators enshrined in section 19(4) for
assessing dominance, and the same cannot be seen in isolation to give a conclusive finding.33.
[¶. 39] In the National stock exchange case,34 following the same jurisprudence that market
share is not a decisive factor it was held that NSE dominant in the market in spite of the fact
that its market share was lesser than the MCX.
[¶. 40] Therefore, it is humbly submitted before the Commission that the defendants cannot
take the defence that Umbrella doesn’t have the dominant market share.
[B.2] THAT THERE WAS HIGH LEVEL OF VERTICAL INTEGRATION
[¶. 41] Section 19(4)(e) provides for vertical integration of enterprises or sale or sale network
of enterprises to be a factor to be taken into account while determining the dominant position
of an enterprise35 . Vertical integration is defined as a situation where two or more successive
stages of production or distribution are taken under one common control 36. It is further
understood as the organization of successive stages of production undertaken by a single
31
Jeetender Gupta v. BMW India Ltd, Case No. 104/2013 (Competition Commission of India).
32
Meru Travels Solutions (P.) Ltd. v. Competition Commission of India, Appeal No. 31 of 2016 (COMPAT).
33
Fast Track Call Cab (P.) Ltd. & Meru Travels Solutions (P.) Ltd v. ANI Technologies (P.) Ltd., 6 & 74/2015
34
MCX Stock Exchange of India Ltd. v National Stock Exchange of India Ltd & others Case No. 13/2009,
35
Competition Act, 2002, § 19(4)(e), No. 13 Act of Parliament, 2003, (India).
36
Friedrich Kessler, Richard H. Stern, Competition, Contract, and Vertical Integration, 69 THE YALE LAW
JOURNAL 1, 1 (1959).
10

firm. A firm can be understood as the collective and integrated ownership of production
assets37.
[¶. 42] In the instant case, Umbrella entered an agreement with Epoc for the development and
sharing of all propriety information including but not limited to game designing,
development, software, software development tools and hardware along with the business
and marketing strategy. The first stage here is the development of gaming software and
design which is undertaken by Epoch. The second stage is the manufacturing of gaming
consoles undertaken by Umbrella. By such an exclusive agreement where Epoch will
exclusively make games for Umbrella consoles, Umbrella undertakes vertical integration
agreement in the relevant product market with Epoch. This type of vertical integration where
an enterprise takes over the primary stage of production, generally the raw material, shifting
its spectrum to the supply side is called the backward vertical integration38 .
[B.3] THAT UMBRELLA HAS CREATED ENTRY BARRIERS
[¶. 43] Barriers to entry are specific feature of market, which give incumbent firms
advantages over potential competitors. An incumbent firm may limit and entrant’s firm
ability to obtain necessary supplies or access to necessary distribution by of exclusive
agreement. In the case of United states v Dentsply Int’l39, the court reasoned that exclusive
dealing contract has created entry barriers and thus giving dominant position to the
incumbent enterprise.
[¶. 44] In the case of Los Angeles Land Co. v. Brunswick Corp 40 ,the court was of the opinion
that having control over a superior resource is an source of entry barrier, hence where an
enterprise is having control over superior resource it can be said dominant in the market
because of its ability to create entry barrier by restricting that superior resource.
[¶. 45] In the instant case, Umbrella by the way of an exclusive dealing contract with Epoc
has restricted Epoc from developing games for other gaming console manufacturer. Here
these games are the resources which is used by these console manufacturers, and the games
37
Michael H. Riordan, Competitive Effects of Vertical Integration, DISCUSSION PAPER NO.: 0506-11 1, 4
(2005).
38
Yen-Ting Lin, Ali K. Parlakturk, Jayashankar M. Swaminathan, Vertical Integration under Competition:
Forward, Backward, or No Integration? 23 PRODUCTION AND OPERATIONS MANAGEMENT SOCIETY
19, 19 (2014).
39
United States v. Dentsply Intern., Inc., 190 F.R.D. 140.
40
Los Angeles Land Co. v. Brunswick Corp., 6 F.R.D. 1422.
11

developed by the Epoc are considered to be the superior resource owing to the reputation and
technological aspect of it. Hence Umbrella by restricting Epoc to develop games for other
console manufacturer has created a barrier for the new entrants in the market.
[B.4] THAT UMBRELLA ENJOYED SUPERIOR ECONOMIC POWER

