MOOT COURT COMMITTEE

NATIONAL LAW UNIVERSITY, JODHPUR

THE TWELFTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2021

BENCH MEMORIAL

© Moot Court Committee

mootcourtcommittee.nluj@gmail.com
FACTS IN BRIEF : Genovia is a country which is trying to become self-reliant in the field of
Information Technology. As part of this, they have set up a new ministry called the Department
of Technological Development (“DOTD”) in 2016. On DOTD’S recommendation, the
government set up a statutory corporation named Vijeta Tech Instruments Limited (“Vijeta”),
funded and controlled by the government. In 2018, Vijeta introduced its high quality and low
cost flagship device called the “Mango”. Though the phones were affordable, the accessories,
spare parts and after- sales services were very expensive, as compared to the other products in
the market. The mobile phones were being distributed through an omni-channel system where
Vijeta sold through self-owned stores called the ‘Mango Tree’ franchisees and multi-brand
outlets. In order to maintain consistency in quality, Vijeta maintained uniform rates through all
channels of distribution, and provided franchise and multi brand outlets a list for recommended
discounts (this contained upper limits of discounts). Several media reports stated such non-
adherence to discount limits resulted in unilateral termination of the agreement by Vijeta. Vijeta
sought to maintain exclusivity of its products. It barred consumers from using other brand
accessories and spare parts of the phones or servicing their phones at stores other than its
authorised stores and the warranty of the production was conditional on this criteria. Similarly, it
prevented its distributors from selling products of other brands. In 2019, Vijeta introduced an
application called the ‘Offix’ that provided for a wide range of services like document editing and
note taking. As a promotional scheme, Vijeta provided the application for free on all Mango
phones for twelve months. At the time of entry of Offix, market leaders like Macrosoft and
Froogle had already a market share of 45% and 31% respectively, despite which Vijeta gained a
subscription base of 32% within six months of entry.

Present matter : Nikita Iyer, a customer of Mango has filed an information about Vijeta’s anti-
competitive practices. DOTD has also been questioned for providing instructions to Vijeta to
only pre-install Genovian applications and provide suggestions of only Genovian applications on
the app store. This is debated to be a part of the DOTD’s goal to promote the IT industry.
Thus, on the basis of this, CCG has decided to hold a preliminary conference to hear both
parties in this matter.

PARTIES : Nikita Iyer (“Informant”) and Vijeta Tech Instruments Ltd. (“Vijeta”) & Department
of Technological Development (“DOTD”) collectively (“Opposite Parties”)

RELEVANT FORUM : Competition Commission of Genovia

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JURISDICTION : The information has been submitted to the Competition Commission of
Genovia (“CCG”) by Ms. Nikita Iyer (“Informant”), under section 19(1)(a) of the Competition
Act, 2002 (“Competition Act”).
OTHER IMPORTANT POINTERS :

1. The laws of Genovia are pari materia with the laws of India,

2. Genovia passed its competition law statute, the Competition Act in 2002, which was
enforced in a phased manner, with its enforcement provisions enforced in 2009 and its
last provisions came into force in 2011.

3. The CCG regards the decisions of the Competition Commission of India to have high
persuasive value. It also places reliance on the established principles and the anti-trust
regulators in the European Union and the United States of America.

3
 ISSUES

A. The information alleged contravention of section 3 and 4 of the Competition Act and
specifically :

I. Whether the Vijeta has contravened Section 3(4) read with Section 3(1) of the
Competition Act?
II. Whether Vijeta has contravened Section 4(2) of the Competition Act?
III. DOTD has contravened Section 4(2) of the Competition Act ?

B. Potential arguments that can be made by the participants:

ARGUMENTS FOR ISSUE I

Issue: Whether the Vijeta has contravened Section 3(4) read with Section 3(1) of the
Competition Act?

GENERAL LAW
[Note: Participants from either side may rely on the general law since it is common to both the sides.
They can however, interpret it in a manner that supports their side.]
● The Indian law on anti-competitive agreements is structured in a three-fold manner. First, Section 3(1) of
the Act contains a general prohibition on all agreements that cause/likely to cause an appreciable adverse
effect on competition (“AAEC”) in India. Second, Section 3(3) of the Competition Act declares that
horizontal agreements between competitors in the nature of price-fixing, limitation of output, market
sharing or bid rigging will be presumed to cause an AAEC. Third, under Section 3(4), vertical agreements
will be assessed on a ‘rule of reason’ approach to ascertain whether they cause or are likely to cause an
AAEC in India.

● Section 3(4) : Vertical agreements in respect of production, supply, distribution, storage, sale or price of,
or trade in goods or provisions of services will be anticompetitive if they have ‘appreciable adverse effect
on competition’ as per under Section 3(4) and Section 19(3) of the Competition Act. There are five types
of vertical agreements mentioned in the act which cause AAEC. These are: (a) Tie-in arrangement; (b)
Exclusive supply agreement; (c) Exclusive distribution agreement; (d) Refusal to deal; and (e) Resale price
maintenance. This list is merely indicative and not exhaustive. For agreements to be anti-competitive
under Section 3(4)(a) five ingredients should be satisfied :
- There must be an agreement amongst enterprises or persons;

4
 -The parties to such agreement must be at different stages of production chain;
- In respect of production, supply, distribution, storage , sale or price of, or trade in goods or provision of
service, the agreeing parties must be in different market;
- The agreement should cause or likely to cause AAEC; and
- The agreement should be of one of the mentioned types of agreement mentioned under the Act.
● Prima Facie Case : Based on the material available to it, if the Commission makes an opinion that a prima
facie case exists, it will direct the DG to investigate the matter under Section 26(1) of the Competition
Act. Once the Commission takes cognisance of a matter, it must form a prima facie opinion whether
there has been a violation of Section 3 of the Competition Act. If the Commission is of the opinion that
there exists a prima facie case, it will direct the DG to commence a detailed investigation into the matter.
Before the formation of its prima facie opinion, the Commission may, if it deems this necessary, call the
informant or any other person for a preliminary conference (hearing) to form an opinion on whether a
prima facie case exists. If the commission is of the opinion that no prima facie case exists, it will close the
matter and pass such orders as it deems fit.

