TEAM CODE – 4

5TH Annual Jindal Moot Court Competition 2022

BEFORE THE HON’BLE COMPETITION COMMISSION OF ARISHEM

FOR COMPETITION IN ARISHEM

UNDER SECTION 19(1)(a)

OF THE ARISHEM COMPETITION ACT, 2002

CASE NO. 1/2022

STARFOX CO-OPERATIVE…….……………………………………………..PETITIONER
VS
CELESTIAL, AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., KINGO PVT. LTD. and
BLACK KNIGHT….…….………………………………………………........RESPONDANTS

MEMORIAL FOR RESPONDANTS

 -Table of Contents-

Table of Contents

INDEX OF AUTHORITIES ................................................................................................ III

LIST OF ABBREVIATIONS .............................................................................................. VI

STATEMENT OF JURISDICTION .................................................................................. VII

STATEMENT OF FACTS ................................................................................................ VIII

QUESTIONS PRESENTED .................................................................................................. X

SUMMARY OF ARGUMENTS .......................................................................................... XI

ARGUMENTS ADVANCED .................................................................................................. 1

1. CELESTIAL HAS NOT ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR
SERVICES PROVIDED BY RETAILERS FOR SELLING TOYS IN ARISHEM’ AND HAS NOT

VIOLATED SECTION 4 (2) (A) AND 4 (2) (C) OF THE ARISHEM COMPETITION ACT.............. 1

1.1. Celestial is not in a dominant position in the ‘market for services provided by
retailers for selling toys in Arishem’ .............................................................................. 1

1.2. Celestial has not violated Section 4 (2) (a) of the Competition Act ................... 1

1.3. Celestial has not committed any action which has resulted in the denial of
market access. ................................................................................................................... 2

2. AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD.
HAVE NOT VIOLATED SECTION 3 (3)(A) OF THE ARISHEM COMPETITION ACT. ................. 3

2.1. The Agreement between Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd.,
and Kingo Pvt. Ltd. was not anti-competitive in nature. ............................................. 4

2.2. The Agreement did not cause any Appreciable Adverse Effect On
Competition (AAEC). ...................................................................................................... 5

2.3. The agreement between the parties was to use a software to increase their
sales and not for the purpose of price fixing.................................................................. 6

3. BLACK KNIGHT HAS NOT FACILITATED CARTELISATION BETWEEN AJAX PVT. LTD.,
ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. IN VIOLATION OF SECTION
3 OF THE ARISHEM COMPETITION ACT. ............................................................................... 7

MEMORIAL for THE RESPONDENT

- (i) -
 -Table of Contents-

4. CELESTIAL HAS NOT FACILITATED CARTELISATION BETWEEN AJAX PVT. LTD.,

ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. IN VIOLATION OF SECTION
3 OF THE ARISHEM COMPETITION ACT. ............................................................................... 8

4.1. The agreement is not anti-competitive in nature ................................................ 9

4.2. The agreement has not caused any Appreciable Adverse Effect on
Competition. ................................................................................................................... 10

PRAYER ................................................................................................................................. 13

MEMORIAL for THE RESPONDENT

- (ii) -
 -Index of Authorities-

INDEX OF AUTHORITIES

Indian Cases

Excel Corp. Care Ltd. v. Competition Commission of India, AIR 2017 SC 2734. ................. 10
In Re: Alleged Cartelisation in Flashlights Market in India, Case No. 01/2017 (CCI) 2018
(India). .................................................................................................................................... 6
In Re: Sugar Mills, Case No.01/2010 (CCI) 2011. .................................................................... 6
In Re: Suo-moto case against LPG cylinder manufacturers, Case No. 03/2011 (CCI) 2012
(India). ................................................................................................................................ 5, 8
M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd, Case No. 09/2013 (CCI)
2014........................................................................................................................................ 2
Mr. Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors, Case No. 80/2014 (CCI) 2014. .... 1
n Re: Alleged Cartelization in the Airlines Industry, 2021 SCC OnLine CCI 3. ...................... 7
NK Natural Foods Pvt. Ltd. v. Akshaya Pvt. Ltd, Case No. 74/2013 (CCI) 2013. .................... 4
Re Delhi Mahavyapar Sangh v. Flipkart Internet Private Limited and Ors, Case No. 40/2019
(CCI) 2019 ............................................................................................................................. 3
Re: Delhi Vyapar Mahasangh V. Flipkart Internet Private Limited and its affiliated entities
And Ors, Case No. 40/2019 (CCI) 2019. ............................................................................... 3
Samir Agarwal v. ANI Technologies Pvt. Ltd., Case No. 37 of 2018 (CCI) (India). ............... 8
Shamsher Kataria v. Honda Seil Cars India Ltd And Ors, Case No. 3/2011 (CCI) 2014 (India)
................................................................................................................................................ 8
Tata Engineering and Locomotive Co Ltd (Telco) v. The Registrar of Restrictive Trade
Agreement, AIR (1977) SC 973 [693]. .................................................................................. 9

