BEFORE THECOMPETITION COMMISSION OF HOENN

Under Section 19(1) read with Section 26(5) of the Competition Act of Hoenn, 2002

In the matter of:

ARUNDHATI BHARGAWA ….……………………………………………..INFORMANT

Vs.

SITARA AIRLINE& OTHERS………………………………………....OPPOSITE PARTY

Clubbed With

FUN HOTELS & MAJESTIC TRAVELS..................................................INFORMANTS

Vs.

EZBOOKING……………………………………………………...........OPPOSITE PARTY

-MEMORIAL ON BEHALF OF INFORMANTS-

O.P. JINDAL GLOBAL UNIVERSITY, COMPETITION LAW MOOT, FALL 2019

Submitted by:

OJASWINI TRIPATHI
 2

TABLE OF CONTENTS:

1 .STATEMENT OF JURISDICTION .................................................................................. 3

2. LIST OF AUTHORITIES................................................................................................... 4

3. STATEMENT OF FACTS .................................................................................................. 6

4. QUESTION PRESENTED ................................................................................................. 9

ISSUE 1:WHETHER A CARTEL, AS ALLEGED BY MS.ARUNDHATI

BHARGAVA, DOES INDEED EXIST BETWEEN THE AIRLINE SERVICE
PROVIDERS? .................................................................................................................... 9

ISSUE 2: WHETHER THERE HAS BEEN AN ABUSE OF DOMINANCE BY

EZBOOKING AS ALLEGED BY FUN HOTELS AND MAJESTIC TRAVELS? ......... 9

5. SUMMARY OF ARGUMENTS ....................................................................................... 10

6. ARGUMENTS ADVANCED ............................................................................................ 11

EZBOOKING’S CONDUCT AMOUNTED TO PREDATORY PRICING UNDER

4(2)(A)(II). ........................................................................................................................... 17

7. PRAYER ............................................................................................................................. 19
 3

STATEMENT OF JURISDICTION

The Informants humbly submits that the Hon’ble Competition Commission of India exercises
jurisdiction to hear to the complaint under Section 19 read with Section 26 (5) of the
Competition Act, 2002.

“19. (1) The Commission may inquire into any alleged contravention of
the provisions contained in subsection (1) of section 3 or sub-section (1) of
section 4 either on its own motion or on—

(a) 29[receipt of any information, in such manner and] accompanied by

such fee as may be determined by regulations, from any person, consumer
or their association or trade association; or”

“26. Procedure for inquiry on complaints under section 19.—

(5) If the report of the Director General relates on a complaint and such
report recommends that there is no contravention of any of the provisions
of this Act, the complainant shall be given an opportunity to rebut the
findings of the Director-General.”
 4

LIST OF AUTHORITIES

BOOKS:

• ABIR ROY AND JAYANT KUMAR, COMPETITION LAW IN INDIA (2nd ed.,
2014).
• 1 S.M. DUGAR, GUIDE TO COMPETITION LAW (6th ed., 2016).

CASES:

a) In Re: Builders Association vs. Cement manufacturers association and others.

b) In Re: Express Industry Council of India vs. Jet Airways & Ors.
c) In re: SuoMotu Case against LPG Cylinder Manufacturers.
d) M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd., Case
09/2013, (CCI).
e) MCX Stock Exchange Ltd v. National Stock Exchange of India Ltd. & Ors., 2011
CompLR 129 (CCI).
f) In Re: Johnson And Johnson Ltd., (1988) 64 Comp Case 394; Tetra Pak
International SA v. Commissioner, 1994 ECR II-00755.
g) Stock Exchange Ltd v. National Stock Exchange of India Ltd. & Ors., 2011
CompLR 129 (CCI).

• Statutes:
The Competition Act, 2002.