SPECIFIC ARGUMENTS FOR THE INFORMANT SPECIFIC ARGUMENTS FOR THE OTHER PARTIES

I. VIJETA HAS CONTRAVENED SECTION 3(4) I. VIJETA HAS NOT CONTRAVENED SECTION 3(4)
READ WITH SECTION 3(1) OF THE READ WITH SECTION 3(1) OF THE

COMPETITION ACT COMPETITION ACT

Contravention of Section 3(4) of the Competition In order to establish contravention of Section 3(4) of
Act can be established as there in an agreement the Competition Act, The CCG has to show that the
between the enterprises which operate on arrangements between the entities causes AAEC in
different levels of production [A] and such the market on the basis of the factors provided in
agreements between the enterprises is likely to Section 19(3) of the Competition Act. There is no
cause AAEC to the market. [B] contravention of the Competition Act as the
A. Presence of Agreement between agreements related to supply and distribution do not
enterprises operating at different levels cause AAEC [A], and the de-minimis doctrine applies
of production in the present case. [B].
An agreement under Section 2(b) of the A. The agreements relating to supply and
Competition Act, “includes any arrangement or distribution do not cause an AAEC in the
understanding or action in concert”. The ambit is wide market.

5
and includes both written and unwritten The agreement between the distributors and Vijeta
agreements based on the intention to enter into a are genuine agreements for supply and distribution
legal relationship (All India Tyre Dealers’ Federation entered as a usual commercial arrangement. There is
Informant v. Tyre Manufacturers, 2013 Comp LR 92 no intention or mutual understanding to restrain
(CCI)). An enterprise for this purpose is any competition. Further, they do not cause AAEC as,
association, or any entity, irrespective of its legal firstly, there is no exclusive supply agreement
status (Competition Commission of India v. Coordination between Vijeta and its dealers [1], secondly, there is
Committee of Artists and Technicians of W.B. Film and no exclusive distribution agreement and refusal to
Television and Ors., AIR 2017 SC 1449). It also deal with other entities [2], thirdly, there is no
includes any department of the government arrangement for re-sale price management [3], and
engaged in the activity of production or lastly, there is no tie-in arrangement [4]
distribution of goods. 5. There is no exclusive supply agreement
In the present case, Vijeta is a statutory between the dealers and Vijeta
corporation engaged in the manufacturing of its Section 3(4)(b) of the Competition Act any
own line of products, thus engaged in an economic agreement, restricting the purchaser in the course of
activity. Therefore, it is an enterprise as per section his trade from dealing in any goods other than those
2(h) of the Competition Act. of the seller are exclusive supply agreements.
However, the Act does not presume such restraints to
Further, Vijeta has an omni-channel distribution
necessarily always cause an AAEC they have to be
line. Vijeta operates at the manufacturing level of
assessed under §19(3) of the Competition Act. The
the production chain, and sells its line of devices,
Commission has observed that the entity must
including the “Mango” smartphones, through
possess significant market share to cause AAEC
various channels.1 Accordingly, Vijeta operates at a
(Automobiles Dealers Association, Hathras, UP v. Global
vertically upstream level of manufacturing, whereas
Automobiles & Ors. and Pooja Export India Private
its dealers operate at a downstream level of
Limited, Case No. 33 of 2011.) However, Vijeta
distribution and sales to its end users. Therefore,
possesses insignificant market shares both, in the
there exists an agreement under §2 (b) of the
smartphone market13 and the after-sales market14. By
Competition Act between two enterprises who are
not permitting its dealers to engage in the sale of the
vertically related.
products of any other brands,15 Vijeta aims to protect
its business and the customers. This stipulation keeps

1
Moot Proposition, ¶ 7(a).
13
Moot Clarification, ¶ 20.
14
Moot Clarification, ¶ 69.
15
Moot Proposition, ¶ 7 (d).

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 B. The agreement between the enterprises Vijeta posted with the financial and investment
are likely to cause AAEC activities of its dealers to ensure that funds meant
The agreement between parties are likely to cause functioning of the dealership business are not
AAEC as it firstly, pertains to resale price diverted elsewhere. The Commission, in FX
management [1], secondly, there is an agreement for Enterprises v. Hyundai had opined that such clauses are
exclusive supply [2], thirdly, Vijeta’s conduct in not anti-competitive, but instead keep the
restriction of distributorship of its products and manufacturer empowered to ensure that their dealers
spare parts amounts to Refusal to deal [3], and remain financially viable.
lastly, it constitutes a tie-in arrangement [4] 6. There is no agreement for exclusive
distribution and refusal to deal
1. The arrangement between Vijeta and its As per Section 3(4)(c) exclusive distribution
distributors is for resale price maintenance agreement includes any agreement to limit, restrict or
withhold the output or supply of any goods. To
As per Section 3(4)(e) of the Competition Act,
determine contravention of Section 3(4)(c) and
resale price maintenance (“RPM”) includes any
Section 3(4)(d) the CCG has to establish that it causes
agreement to sell goods on the condition that the
AAEC based upon the factors listed in Section 19(3)
prices to be charged on the resale by the purchaser
of the Competition Act. The restrictions would not
shall be the prices stipulated by the seller. Further,
be likely to result in any AAEC if the brand does not
any discount control mechanism where the dealers
possess a substantial market share. Thus, it is
are allowed to provide discounts up to the limit
contended that since Vijeta does not enjoy a
permitted by the manufacturer are included under
significant share in the market, an AAEC cannot be
the ambit of Section 3(4)(d) of the Competition
caused by it (Ghanshyam Dass Vij v. Bajaj Corp. Ltd.,
Act (Fx Enterprise Solutions Pvt. Ltd. and Anr. v.
2015 (CCI) 155)
Hyundai Motor India Pvt. Ltd., 2017 S.C.C. OnLine
Vijeta has been alleged to enter into such an
C.C.I. 26).
agreement by refusing to supply the spare parts to any
In the present matter, Vijeta regularly circulates a third parties. However, it is averred that this does not
recommended discount list containing upper limits amount to an anti-competitive agreement causing
of the permissible discount rates.2 AAEC. It is contended that the Competition Act