Foreign Cases

Case 258/78, L.C. Nungesser KG and Kurt Eisele v. Comm’n of the European Communities,
E.C.R. 1982 -2015 (EU). ..................................................................................................... 10
Case C-279/06, CEPSA Estaciones de Servicio SA v. LV Tobar e Hijos SL, (2008) E.C.R. I-
6681 (EU)............................................................................................................................... 9
Case C-525/16, MEO – Serviços de Comunicações e Multimédia SA v. Autoridade da
Concorrência, ECLI:EU:C:2018:270 (2018) (EU). ............................................................. 11
In Re: Alleged Cartelization in the Airlines Industry, 2021 SCC OnLine CCI 3. ..................... 7
The Competition Act, 2002, No. 12 of 2002, INDIA CODE (1993) ........................................ 8

MEMORIAL for THE RESPONDENT

- (iii) -
 -Index of Authorities-

United States v. Colgate & Co., 250 U.S. 300 (1919) (US). ..................................................... 9

Other Authorities

Carving Out the Evidentiary Standards Under Section 3 (3) via CCI’s Decisional Practise,
Ipleaders (March. 2, 2022) ..................................................................................................... 6
Case T-41/96, Bayer AG v. Commission [2000], ECLI:EU:T:2000:242 (EU). ........................ 6
Daniel Mandrescu, Applying (EU) competition law to online platforms: Reflections on the
definition of the relevant market(s), WORLD COMPETITION LAW AND ECONOMICS REVIEW
.............................................................................................................................................. 12
DG Competition, Discussion Paper on the Application of Article 82 of the Treaty to
Exclusionary Abuses (2005), DISCPAPER .............................................................................. 9
M.M. Sharma, Exclusivity Clauses in Commercial Agreements-Issues under Indian
Competition Law, MONDAQ ................................................................................................... 9
Silpi Bhattacharya and Pankhudi Khandelwal, Indian Competition Law in the Digital
Markets: An Overview of National Case Law, SSRN ......................................................... 12
Thomas Graf and Henry Mostyn, European Union – Access to Online Platforms and
Competition Law, Global Competition Review .................................................................. 10

Reliance Big Entertainment Ltd v. Karnataka Film Chamber of Commerce, CompLR 2012
(CCI) 0269 (India). ................................................................................................................ 7

Tata Engineering and Locomotive Co Ltd (Telco) v. The Registrar of Restrictive Trade
AgreementAIR (1977) SC 973 [693]. .................................................................................... 9

Case C-279/06, CEPSA Estaciones de Servicio SA v. LV Tobar e Hijos SL, 2008 E.C.R. I-
6681 (EU)............................................................................................................................... 9
Case C-525/16, MEO – Serviços de Comunicações e Multimédia SA v. Autoridade da
Concorrência, ECLI:EU:C:2018:270 (EU) .......................................................................... 11
Leegin Creative Leather Products, Inc v. PSKS Inc, 551 U.S. 877 (2007) (US). ..................... 8

SM DUGAR ET. AL.,GUIDE TO COMPETITION LAW (6th ed. Lexisnexis 2016) ............................ 4

Commission’s Notice on the Application of the Competition Rules to Access Agreements in

the Telecommunications Sector (the Access Notice), [1998] O.J. 1998 (C 265/2). ............ 10

MEMORIAL for THE RESPONDENT

- (iv) -
 -Index of Authorities-

DG COMPETITION, DISCUSSION PAPER ON THE APPLICATION OF ARTICLE 82 OF THE TREATY TO

EXCLUSIONARY ABUSES (2005)
https://ec.europa.eu/competition/antitrust/art82/discpaper2005.pdf ...................................... 9

MEMORIAL for THE RESPONDENT

- (v) -
 -List of Abbreviations-

LIST OF ABBREVIATIONS

CCI- Competition Commission of India

SC- Supreme Court of India

EU- European Union

MEMORIAL for THE RESPONDENT

- (vi) -
 -Statement of Jurisdiction-

STATEMENT OF JURISDICTION

With regards to the circumstances that have been presented in the instant case, the Hon’ble
Commission has called for a final hearing of all the parties under Section 19(a) of the Arishem
Competition Act. The respondents Celestial, Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd.,
Kingo Pvt. Ltd. and Black Knight humbly submits to the jurisdiction of Hon’ble Competition
Commission of Arishem in Arishem.

MEMORIAL for THE RESPONDENT

- (vii) -
 -Statement of Facts-

STATEMENT OF FACTS

ARISHEM
1. Arishem is a Republic in South Asia, whose laws are pari materia with the laws of India.
Arishem enacted its competition law, the Arishem Competition Act, in 2002.

PARTIES TO THE DISPUTE

1. Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. who are
established toy manufacturers and retailers in the retail market in Arishem.
2. Celestial is an e-commerce platform who has significant market share among all e-
commerce platforms in Arishem.
3. Black Knight is the creator of an algorithm through which Ajax Pvt. Ltd., Icarus Pvt.
Ltd., Spirite Pvt. Ltd. and Kingo Pvt. Ltd have been fixing the prices of their products.
4. Starfox Co-operative (“Co-Operative”) is a co-operative society formed by the
voluntary association of local toy manufacturers and retailers in Arishem.