• OTHER AUTHORITIES

Abuse of Dominance, COMPETITION BUREAU GOVERNMENT OF 17

CANADA (Oct. 29, 2017, 11:26 PM),
http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00511.html. 13 1
Guidance on the Commission’s Enforcement Priorities in applying (Article 102 17
TFEU) to Abusive Exclusionary conduct by Dominant Undertaking. (2009) OJ
C45/7.
http;//www.cci.gov.in/sites/default/files/advocacy_booklet_document/AOD.pdf.
 5

Commission Notice on the definition of the Relevant Market for the purposes of 15-
Community Competition Law (OJ 1997 C372, p5, ¶7). 16
E.U. Guidance on the Commission’s Enforcement Priorities in Applying Article 16
82 EC Treaty (102 TFEU) to Abusive Exclusionary Conduct by Dominant
Undertakings (the “Guidance”) [(2009/C 45/02)].
Provisions related to Abuse of Dominance, Advocacy Series 4, 17-
COMPETITION COMMISSION OF INDIA (Oct. 29, 2017, 05:11 PM), 18
 6

STATEMENT OF FACTS

i. In the Republic of Hoenn, the domestic travel industry has been steadily increasing in
size since the 1990s. Initially, the industry was underdeveloped with only one national
airline carrier who operated in Hoenn.

ii. In the late 1990s, private players were allowed to operate and eventually the national
airline carrier of Hoenn was replaced by several private players. With the entry of
private players in the industry, the price of airline tickets drastically reduced which led
to an increase in the demand for airline carriers and simultaneously, the industry
became very lucrative.

iii. In the past few years, the situation in the airline industry has been deteriorating. The
price of jet fuel has been increasing consistently for the past 5 years and has seen a
30%increase since 2015. This, in turn, has increased the operating costs for all the
airlines in Hoenn. In addition to the increase in cost, the intense competition among
private players saw the price of airline tickets come down. As a result, the profit
margin of many airline carriers reduced drastically.

iv. Due to the increase in operating costs and recent exit of Hoenn Airlines, Sitara Airlines
sent a letter to its remaining competitors, namely, Active Air, Republic Air, Omega
Airlines, United Airlines and Explorer Airlines. Sitara Airlines was facing financial
uncertainty and was on the brink of bankruptcy themselves.

v. In this letter, Sitara Airlines raised concerns regarding the rising operating costs and
the recent closure of Hoenn Airlines. Sitara Airlines indicated in this letter that
understanding the issues that plagued the industry was crucial for preventing the exit
of more airline carriers. In response to the letter sent by Sitara Airlines, the CEOs of all
the airlines except for the CEO of Omega Airlines met at a hotel conference room on
the 5th of March 2020.

vi. At this meeting, the CEOs agreed that the situation has become grave and that some
action must be taken so that the situation does not become worse. The CEO of
Republic Air pointed out that one of the reasons that Hoenn Airlines closed down is
 7

because of the intense price competition that has been taking place. All the CEOs
acknowledged this fact and agreed upon meeting at a later date to further discuss this
issue.

vii. On the 10th of March, all of the CEOs, including the CEO of Omega Airlines, met
once again at the same hotel conference room. At this meeting, the CEOs further
discussed the issues surrounding the sale of airline tickets. The CEOs pointed to the
fact that the number of tickets that they have been selling has slowly been decreasing
as consumers prefer the cheaper priced tickets of ActiveAir.The CEOs of Republic Air
and Explorer Airlines suggested that if the burden of the operating costs can be borne
by all the players, it can improve the profit margins for everybody.

viii. There were no meetings or any other communication between the CEOs after the 10th
March meeting. However, it was noticed that over the course of the next 5 days, the
prices of airline tickets became more similar.

ix. The following day, the CEO of Active Air stated in a conversation with the media that
due to the cooperation among the players in the industry, the situation for all has
improved drastically and that it is unlikely that any airline would have to close down
in the near future.

x. With the steep increase in demand for airline carrier services, online and offline
airline ticket booking agencies also began to operate. During the last 10 years,
agencies that provided all three of these services also began to operate in Hoenn.
These agencies provide integrated services for customers who could use these travel
agencies to book their airplane tickets as well as hotels, taxis and sight-seeing tickets
together.