Unilateral Termination : The supply agreement does not restrict the right of the manufacturer to
of the retailers is unilaterally terminated if they fail freely exercise his own independent discretion as to

2
Moot Proposition, ¶ 7 (a).

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to comply by the restriction on discount rates set the parties with whom he will deal (US v. Colgate &
by Vijeta.3 Furthermore, the RPM provides an Co., 250 US 300)
incentive to the retailers to prioritize the sale of This practice ensures that the device is not repaired
Mango products over its competitors, which could by non-certified technicians using low quality
potentially lead to foreclosure of competition. products. This clause is instrumental for ensuring a
proper service and repair of the Mango smartphones.
Limit on discount leading to foreclosure : Any
Further, this policy offers a protection of brand-
kind of variable discount provided by the
image in case of such quality- driven products. (Ashish
distributor is a cost to the distributor, thus a set
Ahuja v. Snapdeal and Anr., Case No. 17 of 2014).
lower limit on the discount would allow the
7. There is no arrangement for resale price
distributor to sell those products on profit. This
maintenance amongst Vijeta and its dealers
could act as an incentive to sell Mango products
over its competitors leading to a foreclosure of As per Section 3(4)(e) of the Competition Act, resale
competition. price maintenance (“RPM”) includes any agreement
to sell goods on the condition that the prices to be
Issue with effective price competition : By
charged on the resale by the purchaser shall be the
ensuring that retailers and distributors do not
prices stipulated by the seller. On a pure factual
provide discounts beyond the permissible limit
analysis it can be observed that Vijeta has not
Vijeta is hindering the retailers to compete
imposed any RPM on the dealers. The allegation
effectively on price. The RPM agreement adversely
levied by the Informants, is a false account of the
affects the consumers by restricting the amount of
OP’s conduct Vijeta circulates a recommended
discount that could be offered by distributors. The
discount list to its dealers, to maintain a uniform
same forces the consumers to pay higher prices for
price. The suggested discount limits are purely
Mango smartphones than would have been offered
recommendatory in nature.16 The same maintains the
had it not been for the RPM.
financial health of the dealers which is an extremely
Mystery Shopping Agencies :The important factor to ensure a robust dealership
implementation of discount control with the help network for the manufacturer, so that the dealers
of mystery shopping agencies is not conducive to have the ability to invest in sales, services, and
competition in the market (Fx Enterprise Solutions promotion of new and existing products and also to
Pvt. Ltd. and Anr. v. Hyundai Motor India Pvt. Ltd., avoid providing discounts of a predatory nature
2017 S.C.C. OnLine C.C.I. 26. ) It has also been which are detrimental to their finances. Further, this
held violative of Section 3(4)(e) read with Section

3
Moot Proposition, ¶ 7 (b).
16
Moot Proposition, ¶7 (a).

8
3(1) of the Competition Act (Vishal Pande v. Honda restricts the dealers from operating on the extremes.
Motor cycle and Scooter India Pvt. Ltd., Case No. 40 of
Even if it is assumed that there is an RPM, it can be
2017). In the present matter, it is noted that Vijeta
observed that they do not meet the threshold
has employed mystery shopping agencies to
provided in Section 19(3) of the Competition Act. On
monitor the prices at which the products are being
a rule of reason analysis as laid down in Leegin Creative
sold.4
Leather Products Inc. v. PSKS, Inc., 551 U.S. 877 (2007)
Thus, it is evident that the RPM agreement causes an enquiry about the economic rationale and
AAEC to competition in the market and is in competitive consequences of a manufacturer’s RPM
violation of §19 (3) of the Competition Act, and, policy can be made to see its impact on the
hence, is anti-competitive. competition. Further, it has been established that
there might be a positive impact of such policies and
2. The agreement between Vijeta and its
may lead to efficiencies (EU Commission Notice,
distributors amounts to an exclusive supply
Guidelines on Vertical Restraints, ¶106). They provide
agreement
that RPM, and discount limits help prevent free-
As per Section 3(4)(b) exclusive supply agreements
riding among the distributors such as customer
include any agreement restricting in any manner the
window shopping, preferring distributors who
purchaser in the course of his trade from acquiring or
prioritise discounts over retail services. Hence, the
otherwise dealing in any goods other than those of the seller
distributors who prioritise and spend in retail service
or any other person. Creating entry barriers for new
end up losing customers to the distributors offering
entrants in the upstream market by restricting the
heavy discounts. Since retail services include
dealers in the downstream market from selling
marketing, advertising, etc., the distributors offering
products of any other entity using such exclusive
heavy discounts are essentially able to free-ride on the
supply agreements has been held to be an anti-
demand generated by the distributors spending on
competitive practice in Shamsher Kataria v. Honda
retail services. Secondly, RPM increases competition
Siel Cars India Ltd. and Ors Case No. 3 of 2011. Such
by facilitating the entry of new firms and brands in
agreements by preventing new entrants drives out
the market. A new firm cannot sustain itself in a
existing competitors as well prevents new entrants
market where the products are being offered for
from entering the market thus, foreclosing the
heavy discounts. Since the RPM limits the permissible
market.
discount, new entrants into the market would find it
Loss of choice for consumers : Restriction on easier to survive and compete for the demand.
supply for the retailers leads to less choices for the
These policies enhance market-wide competition by
consumers in the market for after-sales services.