INCLUDING COMMERCIAL ADVANTAGES OVER COMPETITORS
[¶. 46] Umbrella in this market is having a significant economic power which it has clearly
used to get an edge over its competitors. When Umbrella felt that presence of Acme in
market may give tough competition. Umbrella went to Epoc, the most prominent and reputed
game developer, whose games were foremost part of the survival of most of the console
manufacturer, including Acme. There Umbrella proposed an agreement of exclusivity, here to
induce Epoc into the agreement, Umbrella offered a revenue rate higher than the market share
of other developer, thus Epoc agreed for the same. This has provided Umbrella with
exclusive right over Epoc for development of game at the exclusion of others.
[¶. 47] In Fortner Enterprises, Inc. v. United States Steel Corp 41, it was found that one could
infer the requisite economic power from particularly advantageous terms and prices. Hence, it
can be inferred that advantageous terms and prices involved in this trade deal clearly shows
that the Umbrella has significant economic power which provided a commercial advantage
over other competitors.
[¶. 48] Therefore, it is humbly submitted before the Commission that Umbrella has a
dominant position in the market taking into account the cumulative effect of the
abovementioned factors under Section 19(4) of the Act.
[2.C] THAT UMBRELLA HAS ABUSED ITS DOMINANT POSITION
[¶. 49] It is submitted before the committee that Umbrella has abused its dominant position in
the market for manufacture and sale of gaming consoles by violating the provisions of the
Act. It has violated Section 4(1) of the Act by denying Acme access to this market42.
[C.1] THAT UMBRELLA CAUSED DENIAL OF MARKET ACCESS
41
Fortner Enterprise, Inc. v. United States Steel Corp., 394 U.S. 495 (1969).
42
12

[¶. 50] Section 4(2)(c) of the act is worded in an extremely wide manner which suggests that
any entry barrier created by the dominant enterprise, by its conduct with results in denial of
market access in any manner will be an abuse. The cci has dealt with scope of the section
43
succinctly in BCCI case where the cci reviewed a clause in media rights agreement and
held that long term agreements which results in denial of market access to any potential
competitors and hence create entry barrier is an abuse.
[¶. 51] In the Oscar Bronner case44, the European Commission, propounded the essential
facility doctrine. This doctrine states that the raw material required for further creation on
product is an essential facility, and hence those dominant entities which refuse to provide
those essential facility, negatively affect the sustainability of other competitors in the market.
In Coal India case, CCI was of the opinion that the long-term agreement imposing unfair
condition regarding the supply of non-coking coal, which is an essential material for
production of electricity, has negative affect on its competitors.
[¶. 52] In the instant case, the game development service of Epoc is the essential facility
because it is essential material for gaming console manufacturer. Umbrella by an agreement
of exclusivity which has restricted Epoc from developing games for other gaming console
manufacturer has caused the restriction of this essential facility in the market and hence
denying them access to this market thus causing negative effect on the competitors.
[¶. 53] Therefore, it humbly submitted before the committee that Umbrella has abused its
dominance in the market by denying Acme the access to this market.
ISSUE 3. WHETHER THE CONSOLE MAKERS HAVE ABUSED THEIR DOMINANT

POSITION UNDER SECTION 4 OF THE ACT?
[¶. 54] Yes. In the instant case it is submitted before the Court that the Console
Manufacturers abused their dominant position under Section 4 of the Act in the relevant
market.
43
Surrinder Brami v BCCI, Case No. 61/2010, (Competition Commission of India).
44
Oscar Brooner v Media Print, C-7/97.
13

[¶. 55] It is submitted before the Court that when an enterprise exercises a dominant
position, it has a special responsibility not to allow its conduct to impair competition. 45 In the
present case the Console Manufacturers violated Section 4(2)(a)(i) of the Competition Act by
engaging in abusive exclusionary conduct. They denied market access to Independent Service
Providers under Section 4(2)(c) of the Act and, engaged exploitation of dominance in one
market to protect another relevant market under Section 4(2) (e) of the Act. Dealing with the
allegations of abuse of dominance under section 4, the first step is to determine the relevant
market46
[¶. 56] In order to inquire into the issues of dominance and abuse under the provisions of the
Act, it is necessary to (a) determine the relevant market as prescribed under Section 2(r) of
the Act,47 (b) assess dominance in the relevant market with regards to the factors laid down in
Section 19(4) of the Act, and (c) establish abuse of dominance under Section 4 of the Act.
The console makers have abused their position under Section 4 of the Act because [3.A]
Aftermarket services constitute a separate relevant product market [3.B] The console makers
were dominant in the aftermarket [3.C] The Console makers abuse their dominance under
Section 4 of the Act and that [3.D] The defence of IPR is not valid.
[3.A] THAT AFTERMARKET SERVICES CONSTITUTE A SEPARATE RELEVANT PRODUCT