xi. The agencies that provide such integrated travel services to customers are EzBooking,
Thakur Travels Co. and Happy Travels Inc. The agencies that provide only airline
ticket booking service are Journey Helper Inc., Get My Ticket Co. and Majestic
Travels. Among these, EZBooking is widely considered to be the company that has
revolutionized the travel industry with their innovative schemes and reputation of
putting the customer’s needsfirst.Among the different services offered, EZBooking is
 8

most successful in its hotel booking and trip planning service which, together, account
for 75% of its revenue. The remaining 25% comes from its airline ticket booking
service.

xii. In 2017, a new hotel chain called Fun Hotels was established. Fun Hotels is a chain of
hotels that is owned by Fun Hotels Holdings Inc. Fun Hotels have multiple small
hotels which exist and operate in the same city. They contacted many local
guesthouses and hotels and brought them under the Fun Hotels name. When they first
began operating, Fun Hotels enjoyed a period of rapid growth. After a period of time,
their growth slowed down considerably.

xiii. Fun Hotels found that on EzBooking’s website, when customers would be choosing
which hotel to book, they would be offered an additional discount on their hotel room
if they also bought their airline ticket from EZBooking.com. This scheme was known
as the Zero Hassle Travel Scheme and was introduced by EZBooking in January
2020. These discounts would range from 10% to 25% of the total cost of the hotel
stay depending on the kind of flight that the consumer wished to take.

xiv. After introducing the Zero Hassle Travel Scheme, consumers began to use the airline
ticket booking service of EZBooking more. This shift took place because consumers
believed that the introduction of the Zero Hassle Travel Scheme made it much more
convenient for them to plan their trips since they could book their hotel room(s) and
airline tickets at the same time and at a lower overall cost.

xv. It was also found that EZBooking began charging a higher commission rate than its
competitors from January 2020 onwards. While most competitors charged a
commission between 5-7%, EZBooking was now charging a commission between 10-
20%.The market position of EZBooking also improved (from 15% to 25%) in the
airline ticket booking industry because of these business practices. Gradually,
EZBooking emerged as the leading service provider in all three segments: airline
ticket booking, hotel booking and trip planning.
 9

QUESTION PRESENTED

ISSUE 1: Whether a cartel, as alleged by Ms.Arundhati Bhargava, does indeed exist between
the Airline Service Providers?

ISSUE 2: Whether there has been an abuse of dominance by EZBooking as alleged by Fun
Hotels and Majestic Travels?
 10

SUMMARY OF ARGUMENTS

ISSUE 1:

The Competition Act defines the term cartel as "an association of producers, sellers,
distributors, traders or service providers who by agreement amongst themselves, limit,
control or attempt to control the production, distribution, sale or, price of or trade in goods
or provision of services.". The bottom line is that cartels restrict competition, and the
offshoots of their functioning include the misallocation of resources and the deterioration of
consumer welfare. Additionally, the case of In Re: Builders Association of India1levied an
immense penalty on the members of the cartel and held that in order to prove a cartel case in
India the standard of evidence is one of "balance of probabilities", as opposed to the "beyond
reasonable doubt" standard underlying criminal law. Furthermore, it is relevant to mention
here that, in order to prove the existence and functioning of a cartel, one must establish that
the competitors had entered into an agreement with the explicit goal of fixing prices, limiting
supply, sharing markets, or rigging bids. Once a cartel is found to exist, by default, it is
hypothesized to cause an appreciable adverse effect on competition (AAEC). It is our
argument that the unofficial understanding arrived at between various Airline Service
Providers was for the sole purpose of fixing prices and has a direct implication on the
consumers.

ISSUE 2: In establishing the fact that EzBooking has a dominant position in the relevant
market, it is first prudent to define the relevant market according to the Competition Act. In
order to do so, two factors i.e., geographic market and product market are to be evaluated. It
is submitted that the relevant market constitutes both these elements. Additionally, upon
evaluation under Section 19(4) of the Competition Act and taking into consideration ‘market
share’ as a relevant factor, it can be established that EzBooking was dominant in the Hoenn
market. Considering the fact that market dominance is not in itself illegal, it is argued that
that EzBooking has abused its dominant position in the market by way of extorting high
commission rates from hotel partner who wanted to be listed on EzBooking’s platform as
well as engaged in predatory pricing by offering deliberately deep discounts, both in
contravention of Section 4 of the Competition Act.