4
Moot Proposition, ¶8.

9
The consumers are forced to avail the services of fostering vertical efficiency and maintaining the
the authorized dealers, who sell only the Mango- desired quality of a product. Instead of attracting the
branded accessories and parts. Thus, they have to consumers by offering heavy discounts and
incur excessively higher prices, which are not competing on the prices, the dealers compete on the
justified by the quality offered.5 This does not lead quality of services. This way the manufacturer can
to an accrual of benefits, but rather has a prevent the distributors from competing on price,
detrimental effect on the interests of the thus forcing them to offer better services to
consumers, and is thus anti-competitive. customers such as product demonstrations, repair
services, etc. Therefore, RPM is not anti-competitive
It can be noted that Vijeta has restricted its retailers
but may potentially have pro-competitive effects.
and dealers from purchasing products of any other
Application of the doctrine of colgate
entity. Further, as provided in the proposition the
The doctrine states that a manufacturer may
services and spare parts provided at the authorised
unilaterally terminate business with any other
dealership are costly. Thus, such arrangements
company without triggering a violation of the
cause AAEC in the market.
antitrust laws. It is based on the premise that a
3. Vijeta’s conduct in restriction of
company has the power and the right to decide the
distributorship of its products and spare
entities it wishes to do business with. Colgate had
parts amounts to Refusal to deal
recommended its suggested resale prices, and
As per Section 3(4)(c) exclusive distribution
announced that it would stop dealing with any
agreement includes any agreement to limit, restrict
distributors that do not follow its suggestions. (United
or withhold the output or supply of any goods.
States v. Colgate & Co.)
Any such agreement also amounts to a refusal to
The U.S. SC held that RPM would not be illegal if an
deal, and is anti-competitive (Shamsher Kataria v.
enterprise were to follow a policy of simply refusing
Honda Siel Cars India Ltd. and Ors Case No. 3 of
to deal with vendors who sold below suggested retail
2011.). To determine contravention of section
price. Thus, it held the same to not be violative of the
3(4)(c) and Section 3(4)(d) the CCG has to
Sherman Act. Vijeta has not imposed any penalty on
establish that it causes AAEC based upon the
the dealers for violating its recommendatory discount
factors listed in Section 19(3) of the Competition
list. Thus, Vijeta’s refusal to engage in commercial
Act.
transactions with any dealer which does not adhere to
Foreclosure of Competition in the market :
the discount limit is justified.
Such arrangements restrict entry of new players in
8. There is no tie in arrangement
the market and affect intra-brand competition.
Section 3(4)(a) provides that tie-in arrangements
(Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S.

5
Moot Proposition, ¶ 7 (d).

10
36, 49 (1977)) . This practice of distribution of the include any agreement requiring a purchaser of goods, as a
genuine parts only to authorised dealers and a condition of such purchase, to purchase some other goods.
withdrawal of the warranty if the phone is repaired Tying happens when the seller attaches the condition
by independent repairers,6 leads to a complete of sale of a non-desired product with the sale of a
foreclosure of the market for independent desired product (Northern Pacific R. Co. v. United States
repairers, creates barriers to entry and deprives the (1958) 356 US 1.) Since Vijeta does not possess a
consumers of any choice in the aftermarket for substantial market share,17 it does not wield any
spare parts and repairs. controlling power in the market. Further, there is no
Vijeta has ensured that it is the sole supplier of element of coercion evident here. As held in Microsoft
genuine parts of the brand in the aftermarket and v. Commission that in cases of tying in digital markets
by restricting the supply of parts and accessories “coercion exists when a dominant undertaking deprives its
and imperious warranty conditions had ensured customers of the realistic choice of buying the tying product
that they become the only viable supplier of without the tied product.” However, the users do
effective repair and maintenance services in the purchase the desired parts and accessories for their
aftermarket. phones from online sources or local electronics
Forcing customers to avail expensive after sale stores, which are non-Mango branded.
services : Forcing consumers to avail services No tie-in of mobile phone with Offex
solely of the few authorised dealers for any after application
sales services leads to deprivation of consumer With respect to the alleged tie-in of Offix
choice in the aftermarket for spare parts and application, it is submitted that the conditions
maintenance services (Shamsher Kataria v. Honda Siel requisite for the materialising of such an
Cars India Ltd. and Ors Case No. 3 of 2011.). Vijeta arrangement, are not present here. For a
has not only limited its supply of branded parts to considerable restrain of free competition in the
its exclusive dealers, but also has forced its market, the seller must have sufficient economic
consumers to avail the services solely of these few power with respect to the tying product, (Sonam
dealers, for any after-sales services., instead of any Sharma v. Apple & Ors, 2013 Comp LR 346 (CCI)
accrual of benefits to the consumers, it imposes a which is absent here.18 Further, there exists no
restriction on the interests of the consumers. coercion, since it is evident that the users can
In the present matter, dealers were categorically download alternative applications of other
7
ordered not to deal in the competing goods not