MARKET
[¶. 57] The relevant market in the present case is After Sale Services to Consoles. It is the
downstream market where the abuse has been occasioned. The Aftermarket is dependent on
the Consoles Sales Market which is the upstream market i.e. market for manufacturing and
sale of consoles attains relevance. The geographic market, in the present case is limited to
Imarti. Thus, the relevant market is Aftermarket for Gaming Consoles in Imarti. It is
submitted before the Court that Gaming Consoles are not interchangeable with the services
rendered by the After-Sale Market. The allegations of abuse in the present case pertain to
both the upstream market and the downstream market.
45
Treaty on the Functioning of the European Union Art. 102, 2008 O.J. C 115/47, hereinafter “TFEU”.
46
NK Natural Foods (P.) Ltd. v. Akshaya (P.) Ltd., Case No. 74/2013 (Competition Commission of India).
47
Mr. Ramakant Kini and Dr. L.H. Hiranandani Hospital, Powai, Mumbai, Case No. 39/2012 (Competition
Commission of India).
14

[¶. 58] In the case of Shamsher Kataria48 the distinction was brought in in the relevant
product market between the primary market, which is the manufacturing and sale of products
and the aftermarket which is constituted by provision of aftersales services, supply of spare
parts and other diagnostic tools. There can be different competitive constraints on the original
equipment market and that of the spare parts leading to the delineation of the markets 49.
Hence, relevant market in the instant case has to be analysed not on the basis of primary
market but on the basis of aftermarket for the sale of spare parts, repair and maintenance
services50.
[¶. 59] The ISOs provide such aftermarket services to the customers for the repair and spare
parts for the consoles. Therefore, it is humbly pleaded before the Commission that the
Aftermarket services provided by the ISOs for console constitutes another relevant market.
[3.B] THAT THE CONSOLE MAKERS WERE DOMINANT IN THE AFTERMARKET
[¶. 60] Section 4(a) of the Act defines ‘dominant position’ as, (a) “a position of strength,
enjoyed by an enterprise, in the relevant market, enabling it to,” (b) “operate independently
of competitive forces prevailing in the relevant market”. Further, Section 19(4) of the Act
prescribes factors that must be considered while enquiring into whether an enterprise enjoys a
dominant position. For the same purposes, dominance shall be assessed on the basis of (a)
market share, 51 (b) entry barriers,52 and (c) size and resources of the enterprise53(d) high level
of vertical integration.
[B.1] THAT THE CONSOLE MAKERS WERE COLLECTIVELY DOMINANT
[¶. 61] In Hiranandani case54 it was held that it was necessary to determine market
dominance in respect of violation of section 4. Article 102 of the Treaty on the Functioning
of the European Union prohibits any “abuse by one or more undertakings of a dominant
position,”55 A joint dominant position consists in a number of undertakings being able
48
Supra note at 6.
49
Commission Notice On The Definition Of Relevant Market For The Purposes Of Community Competition
Law, OJEC, [C372/5], [C372/6], (1997), https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?
uri=CELEX:31997Y1209(01)&from=EN.
50
Toyota Kirloskar v Competition Commission of India (60/2014).
51
The Competition Act, 2002, § 19(4)(a) No. 13, Acts of Parliament, 2003, (India).
52
The Competition Act, 2002, § 19(4)(h) No. 13, Acts of Parliament, 2003, (India).
53
The Competition Act, 2002, § 19(4)(b) No. 13, Acts of Parliament, 2003, (India).
54
Supra note at 47.
55
Treaty on the Functioning of the European Union Art. 102, 2008 O.J. C 115/47.
15