1
Case No. 29 of 2010
 11

ARGUMENTS ADVANCED

ISSUE 1: WHETHER A CARTEL, AS ALLEGED BY MS.ARUNDHATI

BHARGAVA, DOES INDEED EXIST BETWEEN THE AIRLINE SERVICE
PROVIDERS?

A) AGREEMENT BY WAY OF CONCERTED ACTION SUGGESTING CONSPIRACY

The informants humbly submit that the tacit understanding arrived at between various Airline
Service Providers was solely for the purpose of price fixing and such an arrangement
between competing players in a market is anti-competitive in nature merely by virtue of its
very existence. Section 2, sub-section (c) of the Competition Act defines the term cartel as
"an association of producers, sellers, distributors, traders or service providers who by
agreement amongst themselves, limit, control or attempt to control the production,
distribution, sale or, price of or trade in goods or provision of services.".

Furthermore, Section 3 of the Competition Act categorically proscribes the creation of certain
anti-competitive agreements, such as agreements between or among competitors (horizontal
agreements, like those of cartels), and agreements between actors at different levels of the
production chain (vertical agreements). Agreements that are not in line with provisions of
Section 3, i.e. agreements that provide for bid-rigging, price-fixing, etc. are presumptively
deemed void.

Adam Smith, defined cartels as conspiracies against the public for how they impair the rights
of consumers.2 According to the Office of Fair Trading of the United Kingdom, a cartel is a
clandestine, verbal, and often informal agreement between businesses not to compete with
each other. Essentially, these limit output with the single-minded objective of increasing
prices and magnifying profits. These goals are attained by means of price fixing, allocation of
production, the sharing of geographic markets or product markets, and engagement in
collusive bidding or bid-rigging in one or more markets. The bottom line is that cartels
restrict competition, and the offshoots of their functioning include the misallocation of
resources and the deterioration of consumer welfare.

2
Smith Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, THE WEALTH OF NATIONS
125 (2007).
 12

The Indian Competition Act, 2002 covers cartels under Section 3(3). According to the
section, it is presumed that such agreements causes appreciable adverse effect on
competition. Thus the burden of proof in any cartel case is on the defendant to prove that the
presumption is not causing appreciable adverse effect on competition. Cartel includes an
association of producers, sellers, distributors, traders or service providers who, by agreement
amongst themselves, limit, control or attempt to control the production, distribution, sale or
price of, or , trade in goods or provision of service. There are three essential factors have
been identified to establish the existence of a cartel, namely:

i. Agreement by way of concerted action suggesting conspiracy;

ii. The fixing of price:
iii. The intent to gain a monopoly or restrict/eliminate competition3

In the case of “In Re: Builders Association vs. Cement manufacturers association and
other” of India famously known as the cement cartel case, the Competition Commission of
India levied an immense penalty of INR. 63.2 Billion on the members of the cartel and held
that in order to prove a cartel case in India the standard of evidence is one of "balance of
probabilities", as opposed to the "beyond reasonable doubt" standard underlying criminal
law. Furthermore, it is relevant to mention here that, in order to prove the existence and
functioning of a cartel, one must establish that the competitors had entered into an agreement
with the explicit goal of fixing prices, limiting supply, sharing markets, or rigging bids. Once
a cartel is found to exist, by default, it is hypothesized to cause an appreciable adverse effect
on competition (AAEC).

It is relevant to place reliance upon the letter sent by Sitara Airlines to its remaining
competitors, namely, Active Air, Republic Air, Omega Airlines, United Airlines and
Explorer Airlines. In the aforementioned letter, Sitara Airlines raised concerns regarding the
rising operating costs. Furthermore, with respect to the meeting held at a hotel conference
room on the 5th of March 2020, the CEO of Republic Air pointed out that one of the reasons
that Hoenn Airlines closed down is because of the intense price competition that had been
taking place. Thereafter, on the 10th of March, all of the CEOs, including the CEO of Omega
Airlines, met once again at the same hotel conference room and further discussed the fact that

3
ITC Ltd v MRTP Commission (1996) 46 Comp Cas 619.
 13

the fact that the number of tickets that they have been selling has slowly been decreasing as
consumers prefer the cheaper priced tickets of Active Air.