6
Moot Proposition, ¶ 7 (c).
7
Proposition, para 7(d).
17
Moot clarification, ¶ 20.
18
Moot clarification, ¶ 20.

11
doing so could result in the revocation of companies as well.19 Thus, for the same reason,
dealerships and penalties. Such non-compete there cannot be said to be a foreclosure of
obligations force the resellers to procure their competition.
requirements only from certain designated sources
leading to exclusive purchasing. (Case C-234/89 B. The de minimis doctrine is applicable here,
Delimitis v Henninger Bräu [1991] ECR I-935, para and thus there is no AAEC.
27.) The doctrine of de minimis states agreements of
Restrictions on entities other than authorised enterprises with insignificant market shares have
dealers to deal in the products of Vijeta : insignificant effect on the market i.e., it is unlikely to
Allowing only “authorised dealers'' to deal in the cause AAEC in the market. In the case of Ghanshyam
parts and accessories is a kind of Selective Dass Vij v. Bajaj Corp. Ltd., the Competition
distribution agreement. Such selective distribution Commission of India observed that the doctrine of de
agreements are only allowed if the criteria listed in minimis can be used as a factor to militate against
the case of Case 26/76 Metro v Commission [1977] AAEC. It is submitted that Vijeta does not have a
ECR 1875 is complied. It provides that agreements substantial market share to have an AAEC in the
enetred into for legitimate requirements such as relevant market.20 Hence, even if there existed an
preservation of quality or technical requirements; anti-competitive agreement, it would not have an
resellers chosen purely based on an objective, AAEC in the relevant market due to the insufficient
qualitative and uniformly executed criteria will not market share of Vijeta. Additionally, there is no
be held anti-competitive (Case 31/80 NV L’Oréal v foreclosure of competition since the consumers are
PVBA [1980] ECR 3775, para 16) free to purchase the products of any other brand, and
In the present matter, there is nothing to testify the same has also been practiced by a portion of the
that authorisation was granted uniformly to all Mango phone users.21
those who fulfil the qualitative objective criteria,
instead considering the anti-competitive necessity
of additional permission even to authorised dealers
to further trade on internet (PO/Yamaha (Case
COMP/37.975) [2003]), with no objective
justifications than to maintain territorial exclusivity,
RPM measures and non-compete obligations were
the criteria employed to grant authorisation. A

19
Moot clarification, ¶ 25.
20
Moot clarification, ¶ 13.
21
Moot Proposition, ¶ 7 (d).

12
similar requirement of getting prior approval for
internet sales was in fact held to be a restriction by
object in the Voorne case. (Case No C/16/331595 /
HA ZA 12-1167 Voorne Koi BV v Oase BV). This
pertains to refusal to deal and cause AAEC by
putting restrictions on the dealers/ distributors
who are qualified to deal in the products of Vijeta
and thus foreclose fair competition as under
Section 19(3)(c) and does not bring any pro-
competitive benefits.

4. The arrangement between Vijeta and its

distributors is a tie-in arrangement
Section 3(4)(a) provides that tie-in arrangements
include any agreement requiring a purchaser of goods, as a
condition of such purchase, to purchase some other goods.
Tying happens when the seller attaches the
condition of sale of a non-desired product with the
sale of a desired product (Northern Pacific R. Co. v.
United States (1958) 356 US 1.) Moreover, “coercion
in such cases exist when a dominant undertaking deprives
its customers of the realistic choice of buying the tying product
without the tied product. ( Microsoft v Commission, Case
T-201/04, at 955.) The agreement between Vijeta
and its dealers is a tie-in arrangement as :
Phones are tied with the offix application :
OECD in its report has noted that coercion in the
digital world can also include pre-installation of an
application on the smartphone (OECD (2020),
Abuse of dominance in digital markets). In this
sense, technical tying coerces consumers into
purchasing the tied application with the
smartphone. In the present matter, by pre-

13
installing the Offix applications in the Mango
smartphones, Vijeta has imposed a tying
arrangement on the consumers. The smartphones
come pre-loaded with this software application,8
and thus the applications being physically-
integrated, cannot be separated.
Phones are tied with accessories, parts, and
after sale services
Vijeta voids warranty in cases where the products
have been used along with non-Mango branded
accessories,9 or even serviced by any non-Mango
Tree stores.10 It also withdraws its warranty if
customers use after-sales services of a competitor.11
Thus, Vijeta achieves the effect of tie-in by this
condition of withdrawal or withholding of
warranties and coerces customers into purchasing
the original parts and accessories. However, the
prices for the genuine parts and accessories are
considerably higher than the generic ones, and thus
the consumers do not wish to pay such exorbitant
prices.12
Tying arrangement causes AAEC : Tying in is
not considered per se illegal. Thus, it has to be
shown that any kind of tying in agreement would
cause AAEC based on the factors mentioned in
Section 19(3). Tying arrangements deny
competitors free access to the market for the tied
product, not because the party imposing the tying
requirements has a better product or a lower price

8
Moot Proposition, ¶10.
9
Moot Proposition, ¶7 (e).
10
Moot Proposition, ¶7 (c).
11
Moot Proposition, ¶7 (c).
12
Moot Proposition, ¶7 (d).

14
but because of his power of leverage in another
market. (Microsoft v Commission, Case T-201/04, at
955.)

15
ADDITIONAL ARGUMENTS
● The participants may present arguments on the applicable standard of proof that the Apex Court of
Rashtra must follow in the present case using the following information:

1. No Applicability of the doctrine of de minimis (INFORMAN’T ARGUMENT)

The doctrine of de minimis, first formulated in Volk v. Vervaecke (Volk v Vervaecke, Case 5/69, [1969]
ECR 295.) deals with the concept wherein agreements of enterprises with insignificant market shares
have insignificant effect on the market i.e., it is unlikely to cause AAEC in the market. The ECJ
observed that an agreement falls outside the prohibition of Article 101(1) of TFEU where it has only
an insignificant effect on the market, taking into account the weak position which the enterprise
concerned has on the market of the product in question.