together, in particular because of factors giving rise to a connection between them, to adopt a
common policy on the market and act to a considerable extent independently of their
competitors, their customers, and ultimately consumers.56
[¶. 62] In order for such a collective dominant position to exist, the undertakings in the
group must be linked in such a way that they adopt the same conduct on the market. 57 In P,
Compagnie Maritime Belge Transports SA v. Commission58 the Court held that tangible links
are not necessary in order to establish collective dominance. An undertaking either on its
own or together with other undertakings must hold a leading position on that market
compared to its rivals.
[¶. 63] In the present case, Umbrella began establishing Umbrella Authorised Repair
Centres. It issued licenses to ISOs to become Authorised Service Centres on the condition
that they only service Umbrella consoles and offer Epoc Games for sale 59. Other Console
Manufacturers followed soon and ASPs formed to deal exclusively with a single brand. This
exclusive tie-in reduced the market share of ISOs.
[¶. 64] Therefore, it is humbly submitted that as the ASP’s serviced one brand exclusively
and the manufacturers licensed these ASPs, the console manufacturers gained 100% of the
after-sale service market for their brand consoles. Collectively all the ASPs cut off
information access to ISPs forcing them to either sign exclusivity agreements with the
console manufacturers or lose business as information essential for servicing was withheld. It
is submitted that the console manufacturers collectively dominated the After-sale service
market through the ASPs.
[B.2] THAT THE CONSOLE MAKERS CREATED ENTRY BARRIERS FOR ISO’S
[¶. 65] Article 19(4)(h) of Act states entry barriers as regulatory barriers, financial risk, high
capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale,
high cost of substitutable goods or service for consumers.
[¶. 66] In the instant case, the console manufacturers created a technical entry barrier for
ISOs by withholding information necessary for service of the consoles. Information that was
56
Irish Sugar plc v Commission [1999] ECR II-2969 [46].
57
Amelo v NV EnergiebedrijfIjsselmij [1994] ECR I-1477.
58
P, Compagnie Maritime Belge Transports SA v. Commission [2000] ECR I-1365.
59
16

freely available to ISOs was restricted. The Console Manufacturers started issuing licenses to
ISOs to become Authorised Service Centres on the condition that they only service Umbrella
consoles and offer Epoc Games for sale 60. It otherwise does not make any of its information
for servicing freely available. Withholding of information required for service of consoles
created technical entry barriers for ISOs who had to sign exclusivity agreements with brands
to get the necessary information required for repairs.
[¶. 67] In Kodak case61 a group of independent service organizations (“ISOs”) that repaired
Kodak copiers, often at lower prices than Kodak, brought an action against Kodak after it
decided to cease selling replacement parts to the ISOs. The ISOs alleged that Kodak violated
U.S. antitrust laws by tying the sale of parts for its copiers to the sale of Kodak-brand service.
[¶. 68] Therefore, it is humbly submitted before the Committee that the Console
Manufacturers created entry barriers for ISOs.
[B.3] THAT CONSOLE MANUFACTURERS HAD THE SIZE AND RESOURCES OF

DOMINANT ENTITY
[¶. 69] Section 19(4)(b) of the Act enlists size and resource of the enterprise as a factor to be
considered while inquiring about the position of the enterprise in the market. In the instant
case, the Console Manufacturers had the size and the resources to dominate the aftermarket
of gaming consoles. In the gaming industry, they had the revenue share of 51%62.
Furthermore, they had access to information over the consoles that were required for service.
This technical information is essential for the functioning of the aftermarket constituted by
the ISOs for after-sale services. By restricting the said information, the Console
Manufacturers have denied access to the technical information to the ISPs for servicing the
consoles.
[¶. 70] In the case of Shamsher Kataria63 and Fx-Enterprise Solution v Hyundai64, the
original equipment manufacturers were held to be 100% dominant entity for the sale of
genuine spare parts and correspondingly in the after sale services in the aftermarket.
60
Id.
61
Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992).
62
63
Supra note at 6.
64
Fx-Enterprise Solution v Hyundai, Case Nos. 36 & 82/2014 (Competition Commission of India).
17