DISPUTE
5. Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd. and Kingo Pvt. Ltd. had entered into
an agreement on March 2020 with Celestial to sell their products on its platform due to
the temporary lockdown imposed over Arishem due to the pandemic. These parties paid
20% commission to Celestial instead of the usual 15% for providing specific assistance
and service.
6. The ‘Black Knight’ algorithm was bought by Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite
Pvt. Ltd. and Kingo Pvt. Ltd. individually in order to fix the prices of their products to
compete among each other in the market.
7. Starfox Co-operative had also listed their products on Celestial from January 2021 but
after two months it was spotted that none of their products were listed on the first few
pages of any search results for toys and the more expensive products of Ajax Pvt. Ltd.,
Icarus Pvt. Ltd., Spirite Pvt. Ltd. and Kingo Pvt. were displayed before their products.
When asked for similar treatment from Celestial, it was denied to Starfox Co-operative
as the listing was done on the basis of user rating and not the prices of products. Feeling
aggrieved by this, Starfox Co-operative filed an information to the Competition
Commission of Arishem (CCA) alleging that Celestial had abused its dominant position
by discriminating them against other toy manufacturers and had constructively denied

MEMORIAL for THE RESPONDENT

- (viii) -
 -Statement of Facts-

market access.

INVESTIGATION BY THE DIRECTOR GENERAL

8. The CCA directed the Office of the Director General ‘DG office’ to conduct an
investigation. The ‘DG office’ stated that an agreement had taken place between Ajax
Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. after an annual meet of
South Asian toy manufacturers in 2018 because of which these parties had implemented
price tracking algorithm and priced all their products similarly with negligible
difference. Besides this, the ‘DG office’ observed that Celestial had not abused its
dominant position but had facilitated the cartelisation between Ajax Pvt. Ltd., Icarus
Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. on its platform. The ‘DG Office’ also
held that the Black Knight has also facilitated the cartel between these parties by
providing the software which priced the products of one of the four manufacturer lower
than the prices of the products offered by the other three and this happened on a rotation
basis. The CCA has called all parties involved for the final hearing.

MEMORIAL for THE RESPONDENT

- (ix) -
 -Questions Presented-

QUESTIONS PRESENTED

THE OPPOSITE PARTY HAS PLACED BEFORE THIS HONOURABLE COMMISSION , THE

FOLLOWING ISSUES FOR ITS CONSIDERATION:

I) Whether Celestial abused its dominant position in the ‘market for services provided by
retailers for selling toys in Arishem’ in violation of Section 4 (2) (a) and 4 (2) (c) of the
Competition Act?
II) Whether Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. are in
violation of Section 3 (3)(a) of the Competition Act?
III) Whether Black Knight has facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt.
Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem
Competition Act?
IV) Whether Celestial has facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt. Ltd.,
Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem
Competition Act?

MEMORIAL for THE RESPONDENT

- (x) -
 -Summary of Arguments-

SUMMARY OF ARGUMENTS

1. CELESTIAL HAS NOT ABUSED ITS DOMINANT POSITION IN THE

‘MARKET FOR SERVICES PROVIDED BY RETAILERS FOR SELLING
TOYS IN ARISHEM’ AND HAS NOT VIOLATED SECTION 4 (2) (a) AND 4 (2)
(c) OF THE ARISHEM COMPETITION ACT.
It is submitted that Celestial has not abused its dominant position and has not violated
Section 4 (2) (a) and 4 (2) (c) of the Competition Act because Celestial is not in a
dominant position in the ‘market for services provided by retailers for selling toys in
Arishem’, Celestial has not violated Section 4 (2) (a) of the Competition Act and
Celestial has not committed any action which has resulted in the denial of market
access.

2. AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO
PVT. LTD. HAVE NOT VIOLATED SECTION 3 (3)(a) OF THE ARISHEM
COMPETITION ACT.
It is submitted that Celestial’s act was discriminatory under Section 4 (2)(a) of the
Arishem Competition Act and also denied market access for Starfox Co-operative.

3. BLACK KNIGHT HAS NOT FACILITATED CARTELISATION BETWEEN

AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO
PVT. LTD. IN VIOLATION OF SECTION 3 OF THE ARISHEM
COMPETITION ACT.
It is submitted that Black Knight has not violated Section 3 of the Arishem Competition
Act (“Competition Act”), 2002 because its conduct was not anti-competitive in nature
as there was no prior agreement of Black Knight with Icarus Pvt. Ltd., Spirite Pvt. Ltd.,
and Kingo Pvt. Ltd.

4. CELESTIAL HAS NOT FACILITATED CARTELISATION BETWEEN AJAX

PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD.
IN VIOLATION OF SECTION 3 OF THE ARISHEM COMPETITION ACT.
It is submitted that Celestial did not violate Section 3(4)(d) of the Arishem Competition
Act because the vertical agreement is not anti-competitive in nature and the said
agreement has not caused any AAEC.

MEMORIAL for THE RESPONDENT

- (xi) -
 -Arguments Advanced-

ARGUMENTS ADVANCED

1. CELESTIAL HAS NOT ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR SERVICES
PROVIDED BY RETAILERS FOR SELLING TOYS IN ARISHEM’ AND HAS NOT VIOLATED

SECTION 4 (2) (a) AND 4 (2) (c) OF THE ARISHEM COMPETITION ACT.