2. Identification of the relevant market- not required (INFORMAN’T ARGUMENT)

It is to be noted that there is no need to define the relevant market at a prima-facie stage. (Builder
Association of India v Cement Manufacturers Association 2012 SCC OnLine CCI 43) The Apex
Court via clarification order in the case of Coordination Committee (Competition Commission of India (CCI) v
Coordination Committee of Artist and Technicians of West Bengal Film and Television Industry Civil Appeal No
6691 of 2014), and CCI via Ramakant Kini, has clarified that the Commission is not required to identify
the relevant market but has to see if the agreement has an anti-competitive effect in any market under
Section 3 of the Competition Act. (Mr Ramakant Kini v Dr LH Hiranandani Hospital 2014 SCC OnLine
CCI 15 [hereinafter ‘Ramakant Kini)
3. Identification of the relevant market - required ( OPPOSITE PARTIES)
A relevant market is defined as a market comprising of all the products and services which are
interchangeable and substitutable depending upon the price, quality, and intended use.22 In the
present case, there are two distinct relevant markets, the primary market of phones and the secondary
market of after-sale of Vijeta, consisting of two segments.23 To conclude this, the two tests have to be
applied, failing which denies the possibility of the market being seen as a unified “system’s market”, 24
first to check if the consumer can switch to spare parts manufactured by another competitor and
second is whether the consumer can switch to another primary product to avoid a price increase on
the market for spare parts.25 In the present case, considering that the use of spare parts and
accessories of manufacturers other than Vijeta adversely impacted the warranty obligations26 and that

22
Case 85/76 Hoffmann-La Roche & Co AG v Commission [1979] ECR 461 [hereinafter ‘Hoffmann-
La Roche’], para 28; Case T-321/05 AstraZeneca v Commission (2010) ECR II-2805, para 97.
23
Jefferson Parish Hospital v Hyde 466 US 2 (1984) 21-22.
24
Shri Shrikant
to an extentShivram v M/shave
these parts Suzuki Motorcycle India
personalised 2015based
designs SCC on
OnLine CCImodels,
different 44, para2710.
makes it impossible
for the consumer to substitute. With respect to the second question, just to avoid the increase in the
cost of spare parts, a consumer who already16owns a phone will not undertake the switching costs,
which are as high as the cost of a new phone. Furthermore, in general substitutability is checked as
to an extent these parts have personalised designs based on different models,33 makes it
impossible for the consumer to substitute. With respect to the second question, just to avoid the
increase in the cost of spare parts, a consumer who already owns a phone will not undertake the
switching costs, which are as high as the cost of a new phone. Furthermore, in general
substitutability is checked as per the commercial reality of cluster market of spare parts. Thus,
the consumer have been ‘locked in’, as at the time of purchase, consumer can’t be expected to
engage in a whole life cost analysis, specifically considering the information asymmetry and
inability to undertake sophisticated analysis, and even if they do there is nothing that could
prevent installed-based opportunism and hence there would be two separate relevant markets as
has been observed in many cases. Since in the market of parts and accessories of Mango
smartphones, Vijeta is the only player, it fulfils the criteria of de-minimis required to cause AAEC.
It also couldn’t take the precedence and protection of Block exemptions considering its market
power and its agreements being in the nature of hard-core restrictions or explicit exclusion.

25
Case T-427/08 CEAHR v Commission (2010) ECR II-5865, para 168-174.
26
Proposition, para 7(e).
27
Brown Shoe v United States 370 US 294, 325 (1962), para 327.
28
Case 22/78 Hugin v Commission (1979) ECR 1869 [hereinafter ‘Hugin’], paras 4-10.
29
Kodak, 473-474.
30
Shamsher Kataria, para 22.1.
31
Shri Shrikant Shivram Kale v M/s Suzuki Motorcycle India Private Limited Case No 01 of 2015.
32
Competition Act 2002, s 5(1)(a).
33
Brown Shoe v United States 370 US 294, 325 (1962), para 327.

17
 ARGUMENTS FOR ISSUE II

Issue: Whether Vijeta has contravened the provisions under Section 4(2) of the
Competition Act?

GENERAL LAW
● Indian Law, Section 4 of the Competition Act, 2002-
Section 4 of the Competition Act is the operative provision of the Competition Act dealing with the abuse
of dominant position. This provision is broadly fashioned on the European Union prohibition on abuse of
dominance contained in Article 102 of the Treaty on the Functioning of the European Union (TEFU).
Section 4 prohibits any enterprise from abusing its dominant position. The term ‘dominant position’ has
been defined in the Competition Act as ‘a position of strength, enjoyed by an enterprise, in the relevant
market, in India, which enables it to operate independently of competitive forces prevailing in the relevant
market; or affect its competitors or consumers or the relevant market in its favour’. The definition of the
dominant position provided in the Competition Act is similar to the one provided by the European
Commission in United Brand v. Commission of the European Communities case (United Brands v Commission of the
European Communities; [1978] ECR 207 ) In the United Brands case the Court observed that: ‘....a position of
strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by
affording it the power to behave to an appreciable extent independently of its competitor, customers and ultimately of its
consumers.

SPECIFIC ARGUMENTS FOR THE PETITIONER SPECIFIC ARGUMENTS FOR THE RESPONDENT

I. VIJETA HAS CONTRAVENED THE I. VIJETA HAS NOT CONTRAVENED THE

PROVISIONS UNDER SECTION 4(2) OF PROVISIONS UNDER SECTION 4(2) OF THE

THE COMPETITION ACT COMPETITION ACT

Vijeta has contravened Sec 4(1) and Sec 4(2) of the Section 4(1) provides that no enterprise shall abuse its
Competition Act, thereby abusing its dominant dominant position. Vijeta has not abused its
position. This is because of three pertinent dominant position under Section 4 of the
reasons-- Firstly, Vijeta qualifies as an enterprise Competition Act. In order to prove the
under the Competition Act [A]. Secondly, the two contravention of Section 4 of the Competition Act,
RM for Vijeta are the ‘document editing software the relevant market defined under Section 2(r) of the
market in Genovia’ and the ‘after-services market Competition Act is to be determined. Then, it is to be
of Mango smartphones in Genovia’ [B]. Thirdly, seen whether the enterprise is dominant in the