[¶. 71] After the Manufacturers started licensing ISOs to form ASPs, the ASPs became
collectively dominant in the Aftermarket. Each brand became 100% dominant for the After-
sale service of their products through ISOs. The console makers started putting seals of
authenticity on the spare parts and making other technical information as well as spare parts
and available to only to ASCs thereby eliminating the ISOs from the market. Therefore,
Console Manufacturers held a 100% dominant position in the after sale services of the
consoles.
[B4] THAT THERE WAS HIGH LEVEL OF VERTICAL INTEGRATION
[¶. 72] In the instant case, the manufacturers achieved a high level of vertical integration by
nature of the agreements entered into with the ASPs. Courts have held that heavily integrated
dominant undertakings tend to monopolize markets throughout the chain by market
foreclosure.65
[¶. 73] In United States v Pullman66 a company which manufactured and serviced the car
components, was said to be a case of vertical integration. In Toyota Case67, the supply of
spare parts to independent repairers had been so restricted that independent repairers were not
in a position to source spare parts in an economically rational manner. They were also
deprived of diagnostic tools and technical information and consequently they were able to
push independent repairers out of the market thereby facilitating the availability of the
services/repairs market to their associates- the authorised dealers.68
[¶. 74] In this scenario, a factor that would discourage new entrants from entering the market
as an Independent Service Provider has emerged. Such discouragement is considered as an
entry-barrier.69 By hindering ISPs’ entry into the market such a format of distribution is likely
to be foreclosed. Therefore, the exclusive distribution agreement operates to the detriment of
the consumer and causes AAEC in the aftermarket.
[¶. 75] Google was fined €1.49 billion by European Commission for abusive practices in
online advertising. Google provided its own comparison-shopping service a more favourable
65
United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948).
66
United States v. Pullman Co., 50 F. Supp. 123, 137.
67
Supra note at 50.
68
Id.
69
European Commission, Online Glossary
http://ec.europa.eu/translation/english/guidelines/documents/glossaries_on_europa_en.pdf, (last visited .on
January 10, 2020).
18

positioning and display in its results page compared to competing comparison-shopping

services. It infringed Article 102 of The Treaty on the Functioning of The European Union
and Article 54 of the European Economic Area Agreement. It held that this vertical
integration is capable of having, or likely to have anti-competitive effects in the national
markets for comparison shopping services and general search services.”
[¶. 76] In the present case, ASPs are an extension of the Console Manufacturers only. They
are in direct competition with their customers (for information regarding consoles). This level
of integration makes every action of Console Manufacturers come under close scrutiny.
[3.C] THAT THE CONSOLE MAKERS ABUSED THEIR DOMINANCE UNDER SECTION 4 OF
THE ACT
[¶. 77] The Act prescribes that any conduct of a dominant enterprise falling within the
contours of Section 4 will amount to the abuse of its position. It is contended that the
manufacturers’ engaged in the exclusionary abuses of (i) denial of market access70.
[C.1] THAT UMBRELLA CAUSED DENIAL OF MARKET ACCESS
[¶. 78] It is contended that the manufacturers’ practices amount to a denial of market access
under 4(2)(c) of the Act. The behaviour of the dominant firm which is likely to cause partial
or complete denial of access to the potential or actual competitors, ultimately harming the
customers is known as exclusionary abuse which is likely to have a foreclosure effect on the
market71. Given the special responsibility72 of dominant enterprises not to impair genuine
competition in the relevant market it is submitted that the conduct is exclusionary and leads
to the denial of market access. In the instant case foreclosure is apparent in the declining
market shares of the ISPs coupled with the increasing market share of the ASPs 73. ASPs
which are essentially an extension of Console Manufacturers are in direct competition with
ISOs. When a manufacturer limits the access of ISPs to essential facilities required to
effectively compete with ASPs in the aftermarket it amounts to denial of market access.
70
The Competition Act, 2002, § 4(2)(c), No. 13, Acts of Parliament, 2003, (India).
71
European Commission, Competition discussion paper on the application of Article 82 of the Treaty to
exclusionary abuses (2005).
72
Treaty on the Functioning of the European Union Art. 102, 2008 O.J. C 115/47.
73
Moot Proposition ¶ 7.
19