It is relevant to mention herein that after the second meeting i.e. 10th of March 2020, there
was a unanimous change in the prices of various Airline Service Providers and it is by no
coincidence that the CEO of Active Air was recorded in a conversation with the media stating
that “due to the cooperation among the players in the industry, the situation for all has
improved drastically and that it is unlikely that any airline would have to close down in the
near future”. It is clearly evident from the above facts that there was a tacit understanding
between the various competitors in the Airline Service market in order to fix prices to
maximize their profits and cause detriment to the consumer.

B) THE PRICE FIXING: AN ESSENTIAL FOR CARTELISATION.

It is further relevant to mention that, in a cantina of decisions the Competition Commission of

India has observed that in order to prove the existence of a cartel, one must prove that the
competitors had entered into an agreement with the explicit goal of fixing prices, limiting
supply, sharing markets, or rigging bids. Once a cartel is found to exist, by default, it is
hypothesized to cause an appreciable adverse effect on competition (AAEC).In re: SuoMotu
Case against LPG Cylinder Manufacturers4, the Commission had held the manufacturers of
LPG cylinders guilty of bid-rigging for quoting “identical prices” in the tender issued by
Indian Oil Corporation Limited. All LPG manufacturers were penalized at the rate of 7% of
their average turnover.CCI presumes that there is an appreciable adverse effect in the market
and the presumptions operate where certain facts may be presumed to exist even in the
absence of complete proof.5

Furthermore, reliance is placed on the case “In Re: Express Industry Council of India Vs. Jet
Airways & Ors.”, where the Competition Commission of India imposed a penalty of INR
2.58 billion on three airline companies for causing an appreciable adverse effect on
competition in the air cargo industry by fixing the Fuel Surcharge Rate.CCI held that
companies are free to revise prices depending on the behaviour of competitors and this would
itself not be indicative of cooperation among entities in the market. However, coordinated
action by parties was suggestive of prior information exchange and such actions cause
4
In re: SuoMotu Case against LPG Cylinder Manufacturers, Suo-motu Case no. 3/2011.
5
Steve Uglow, Evidence: Text And Materials , p.686(6th edn, 1997).
 14

inefficiencies in the market. Noting that cases of cartelization and concerted actions will not
have direct evidence, CCI observed that movement of FSC was indicative of concerted
action.

In view thereof, it is most humbly submitted that the sudden and coordinated changes in price
of Airline tickets just after the meeting held between various competitors in the Airline
Service market is absolutely indicative of concerted action and per se anti-competitive and
has an appreciable adverse effect on competition alongside disrupting market equilibrium
and market efficiency.

ISSUE 2: WHETHER THERE HAS BEEN AN ABUSE OF DOMINANCE BY

EZBOOKING AS ALLEGED BY FUN HOTELS AND MAJESTIC TRAVELS?

The informants humbly submit that the Opposite Party i.e. EzBooking has used its dominant
position in OTA market in order to extort high commission rates from hotels which want to
be listed on their platform.

Section 4(2) of the Act provides that there shall be an abuse of a dominant position if an
enterprise or a group:

• directly or indirectly imposes unfair or discriminatory conditions or prices in the

purchase or sale of goods or services;
• restricts or limits production of goods or services in the market;
• restricts or limits technical or scientific development relating to goods or services to
the prejudice of consumers;
• indulges in practices resulting in a denial of market access;
• makes the conclusion of contracts subject to acceptance by other parties of
supplementary obligations, which, by their nature or according to commercial usage,
have no connection with the subject of such contracts; or
• Uses its dominance in one market to enter into or protect its position in other relevant
markets (i.e., leveraging).