It is our humble submission before the Hon’ble Commission that Celestial has not abused its
dominant position in the ‘market for services provided by retailers for selling toys in Arishem’
and has not violated Section 4 (2) (a) and 4 (2) (c) of the Competition Act because Celestial is
not in a dominant position in the ‘market for services provided by retailers for selling toys in
Arishem’ [1.1.], Celestial has not violated Section 4 (2) (a) of the Competition Act [1.2.] and
Celestial has not committed any action which has resulted in the denial of market access [1.3].

1.1. Celestial is not in a dominant position in the ‘market for services provided by
retailers for selling toys in Arishem’

It is submitted that Celestial holds large portion of the e-commerce market, but is not
dominant in the relevant market as there are other players like Ajax Pvt. Ltd., Icarus
Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. selling same range of products in
Arishem1. No particular platform has dominant position in the toy market as described
under Section 4 of the Competition Act. In case of Mr. Mohit Manglani v. M/s Flipkart
India Pvt. Ltd. & Ors, it was alleged that an arrangement for exclusive sale of a book
was destroying the other players in the physical market and was thus anti-competitive2.
CCI adjudged that a selective plan between a maker and an e-gateway would not make
any entry obstructions since products sold via online portals face competitive
constraints3. Therefore, presence of competitive portals in the relevant market negates
possibility of any particular player namely, Celestial holding dominant position in the
market.

1.2. Celestial has not violated Section 4 (2) (a) of the Competition Act

Many companies and firms give heavy discounts to attract customers and clients. But
some entities give major discounts in order to eliminate competition. Because local and

1
Moot Proposition, ¶ 5.
2
Mr. Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors, Case No. 80/2014 (CCI) 2014.
3
Id.

MEMORIAL for THE RESPONDENT

- (1) -
 -Arguments Advanced-

small entities would not be able to match the pricings. In this process, the entity which
engages in predatory prices takes heavy losses to attract customers and eliminate the
competition. But not all discounts can be considered to be predatory or unfair pricing.
One of the essential elements of predatory pricing is that the cost price of the product
is higher than the selling price which is the reason for losses. Also, predatory or unfair
pricing can be done only by firms or entities in a dominant position. There are 3 major
conditions to check if a firm or entity is practicing predatory pricing are the selling price
should be lower than the cost of production and distribution; such predatory pricing
should be done with the intention to remove competitors from the market; and there
should be a plan to recover the losses which have been suffered due to predatory
pricing4.

In the present case Celestial is very popular amongst the masses because it has a great
interface and offers lucrative discounts5. But these discounts do not amount to predatory
pricing. This is because Celestial uses its own complex software to determine prices
and carry out listing6. Also, Celestial has no motive to remove competitors from the
market as in the toy market, they have exclusive deals with all the 4 major players. It
would be of very little to no use to suffer heavy losses to remove the small and local
toy companies. Further, Celestial has not increased its prices massively which it would
have done if they were following predatory pricing to recover the losses. Also, since
Celestial is not in a dominant position, any actions taken by it cannot be considered as
predatory pricing.

1.3. Celestial has not committed any action which has resulted in the denial of
market access.

Denial of market access means that you restrict the potential market size of a competitor.
In our case, the petitioners have claimed that Celestial is denying them market access. This
claim is completely false and without any backing. Their claim is that their products are
not visible on the first few pages of Celestial’s website. The reason behind this is that
Celestial has its own complex software which controls the listing on the basis of price, user

4
M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd, Case No. 09/2013 (CCI) 2014.
5
Moot Proposition, ¶ 8.
6
Moot Proposition, ¶ 12.

MEMORIAL for THE RESPONDENT

- (2) -
 -Arguments Advanced-

ratings and performance7. The reason that the petitioner’s products are not being found on
the first few pages is that the products of that Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt.
Ltd., and Kingo Pvt. Ltd. are getting better user ratings and performing better on celestial’s
website. Celestial does not deliberately push the petitioner’s products to later pages. The
position of listing is determined by its complex software. Furthermore, the petitioners have
claimed that by giving 20% commission instead of 15%, Celestial is showing preferential
treatment towards Ajax Pvt. Ltd.8., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd.
But this is not true. It is legal to have exclusive agreements with other entities9. Such
exclusive agreements are valid as long as they are not anti-competitive in nature or affecting
other competitors10.

In our case these exclusive deals are not negatively affecting the competition, rather it is
Celestial’s Software, because of which the products of the petitioners are not being shown
on the first few pages and while searching for toys.

In sum, Celestial neither occupies any dominant position in the market for online platform in
Arishem nor does has abused its dominant position under the Section 4 of the Competition A

2. AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. HAVE NOT
VIOLATED SECTION 3 (3)(a) OF THE ARISHEM COMPETITION ACT.

It is our humble submission before the Hon’ble Commission that Ajax Pvt. Ltd., Icarus Pvt.
Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. have violated Section 3 (3)(a) of the Arishem
Competition Act (“Competition Act”), 2002 because the agreement between the parties
was not anti-competitive in nature [1.1.], the agreement did not cause any Appreciable
Adverse Effect On Competition (AAEC) [1.2.] and C) the agreement between the parties
was to use a software to increase their sales and not for the purpose of price fixing [1.3].

7
Id.
8
Moot Proposition, ¶ 19.
9
Re Delhi Mahavyapar Sangh v. Flipkart Internet Private Limited and Ors, Case No. 40/2019 (CCI) 2019.
10
Re: Delhi Vyapar Mahasangh V. Flipkart Internet Private Limited and its affiliated entities And Ors, Case No.
40/2019 (CCI) 2019.