[¶.79] The doctrine of essential facilities as defined in the case of Aspen Skiing Co. v. Aspen
Highlands Skiing Corp74 states that when an enterprise which holds a dominant position in
the relevant market (i) controls a product that is necessary for accessing the market, which is
(ii) not easily reproducible at a reasonable cost in the short term, (iii) not interchangeable
with other products/services, the said enterprise may not refuse to share it with its
competitors, without justification, at reasonable cost.
[¶. 80] Indispensability or substitutability is established only when the input refused cannot
be obtained through an alternative source. In the present case, Console Manufacturers use
proprietary technology to develop the consoles. This technology is indispensable to the
market and is evidently unattainable from any other alternate source other than the Console
Manufacturers. Such an information is not freely available in the market nor can ISOs
develop the technology on their own. Therefore, the console manufacturers denied the ISOs
access to the market by withholding such essential information.
[3.D] THAT THE DEFENCE OF INTELLECTUAL PROPERTY RIGHT IS NOT VALID
[¶. 81] Section 3(5) of the Act provides the dominant enterprise with a defence of Intellectual
Property Right75 under the IPR laws in India. The Console Manufacturers have taken the plea
of Intellectual Property Right. They have argued that they are not under an obligation to share
information about their consoles to the ISOs because the information is protected by
Intellectual Property Rights. They are the owners of the property and are not required to share
it with anyone.
[¶. 82] It has been generally accepted that IPRs are subject to general antitrust principles
because IPR confers upon its owner only the autonomy of decision in competition and the
freedom to enter contract regarding the property subjected to the right 76. Section 3(5) of the
Act states that the Section 3 doesn’t restrict the right of any person to restrain any
infringement of, or to impose reasonable conditions, as may be necessary for protecting any
of his rights77. It allows the owner of the intellectual property, in exercise of his right, to
74
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 427 U.S. 585 (1985).
75
Herein after IPR.
76
ULLRICH (2001), INTELLECTUAL PROPERTY, ACCESS TO INFORMATION, AND ANTITRUST:
HARMONY, DISHARMONY, AND INTERNATIONAL HARMONISATION, 366, DREYFUSS,
ZIMMERMAN AND FIRST (ED.), EXPANDING THE BOUNDARIES OF INTELLECTUAL PROPERTY,
OXFORD UNIVERSITY PRESS, 2001.
77
The Competition Act, 2002, § 3(5), No. 13, Acts of Parliament, 2003, (India).
20

imposing restrictions having anti-competitive effects to the extent that they are reasonable
and necessary to protect his rights by which it clearly limits the scope of the right held by the
owner.78 The protection of intellectual property by itself cannot be considered as a reasonable
condition.79
[¶. 83] The ECJ confirmed in Magill’s case80 where the Radio Telefilms Eireann (RTE) and
Independent Television Publications Limited (ITP) were primary and the only source of
information for programming and scheduling being the indispensable for the operation of
weekly television guide, they were not given the protection of the IPR against dissemination
of such information to the third party. The Court held that such a refusal, will render the use
of IPR as abuse of dominance under Article 86 of Treaty of Rome.
[¶. 84] In the case of AB Volvo v Erik Veng81 it was held that the exercise of his IPRs by the
proprietor can be prohibited by Article 86 if it indulges in abusive conduct such as refusal to
supply spare parts to independent repairers, or unfair pricing, etc. if such a conduct has an
effect on trade practices.
[¶. 85] The Raghavan Committee report states that “During the exercise of a right, if any
anti-competitive trade practice or conduct is visible to the detriment of consumer interest or
public interest, it ought to be assailed under the Competition Policy/Law”82 Moreover,
Section 60 gives overriding effect to Competition Law over IPR law.83
[¶. 86] In the case of Toyota Kirloskar Motor (P.) Ltd84 it was decided that the enterprises
which are found to be dominant pursuant to Section 4(2) of the Act and indulges in the act of
denial of access to the market without any commercial justification cannot take the defence of
IPR of the equipment manufacture.
[¶. 87] In the present case, the Console Manufacturers have pleaded their IPR when they
were accused of abusing their dominance in the relevant market. They have restricted the
technical information to the ASCs for the servicing of the consoles making them a sole
repository of such information which makes the operation and survival of the ISOs difficult
in the market. They have thereby denied access to market, service and repair to the ISOs.
78
Supra note at 50.
79
Id.
80
Radio Telefilms Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission of the
European Communities ECR 1995 I-00743.
81
Volvo AB v Erik Veng (UK) Ltd (238/87), (Competition Commission of India).
82
SVS Raghavan Committee, 1999.
83
The Competition Act, 2002, §60, No. 13, Acts of Parliament, 2003, (India).
84
Supra note at 50.
21