18
Vijeta was dominant in both the RMs [C]. Fourthly, relevant market. Further, the conduct of the
Vijeta has abused its dominance in these relevant enterprise is to be examined to assess any abuse of its
markets [D]. dominance. The relevant geographic market is the
‘State of Genovia’ whereas there are two relevant
A. Vijeta qualifies as an Enterprise under product markets [A]; second, Vijeta is not dominant in
Sec 2(h). the designated relevant markets [B]; and third, in
Section 2(h), defines an enterprise as “a person or arguendo, the conduct of Vijeta does not amount to
department of the Government that has been engaging in any abuse of dominance [C].
activity relating to production, supply, distribution, A. The RPM is the State of Genovia and
acquisition or control of articles or goods, or the providing of there are two corresponding RPM.
services of any kind.” A functional approach,
interpretation is accorded by the courts, whereby The relevant market, the relevant geographic market
involvement in ‘economic activity’ [Shivam and the relevant product market must be considered.
Enterprises v. Kiratpur Sahib Truck Operators and In the present case scenario, the relevant geographic
Ors.,Case No. 43/2013 (CCI). CCI held that the market is ‘State of Genovia’ [1]; and the relevant
association was involved in economic activity by product markets are the ‘market for productivity and
providing transport services; further in Surinder utility smartphone applications’ and the ‘market for
Singh Barmi v. The Board of Control for Cricket in India sale of smartphones’ [2].
Case No. 61/2017 (CCI) the BCCI was held as an
enterprise for being involved in ‘economic activity’] 1. The State of Genovia is the RGM.
suffices for qualifying as an enterprise. [Vijeta is an The RGM constitutes the market area in which the
enterprise in substance, in the operational sense of conditions of competition for supply of goods or
the term] The fact that Vijeta deals with provision of services or demand of goods or services
manufacturing Mango phones and accessories are distinctly homogeneous (Europemballage and
(parts), supplying it through physical and online Continental Can v. Commission ECR 1973-00215, at 23
distribution channels and provides after sale (Continental Can case)). They must be differentiable
services, indicates that it indulges in economic from the ones prevailing in neighbouring areas. (Shri
activity. Avtar Singh v. M/s Ansal Township & Land Development
B. Relevant markets are ‘document Ltd. [2014] CCI 20, Case No 3 of 2014) The criteria to
editing software market in Genovia’ determine the relevant geographic market are defined
[RPM1] and ‘after-sale services market in Section 19(7) of the Competition Act.
for Mango smartphones in Genovia’ In the present fact scenario, the conditions for
[RPM2]. operation are identical throughout the state of

19
Conjoined reading of Section 2(r) and Section Genovia. Therefore, the RGM for both the
19(5) lays down the definition for RM. Further corresponding product markets for Vijeta is the ‘State
Section 2(s) & 2(t) read with Section 19(6) and of Genovia’.
19(7) respectively defines and lays down the factors 2. Vijeta operated at two RPM.
to be considered for determining RPM and RGM. Relevant product market is defined as the market
In order to delineate the relevant market, the RPM which constitutes all goods and services which are
and the RGM must be considered. Vijeta is considered as ‘interchangeable’ (Continental Can
dominant in two RPM [1], the RGM is the State of case) or ‘substitutable’ (Competition Commission of India
Genovia for the RPM [2]. v. Artistes & Technicians of WB Film & Television, AIR
1. Vijeta is dominant in two RPM. 2017 SC 1449 (Film & Television case)
Relevant product market is defined as the market by the consumer by reason for any or all of the
which constitutes all goods and services that are reasons provided in Section 19(7) of the Competition
considered as interchangeable or substitutable by Act. The RPM in this scenario are the ‘market for
the consumer by reason for any or all of the productivity and utility smartphone applications’ [2.1]
reasons provided in Section 19(7) of the and the ‘market for sale of smartphones’ [2.2].
Competition Act. One of the determinants for 2.1 Market for productivity and utility
examining the interchangeability is to consider the smartphone applications in Genovia.
ultimate use of goods from consumer’s perspective The factors which are considered in determining this
[Sonam Sharma case] and its intended use. [Film and market are: end-use of goods, and existence of
Television case] The two RPM are: Firstly the specialised producers. [Sec 19(7)(e)](Ahmed Saeed
document editing software market in Genovia [1.1] Flugreisen v. Zentralezur Bekampfung Unlauteren
and secondly the after-sales service market of Mango Wettbewerbse ECR 1989-803.)
smartphones in Genovia [1.2]. In the present case, the inelastic demand of the
1.1 Document editing software market in Genovia consumer is the ability to use utility and productivity
constitutes one of the RPM. applications including applications for document
The utility and productivity applications for editing, note taking, making presentations, etc. It is
document editing, making presentations, note submitted that such vital tasks can be undertaken only
taking, among others, are collectively called ‘Offix’. by using utility and productivity applications like that
Offix consisted of different applications which of Offix. Thus, the software apps are not freely
differed in characteristics and use, which cannot be substitutable thereby constituting one single market
substituted. [non-interchangeable from consumer’s for the software applications.
perspective and intended usage] Each of these 2.2 Market for sale of smartphones in genovia
applications formed a different RPM as a doc The second RPM in the present scenario is the