MEMORIAL for THE RESPONDENT

- (3) -
 -Arguments Advanced-

2.1. The Agreement between Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and
Kingo Pvt. Ltd. was not anti-competitive in nature.

An Anti-competitive Agreement is an Agreement which is made between competitors

to prevent, restrict or distort competition. Section 3 of the Competition Act lays out
various categories of anti-competitive agreements such as agreements with the intent to
fix prices, create barriers for new entrants, drive current players out of the market or
negatively affect the interests of the consumer. However, there are a few agreements
which are an exception under this Section. If an agreement aims at increasing the
efficiency of supply, distribution or improving the quality of the product or service,
such agreement is not anti-competitive11. Furthermore, if an agreement leads to the
benefit of the consumers or compensates them for any negative impact, then such
agreements are also not anti-competitive in nature. Also, it is not wrong to form an
agreement. The agreement becomes illegal and void only if it causes Appreciable
Adverse Effect On Competition (AAEC)12.
In our case at hand, Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt.
Ltd. entered into an agreement to use an algorithm that would help them increase their
sales. The use of an advanced software to boost their sales would, in turn, increase their
revenue which would help them improve the quality of their products and service13. The
software also allows the companies to give various discounts, which is a great benefit
to the consumer. The sole intent of the agreement was to give a boost to their sales as
they had suffered huge losses due to the pandemic and their individual sites were not
doing very well14. There was no common intention to act in a way or take any step
which would be anti-competitive in nature. Since there was no meeting of minds to
perform an act which would harm or deter competition, the agreement made was
anti-competitive in nature. Furthermore, while listing their products on Celestial, they
all agreed that celestial would use its own complex software to list their products15.
They also agreed to pay a commission to celestial for listing their products. Hence,
there is no hint of an anti-competitive agreement or price-fixing as even after the
agreement, the products of Starfox Cooperative were being listed on Celestial,

11
SM Dugar ET. AL., GUIDE TO COMPETITION LAW (6th ed. Lexis Nexis 2016).
12
NK Natural Foods Pvt. Ltd. v. Akshaya Pvt. Ltd, Case No. 74/2013 (CCI) 2013.
13
Moot Proposition, ¶ 11.
14
Moot Proposition, ¶ 7.
15
Moot Proposition, ¶ 12.

MEMORIAL for THE RESPONDENT

- (4) -
 -Arguments Advanced-

sometimes at a lower price than those of Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt.
Ltd., and Kingo Pvt. Ltd.16. Also, there is no AAEC because of the agreement as found
in the next paragraph, so the agreement is completely legal and not at all anti-
competitive.
On the basis of the above, the conduct or action of the parties signify that the agreement
between the parties was not anti-competitive in nature.

2.2. The Agreement did not cause any Appreciable Adverse Effect On Competition
(AAEC).

Appreciable Adverse Effect On Competition (AAEC) occurs when due to the action of
an enterprise or a firm or firms, there is a restriction on competition and other (mostly
smaller or local) competitors have to face a negative effect. According to Section 19
(3) of the Arishem Competition Act, while deciding whether an agreement has an
Appreciable Adverse Effect On Competition, the Competition Commission of Arishem
must take note of the following factors, i.e., 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; accrual of benefits to consumers; improvements in
production or distribution of goods or provision of services; promotion of technical,
scientific and economic development by means of production or distribution of goods
or provision of services17.
Apart from these factors mention in Section 19 of the Arishem Competition Act, it is
observed that other factors like market conditions, trade associations, limited suppliers,
lack of new entrants also affect how an agreement affects the competition. These factors
are called facilitating factors or plus factors and must be considered while deciding if
there is presence of AAEC or formation of a cartel18.

In the case at hand, the agreement between Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt.
Ltd., and Kingo Pvt. Ltd. did not cause any Appreciable Adverse Effect On Competition
(AAEC). Regarding the accrual of benefits to consumers, this Agreement, by giving
various discounts has largely benefitted the consumer. By using a complex software,
‘Black Night’, the agreement aims to promote technical and scientific developments19.

16
Moot Proposition, ¶ 14.
17
The Competition Act, Section 19.
18
In Re: Suo-moto case against LPG cylinder manufacturers, Case No. 03/2011 (CCI) 2012 (India).
19
Moot Proposition, ¶ 11.

MEMORIAL for THE RESPONDENT

- (5) -
 -Arguments Advanced-

The claim that the agreement is denying market access to Starfox Cooperative is
absolutely false. The claim of Starfox- Cooperative that their products are not seen on
the first few pages because of collusion between Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite
Pvt. Ltd., and Kingo Pvt. Ltd. and Celestial has no substantial evidence. These 4
companies together held 85% of the toy market20. Even though, they suffered huge
losses because of the pandemic, they still held major share in the toy market. The reason
that the products of Starfox Cooperative were not being listed on the first few pages of
Celestial is because Celestial has its own complex software which determines the listing
position based in the price and user ratings. This is why the products of 4 companies
were listed higher as they were of better quality and had better user ratings.
On the basis of the above arguments, it can clearly be seen that The Agreement did not
cause any Appreciable Adverse Effect On Competition (AAEC).