The first thing to be resolved in order to establish abuse of dominant position is the ‘relevant
market’ in which the accused party has a predominant position. Relevant market under the
provisions of the Act constitutes a 'product/service' dimension as well as a 'geographic'
 15

dimension. Relevant product market comprises all those products or services which are
regarded as interchangeable or substitutable by the consumer, by reason of their
characteristics, price and intended use. Thus, identification of consumers and their perception
with regard to interchange ability among products or services is the most important parameter
for defining relevant product market. The Opposite party i.e. Ezbooking essentially operate as
platforms catering to two sides or two sets of consumers- one that consists of consumers
searching for hotels and flights for booking/occupancy and the other that comprises hoteliers
or hotel partners who use the services of these platforms to sell their hotel rooms.

In case of platform markets, where the platforms may be serving many sets of consumers and
may be having multitude of relationships with these consumers, the consumer-side for which
the relevant market is being defined needs to be identified. Since the allegations in the
present case are primarily with regard to the hoteliers, the relevant market analysis needs to
be carried out from the perspective of hoteliers i.e. the relevant product market should
include all alternatives available with such hotels and the competitive constraints faced by the
focal product i.e. the service provided by the EzBooking in the present matter.

In view of the increased popularity and use of Online Travel Agencies by a large segment of
consumers in India, hotel operators now perceive them as a distinct mode of distribution
which cannot be simply replaced or substituted by other offline modes or direct sale without
losing out significantly on consumer reach.

Given the present market realities, for a hotel, all the three booking channels, i.e. direct
booking, offline booking through travel agents and booking through online travel agents are
used simultaneously and not as substitutes to each other. Considering the growing importance
of online platforms for visibility and discoverability of hotels, it is highly likely that in case
of a significant increase in the commission rates by all platforms, such a significant
proportion of hotels would move completely offline or to direct supply, losing significantly
on consumer outreach. Moreover, the online mode of distribution through third party
platforms, which provide the facility to search, compare and book at the same place, is
characteristically distinct from the services that the offline mode such as travel agents
provide.

It’s relevant to mention herein that as per carious reports, EzBooking’s market share is 50%
with respect to hotel booking services and 25% with respect to airline ticket booking services.
It is thus clearly evident that the Opposite Party holds a significant share in both markets,
 16

much greater than all its other competitors. This dominant position in the market has
empowered the Opposite Party herein to operate independently of the competitive forces
prevailing in the relevant market. The informants are left with no alternative but to pay the
exorbitant amounts of commission charged by the Opposite Party herein as they risk going
out of consumer reach as a direct consequence of being unlisted from EzBooking’s platform.
It is further relevant to mention that owing to its dominant position in both hotel booking and
airline ticket booking service market, EzBookings has been charging a commission of
anywhere between 10% to 20 % which is more than double of the operating market standard
which is between 5% to 7%.

Furthermore, it is relevant to mention that that the "average room rate" is the industry practice
for calculating unit basis cost of rooms. However, the Opposite Party through its “zero hassle
travel scheme’ has been offering the hotel rooms at less than the "average room rate". This
clearly amounts to predatory pricing and is in direct contravention of Section 4 of the act.
EzBooking’s high market share has led to tipping of the market in their favour and also
resulted in rapid erosion of the revenue of the hoteliers. The Opposite Party herein has been
offering deep discounts to the customers which have further led to expansion of their network
and retention of customers. Due to such conduct, the smaller players in the OTA market are
being forced to exit.

It is humbly submitted before this Hon'ble Commission that EzBooking was abusing its
dominant position by indulging into abusive practices (predatory pricing) prohibited under
section 4(2)(a) (ii).6 The conduct of EzBooking amounted to abuse of dominance as; it was
using predatory pricing which is prohibited under the Act. Both the conditions of predatory
pricing are satisfied in the instant case. Firstly, EzBooking was charging way below Average
Variable Cost, which per se led to the presumption of abuse, and Secondly, EzBooking has
an intent to oust its competitors from the market, which was apparent from EzBookings
deviation from its special responsibility and purpose of Competition Act, 2002. Moreover, it
also sustains the probability of recoupment.