[¶. 88] Therefore, it is humbly submitted that the Console Manufacturers cannot take the
defence of IPR under Section 3(5) of the Act.
22

PRAYER FOR RELIEF
Wherefore, in the light of facts stated, issues raised, arguments advanced and
authorities cited, it is most humbly prayed that this Hon’ble Court may be
pleased to adjudge, hold and declare the following:
1. Declare the agreement between Umbrella and Epoc

2. Restrict and penalise Umbrella from abusing its dominant position
3. Restrict and penalise Console Manufacturers from abusing its dominant
position
And/or pass any other order in favour of the Respondent that it may deem fit in the light of
justice, equity, and good conscience. All of which is most humbly prayed.
Place: Imarti s/d
Dated: January 16, 2020 Counsel for Informants
23

3 Tnnlu N M C C, 2020: Ational OOT Ourt Ompetition

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TEAM CODE:

3RD TNNLU NATIONAL MOOT COURT COMPETITION,

IN THE COMPETITION COMMISSION OF INDIA

IN THE MATTER PERTAINING TO

CASE NO. 76 OF 2018

ACME PVT. LTD. …INFORMANT

CASE NO. 1 OF 2019

INDEPENDENT SERVICE OPERATIONS …INFORMANTS

UBMRELLA PVT. LTD. & OTHERS …OPPOSITE PARTY

WRITTEN SUBMISSIONS ON BEHALF OF THE INFORMANT

[1.A.] That the Agreement is an Exclusive Supply Agreement 1

[1.B.] That the Agreement is an Exclusive Distribution Agreement 3

[1.C.] That the Agreement Causes Refusal to Deal 3

[1.D] That the Agreement Causes Appreciable Adverse Effect on Competition 4

[2.A.] That home consoles forms a Relevant market

[2.B.] That Umbrella was in a dominant position

[2.C.] That Umbrella abused its dominant position 12

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[3.A] That Aftermarket Services Constitute a Separate Relevant Product Market 14

[3.B] That the Console Makers were Dominant in the Aftermarket

[3.C] That the Console Makers Abused Their Dominance

Under Section 4 of the Act

[3.D] That the Defence of Intellectual Property Right is Not Valid. 20

PRAYER FOR RELIEF

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

S. No. NAME OF THE CASE CITATION FOOTNOTE PAGE

14. L. H. Hiranandani hospital v. (appeal no. 19/2014) 14 16

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

 SANDRA MARCO COLINO, VERTICAL AGREEMENT AND COMPETITION LAW (HART

 THE COMPETITION ACT, 2002

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

 Commission Notice on The Definition Of Relevant Market For The Purposes Of

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

AGREEMENT WITH EPOC

C. Exclusivity regarding development and sale of video games for consoles:

CONFLICT WITH ISOS

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-COMPETITIVE?

WHETHER UMBRELLA ABUSED ITS DOMINANT POSITION IN THE MARKET ?

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

ISSUE 1. WHETHER THE AGREEMENT BETWEEN UMBRELLA AND EPOC IS ANTI-

The agreement between Umbrella and Epoc is anti-competitive because it contains an

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[1.A] THAT THE AGREEMENT IS AN EXCLUSIVE SUPPLY AGREEMENT

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[1.B] THAT THE AGREEMENT IS AN EXCLUSIVE DISTRIBUTION AGREEMENT

[1.C] THAT THE AGREEMENT CAUSES REFUSAL TO DEAL

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[1.D] THAT THE AGREEMENT CAUSES APPRECIABLE ADVERSE EFFECT ON COMPETITION

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[D.1] THAT THE AGREEMENT HAS FORECLOSED COMPETITION

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[D.2] THAT THE AGREEMENT IS DRIVING EXISTING COMPETITORS OUT OF

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[ISSUE 2.] WHETHER UMBRELLA ABUSED ITS DOMINANT POSITION IN THE

[2.A] THAT HOME CONSOLES THE RELEVANT MARKET

MEMORANDUM ON THE BEHALF OF THE INFORMANTS

[2.B] THAT UMBRELLA WAS IN A DOMINANT POSITION

MEMORANDUM ON THE BEHALF OF THE INFORMANTS