2.3. The agreement between the parties was to use a software to increase their sales
and not for the purpose of price fixing.

Price fixing occurs when the price of a commodity is fixed in order to gain a wrongful
advantage over competition. An essential feature of price fixing is that there must be a
prior agreement with a clear intent to fix prices21. There must be a meeting of minds of
the parties involved to form an agreement with the intent to fix prices22. Also, according
to the European Commission, the standard of evidence to determine price fixing and
cartels must be ‘firm, precise and consistent23’. It must be clearly shown that the fixing
of prices was done through the agreement. There must be a ‘concurrence of wills’
between the parties to fix prices24. Using an algorithm to determine and fix prices is not
wrong or illegal. It only becomes illegal when there is collusion in order to set high
prices and wrong the consumer. Also, the knowledge, that an act is being done is an
important feature in fixing prices.
In the case at hand, there is no intention to fix prices while making the agreement. The
companies in the agreement have used the software ‘Black Knight’ to determine their

20
Moot Proposition, ¶ 5.
21
In Re: Alleged Cartelisation in Flashlights Market in India, Case No. 01/2017 (CCI) 2018 (India).
22
In Re: Sugar Mills, Case No.01/2010 (CCI) 2011.
23
Carving Out the Evidentiary Standards Under Section 3 (3) via CCI’s Decisional Practise, Ipleaders (March. 2,
2022), https://blog.ipleaders.in/carving-evidentiary-standards-section-33-via-ccis-decisional-practice.
24
Case T-41/96, Bayer AG v. Commission [2000], ECLI:EU:T:2000:242 (EU).

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prices25. There is no meeting of minds for fixing prices. Also, there is not enough
evidence to show that the companies entered into the agreement in order to fix prices
and gain wrongful advantage over their competition. Also, most of their sales is being
done through Celestial, who uses a different software to determine prices and listing.
On Celestial, the 4 major companies and Starfox Cooperative have to go allow the use
of Celestial’s own software26. Thus, the major use of Black Knight is to keep track of
the prices of competitors and to determine the prices accordingly. It also allows the
companies to give various discounts to the consumers. Furthermore, instead of
increasing the prices and negatively affecting the consumer, this agreement allows for
the above-mentioned discount which gives the consumer different options to buy. Also,
the prices are not very low so as to be anti-competitive. We can see this because many
of Starfox Cooperative’s products are listed at a lower price when compared to the
products of Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd27.
On the basis of the above, we find that the agreement between the parties was to use a
software to increase their sales and not for the purpose of price fixing.
In sum, Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. have not violated
Section 3 (3)(a) of the Arishem Competition Act.

3. BLACK KNIGHT HAS NOT FACILITATED CARTELISATION BETWEEN AJAX PVT. LTD.,
ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. IN VIOLATION OF SECTION
3 OF THE ARISHEM COMPETITION ACT.

It is our humble submission before the Hon’ble Commission that Black Knight has not violated
Section 3 of the Arishem Competition Act (“Competition Act”), 2002 because its conduct was
not anti-competitive in nature as there was no prior agreement of Black Knight with Icarus Pvt.
Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd.
The CCI has established that for an act to fall within the ambit of Section 3 of the Arishem
Competition Act, there must be an agreement between two or more parties.28 An agreement
always envisages two or more parties or enterprises.29 The CCI states that a hub and spoke

25
Moot Proposition, ¶ 11.
26
Moot Proposition, ¶ 12
27
Moot Proposition, ¶ 14.
28
In Re: Alleged Cartelization in the Airlines Industry, 2021 SCC OnLine CCI 3.
29
Reliance Big Entertainment Ltd v. Karnataka Film Chamber of Commerce, CompLR 2012 (CCI) 0269 (India).

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could not exist in cases where there was no agreement to set prices through the platform, or
any agreement for the platform to coordinate prices between the parties.30
In the instant case, the said algorithm was brought from Black Knight by Ajax Pvt. Ltd. and
the parameters about setting the way of the algorithm was such that on a rotational basis, the
products of one of the four manufacturers would be priced lower than the products of other
three manufacturers for a period of two months was demanded only by Ajax Pvt. Ltd.31 No
prior horizontal and vertical agreement took place between Black Knight and Icarus Pvt. Ltd.,
Spirite Pvt. Ltd., and Kingo Pvt. Ltd. which would make them aware about the cartelization
between Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. As a result,
Black Knight was only aware of their agreement with Ajax Pvt. Ltd. where they sold their
algorithm to it. Moreover, listing of products in the market involved in this case, i.e., the
Celestial platform was based on a complex algorithm which took into account various factors
such as price, user rating, etc so as a result usage of the ‘Black Knight’ algorithm for pricing
the products will not have any effect upon the listing of products.
Black Knight develops its algorithms for manufacturers and brands to help them better price
their products in a market without affecting the competition. In this case, if Black Knight knew
that their algorithm was being deployed through a hub and spoke agreement which would
facilitate cartelization and create anti-competitiveness in the market, they would have never
done so.
In sum, Black Knight has not facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt. Ltd.,
Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem Competition Act.