6
§4(2)(a)(ii), The Competition Act, 2002.
 17

The test applied under section 47 has two elements: whether an undertaking is dominant in a
relevant market; and if so, whether it is abusing that dominant position.8

The Act gives an exhaustive list of practices that shall constitute abuse of dominant position
and, therefore, are prohibited. Such practices shall constitute abuse only when adopted by an
enterprise enjoying dominant position in the relevant market in India.9 Such acts are
prohibited under the law. Any abuse of the type specified in the Act by a dominant firm shall
stand prohibited.10

In this relevant market, EzBooking is alleged to be engaging in abusive conduct by way of

predatory pricing within the meaning of Section 4 of the Act. The discounts/incentives offered
by EzBooking to the consumers are alleged to be abusive, as the same are stated to be backed
by deep pockets rather than an efficient pricing model of EzBooking.

EZBOOKING’S CONDUCT AMOUNTED TO PREDATORY PRICING FEWER THAN

4(2) (A) (II).11

It is humbly submitted before this Hon'ble commission that EzBooking’s conduct amounted
to abusive practice (predatory pricing) within the meaning of section 4(2) (a) (ii).12

“Predatory price” means the sale of goods or provision of services, at a price which is below
the cost, as may be determined by regulations, of production of the goods or provision of
services, with a view to reduce competition or eliminate the competitors.13

In MCX case14, the CCI has defined predatory pricing as the conduct, “where a dominant
undertaking incurs losses or foregoes profits in the short term, with the aim of foreclosing its

7
§4, Competition Act, 2002.
8
S M DUGAR, Guide To Competition Law 451 (6th ed. 2016).
9
Abuse of Dominance, COMPETITION BUREAU GOVERNMENT OF CANADA (Oct. 29, 2017, 11:26 PM),
http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00511.html.
10
Provisions related to Abuse of Dominance, Advocacy Series 4, COMPETITION COMMISSION OF INDIA
(Oct. 29, 2017, 05:11 PM), http;//www.cci.gov.in/sites/default/files/advocacy_booklet_document/AOD.pdf.
11
§4(2)(a)(ii), The Competition Act, 2002
12
§4(2)(a)(ii), The Competition
13
Explanation (b), §2(2)(e), The Competition Act, 2002
14
MCX Stock Exchange Ltd v. National Stock Exchange of India Ltd. & Ors., 2011 CompLR 129 (CCI).
 18

competitors.”15 Moreover, a dominant player does not have any need or compulsion to price
below average variable cost, except that it intends to drive out competitors or reduce
competition in the relevant market.16

Now, before proceeding with the conditions of predatory pricing, first let’s look at the pre-
conditions of predatory pricing. Pre-conditions for predatory pricing are as follows17–

i. Dominance in the relevant market

ii. Certain level of entry barrier to prevent competitors to re-enter the market.

iii. Deep pockets of the predator

Further, in the order of M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems
Ltd. 18the Commission held that to decide whether the dominant firm is engaged in the
practice of predatory pricing, the following three conditions have to be satisfied:

i. The prices of the goods or services of the dominant firm is below the cost of
production of such goods or acquisition of such service.

ii. Such decline in the prices of the dominant firm was brought with the intention
of driving the competitors out of the market.

iii. There is a significant planning in order to recover or recoup the losses that are
incurred by increasing the prices again after the competitors are forced out of
the market.
The above conditions are satisfied in our case against Ezbooking.

15
In Re: Johnson And Johnson Ltd., (1988) 64 Comp Case 394; Tetra Pak International SA v. Commissioner,
1994 ECR II-00755.
16
S M Dugar, Guide To Competition Law 451 (6th ed. 2016).
17
S M Dugar, Guide To Competition Law 427 (6th ed. 2016).
18
M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd., Case 09/2013, (CCI).
 19

Prayer

In light of the issues raised, arguments advanced and authorities cited, it is humbly requested
that this Hon’ble Commission may be pleased to –

1. Hold that a cartel indeed exists between the Airline Service Providers and the same

has an appreciable adverse effect on competition.

2. Hold that EzbBooking has abused its dominant position in the market and engaged in

predatory pricing.

3. Pass any further order or orders in favour of the informants and against the Opposite

Parties as this Commission may deem fit.

And pass any other order that it may deem fit in the interest of equity, justice and
good conscience.

ALL OF WHICH IS RESPECTFULLY SUBMITTED.