4. CELESTIAL HAS NOT FACILITATED CARTELISATION BETWEEN AJAX PVT. LTD., ICARUS
PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. IN VIOLATION OF SECTION 3 OF
THE ARISHEM COMPETITION ACT.

It is our humble submission before the Hon’ble Commission that Section 3(4)(d) of the
Arishem Competition Act deals with ‘exclusive supply agreement’. Agreement under Section
3(4) will be in violation of Section 3(1) only if it causes Appreciable Adverse Effect on
Competition [“AAEC”].32 The per se rule is not applicable to this case33 and the rule of reason

30
Samir Agarwal v. ANI Technologies Pvt. Ltd., Case No. 37 of 2018 (CCI) (India).
31
Moot Proposition, ¶ 11.
32
The Competition Act, 2002, No. 12 of 2002, INDIA CODE (1993)Section 3 (4) r/w Section 19 (3); Shamsher
Kataria v. Honda Seil Cars India Ltd And Ors, Case No. 3/2011 (CCI) 2014 (India).
33
Leegin Creative Leather Products, Inc v. PSKS Inc, 551 U.S. 877 (2007) (US).

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must be adopted.34 The pro-competitive and anti-competitive effects are examined from the
facts of each case.35
It is submitted that Celestial did not violate Section 3(4)(d) of the Arishem Competition Act
because first, the vertical agreement is not anti-competitive in nature [4.1.]; and second, the
said agreement has not caused any AAEC [4.2].

4.1. The agreement is not anti-competitive in nature

It is submitted that 3+’s liability under Section 3(4) for ‘exclusive supply agreement’
does not hold water. Exclusive supply agreement between different companies concern
creation of barriers for new entrants in the market, driving existing competitors out of
the market and foreclosure of competition by creating barriers against entry into the
market.36 As a result, if such agreement has to occur, the seller has to degrade in its
position due to a lower annual turnover as the other competitors will choose other
sellers as the market is highly competitive.37
In the instant case, it has been alleged that Celestial has charged 20% commission
instead of usual 15% from Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd. and Kingo
Pvt. Ltd. to preserve their cartel and make an ‘exclusive supply agreement’.38 However,
this extra commission was taken by Celestial in turn for providing specific assistance
and service to Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. to
improve and maintain ratings. Celestial uses its own complex algorithm to list products
in its platform which does not involve any form of cartelization.
Furthermore, there are various platforms other than Celestial in the market with whom
Celestial is in a constant fight to occupy the dominant position. In such circumstances,
an ‘exclusive supply agreement’ will result in various manufacturers and retailers
leaving the Celestial platform and listing their products on the other platforms which in

34
Tata Engineering and Locomotive Co Ltd (Telco) v. The Registrar of Restrictive Trade Agreement, AIR (1977)
SC 973 [693].
35
Case C-279/06, CEPSA Estaciones de Servicio SA v. LV Tobar e Hijos SL, (2008) E.C.R. I-6681 (EU).
36
M.M. Sharma, Exclusivity Clauses in Commercial Agreements-Issues under Indian Competition Law,
MONDAQ, https://www.mondaq.com/india/antitrust-eu-competition-/977026/exclusivity-clauses-in-commercial-
agreements-issues-under-indian-competition-law.
37
DG Competition, Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses
(2005), DISCPAPER https://ec.europa.eu/competition/antitrust/art82/discpaper2005.pdf (Last visited Jan. 17,
2020); United States v. Colgate & Co., 250 U.S. 300 (1919) (US).
38
Moot Proposition, ¶ 19.

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turn will lead to generation of lower annual revenue as well as the loss of a great amount
of market position of Celestial.
Thus, the action of Celestial does not fall in the realm of ‘exclusive supply agreement’
and as such the said agreement is not anti-competitive in nature.

4.2. The agreement has not caused any Appreciable Adverse Effect on Competition.

For an ‘exclusive supply agreement’ to be prohibited under the provisions of Arishem

Competition Act, it should cause or can be likely to cause an AAEC in the relevant
market.39 Under Section 19(3), the Arishem Competition Act specifies certain
conditions to assess the net effect40 by considering the negative and positive effects on
the market. The essential aspects of ‘exclusive supply agreement’ are: first, market
access must be indispensable for rivals to compete; second, it must a risk of eliminating
all competition in the market and last, there must be no objective justification for the
same.
In view of the above, we humbly submit that neither was the 20% commission taken to
preserve the cartel formed by Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and
Kingo Pvt. Ltd. [4.2.1.]; nor did Celestial hinder the competition in the relevant market
[4.2.2.]; Further, Celestial has justification regarding the listing of products in its
platform [4.2.3.].

4.2.1. The 20% commission taken to preserve the cartel formed by Ajax Pvt. Ltd.,
Icarus Pvt. Ltd., Spirite Pvt. Ltd. and Kingo Pvt. Ltd.

Cartelization is a process by which a group of independent companies join

together to fix prices, to limit production or to share markets or customers
between them.41 It is inevitable that an online platform would be at a more
disadvantageous position if it denies access to other companies on its platform.42

39
The Competition Act, supra note 1, Section 3 (4).
40
Case 258/78, L.C. Nungesser KG and Kurt Eisele v. Comm’n of the European Communities, E.C.R. 1982 -
2015 (EU).
41
Excel Corp. Care Ltd. v. Competition Commission of India, AIR 2017 SC 2734.
42
Thomas Graf and Henry Mostyn, European Union – Access to Online Platforms and Competition Law, Global
Competition Review, https://globalcompetitionreview.com/guide/e-commerce-competition-enforcement-
guide/third-edition/article/european-union-access-online-platforms-and-competition-law. (Last visited:
03/03/2022).

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Here, in this case, it has already been established that 20% commission was
taken by Celestial to Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and
Kingo Pvt. Ltd. to improve and maintain ratings as they basically relied on
traditional brick and mortar market previously. Admittedly, Ajax Pvt. Ltd.,
Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. have a market share of
85% among brick and mortar market retailers of toys in Arishem so they had a
great importance in the toy segment.
Thus, proving them assistance would have helped Celestial earn more revenue
due to the quality and availability of their products without hindering any
competition between them and other manufacturers or retailers.

4.2.2. The charging of more commission did not hinder competition in the relevant
market.

It is submitted that Celestial’s conduct did not hinder competition as the said
agreement did not cause any negative impact on the market. Every disadvantage
will not be considered anticompetitive.43 For a negative effect on competition,
an enterprise should have the ability to engage in conduct that excludes
competition and is able to influence the relevant market in its favour.44
However, in the instant case, the market is highly competitive as a large number
of companies are involved in the race of occupying a dominated position in the
online market.45 Arishem had welcomed internet proliferation in the year 2018
due to which many local online platforms have also come into the market.46
Celestial’s conducts of charging more commission was only for providing
specific assistance and service and to hinder the competition in its platform.
Thus, the agreement cannot be censured for pushing competitors out of the
market.

4.2.3. Celestial has justification regarding the listing of products in its platform.

43
Case C-525/16, MEO – Serviços de Comunicações e Multimédia SA v. Autoridade da Concorrência,
ECLI:EU:C:2018:270 (2018) (EU).
44
Shamsher Kataria, supra note 5.
45
Ibid.
46
Moot Proposition, ¶ 18.

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It is submitted that online market platforms lists their products in their platforms
based on sale and user ratings.47 This not only helps the consumers to select best
and cheap products but also help these platforms generate a great revenue due
to large number of sales.48
In the instant case, algorithm deployed by Celestial placed the products on the
basis of user ratings. As Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and
Kingo Pvt. Ltd. we’re selling their products on Celestial since March 2020, it
had already sold a good number of products and had got a significant number
of user ratings from the consumers. Whereas, in the case of Starfox Co-
operative, who were selling their products since January 2021, a good number
of user ratings was not generated due to which even the more expensive
products of Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt.
Ltd. with higher user rating than Starfox Co-operative were listed above.
Moreover, Starfox Co-operative had demanded similar treatment regarding
listing of products, i.e., listing their and other toy manufacturers’ products along
with Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd.
according to the price. This is not possible as Celestial’s algorithm only lists
their products based on user rating and this must have already been stated to
Starfox Co-operative during negotiation of the agreement between them and
Celestial. If Starfox Co-operative would have demanded specific assistance and
service to improve and maintain ratings, they would have got that by giving a
more commission to Celestial but in this case the conduct by Celestial did not
discriminate Starfox Co-operative or any other toy manufacturers and retailers.
Thus, Celestial justifiable reasons about the listing of products in its platform as
it did not result in any anti-competitiveness in the market.

In sum, Celestial has not facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt. Ltd.,
Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem Competition Act.

47
Daniel Mandrescu, Applying (EU) competition law to online platforms: Reflections on the definition of the
relevant market(s), WORLD COMPETITION: LAW AND ECONOMICS REVIEW, Vol. 41, No. 3 (2018).
48
Silpi Bhattacharya and Pankhudi Khandelwal, Indian Competition Law in the Digital Markets: An Overview
of National Case Law, SSRN (2021), https://ssrn.com/abstract=3897291 (Last visited: 01/03/2022).

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PRAYER

Wherefore in the light of the issues raised, arguments advanced and authorities cited, it is most
humbly prayed that this Hon’ble Commission may be pleased to adjudge and declare:

1. That Celestial has not abused its dominant position in the ‘market for services provided
by retailers for selling toys in Arishem’ and has not violated Section 4 (2) (a) and 4 (2)
(c) of the Arishem Competition Act.
2. That Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. have not
violated Section 3 (3)(a) of the Arishem Competition Act.
3. That Black Knight has not facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt.
Ltd., Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem
Competition Act.
4. That Celestial has not facilitated cartelisation between Ajax Pvt. Ltd., Icarus Pvt. Ltd.,
Spirite Pvt. Ltd., and Kingo Pvt. Ltd. in violation of Section 3 of the Arishem
Competition Act.

And pass any other order that this Hon’ble Commission may deem fit in the interests of
justice, equity and good conscience.

All of which is most humbly prayed.

Sd/-

Respectfully submitted on March 4, 2022.

--------------------------

On Behalf of the Respondents,

Celestial, Ajax Pvt. Ltd., Icarus Pvt. Ltd., Spirite Pvt. Ltd., Kingo Pvt. Ltd. and Black Knight

COUNSEL FOR THE RESPONDANTS

MEMORIAL for THE RESPONDENT

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MEMORIAL for THE RESPONDENT

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