20
editing app is different from a presentation making market for sale of smartphones comprising both the
application or an app that crunches numbers. primary and secondary market of smartphones.
Further, the subscription to these apps was free of Primary and secondary markets are considered
charge for a year [CCI had held ‘radio cabs service’ together in cases where while buying the primary
to be a relevant market by itself in Fast track Call product, the customer takes into account the whole-
Cab Private Limited v. ANI Tech Pvt Ltd, Case No. life cycle cost of the product. (OECD Report,
6/2015 (CCI) they are not substitutable owing to Competition Issues in Aftermarkets (2017) at para
characteristics not available in other modes- 57.)
convenience in terms of time saving, point-to-point pick and It has been held that for primary products like laptops
drop, pre-booking facility, round the clock availability, (In re: Trend Electronics v. Hewlett Packard India Sales Pvt.
predictability in terms of expected waiting/ journey time etc.] Ltd. [2015] CCI 166, Case No. 92 of 2015; Shri Amitabh
Hence, each app has a separate, unique and v. M/s KENT RO Systems [2015] CCI 4, Case No. 100
identifiable product market. of 2014.) customers can calculate the probable whole-
Moreover, Vijeta invested heavily in R&D of life costs easily using the information available about
Offix. Thus, Vijeta specialised in developing the these products in the market. Moreover, the
Offix productivity applications. There is also the development of a digital society has enabled the
existence of other specialised producers of customers to gather more information on the
productivity applications like Macrosoft and possible costs of secondary products and has allowed
Froogle in the Genovian market. customers to calculate the entire usable life cost more
1.2 After-sale services market for Mango precisely. A similar analogy is to be drawn for the
smartphones in Genovia. market of electronics like smartphones.
The after sale service market of Mango phones The factors to be considered in determining this
comprises two sub-segments (i) market for Mango market are physical characteristics or end-use of
parts and accessories; and (ii) market for after-sale goods, and availability of close substitutes.
services like cleaning, software troubleshooting, A smartphone is an integrated portable device that
software reboots, warranty and others. The facilitates communication, data storage and access to
division is because not all after-sale service requires the internet. Smartphones have distinct physical
the purchase of parts. [Shri Shamsher Kataria v. characteristics and end use as compared to other
Honda Siel Cars and Ors Case no. 03/ 2011(CCI). ] electronic devices and therefore the market of
There are specialised producers of after-sale smartphones is a separate product market altogether.
services of Mango phones in the Genovia, which [In re: M/s K.C Marketing v. OPPO Mobiles MU Private
makes it a different market in itself altogether. Limited] Therefore, considering the physical
Moreover, consumers would prefer to get the characteristics and use of a smartphone, the RPM is

21
after-sale services of their Mango phones from the smartphone market in Genovia.
Mango authorised dealers only. In the present case, along with Mango phones, there
2. State of Genovia is the RGM for Vijeta. is an existence of other Panemese phones [cheap and
The relevant geographic market constitutes the of spurious quality] in Genovia which are close
market area in which the conditions of competition substitutes of each other and hence operate as a
for supply of goods or provision of services or competitive constraint for each other.
demand of goods or services are distinctly
homogeneous (Europemballage and Continental Can v. B. Vijeta does not exercise dominance in the RM.
Commission ECR 1973-00215 (Continental Can Dominant position [under Sec 4] is defined as a
case) and differentiable from the ones prevailing in position of strength that enables an enterprise to
neighbouring areas. (Shri Avtar Singh v. M/s Ansal prevent effective competition and act independently
Township & Land Development Ltd [2014] CCI 20, of its competitors. To ascertain dominance of Vijeta
Case No 3 of 2014.) The criteria to determine the in the relevant markets, all or any factors of Section
relevant geographic market are defined in Section 19(4) need to be considered. In the present case
19(6) of the Competition Act. scenario, it is humbly submitted that Vijeta is not
dominant in the market of productivity and utility
The Offix document editing can be downloaded in
applications [1] and the market of sale of
any phone but the conditions of service differ for
smartphones [2].
Mango smartphone users and non-mango
1. Vijeta is not dominant in the market for utility
smartphone users. A free subscription to Offix
and productivity applications.
applications was extended from 1 month to 12
To ascertain that Vijeta is not dominant in the market
months, only for Mango smartphone users.
of productivity and utility applications, the factors to
Further, the Mango smart phones were available in
be considered are size and importance of the
Genovia as they were intended for usage by
competitors [1.1], and dependence of consumers on
common Genovian wo(man). Additionally, Mango
the enterprise [1.2].
tree stores were only limited to the Tier 1, 2 and 3
1.1 Robust competition in the market for software
cities of Genovia. [Clarifications] Since the
applications.
conditions for operation are identical throughout
The active presence of a strong competitor in the
the Genovia. Therefore, the relevant geographic
relevant market implies the existence of competitive
market for both the RPM is the State of Genovia.
constraints. [Meru Travel Solutions Pvt Ltd v. Uber India
C. Dominant position exercised in RM Systems Pvt Ltd & Ors] In the present case, the
To determine Vijeta’s dominance in this market, competitors of Vijeta like Macrosoft and Froogle are
any or all of the factors of Section 19(4) of the entrenched market players in Genovia and have an
Competition Act are inquired into. Vijeta is

22
dominant in the document editing software market active presence in Genovia through subsidiaries,
in genovia [1], and in the after-sale services market branches, with considerable market share and
in Genovia [2]. experience etc. Hence, owing to the active and
extensive presence of competitors like Macrosoft and
1. Vijeta’s dominance in the document
Froogle, Genovia is not dominant in the market.
editing software market.
1.2 The consumers are not relying exclusively
Factors under Section 19(4) such as that of market
(depending) on Offix apps for their utility and
share [1.1], consumer dependence[1.2], economic
productivity solutions.
strength [1.3] and entry barriers [1.4] contribute to
As per Sunil Bansal and Ors v. Jaiprakash Associates Ltd
such dominance.
and Ors, an enterprise is not dominant if it does not
1.1 Market share- Usually there is presumption of
have the ability to influence the conditions of
dominance for share market share of 50% and
competition in the relevant market as the customers
above. In the present case, Vijeta has gathered
can easily switch to competing suppliers. In the
around 1/3 of the market in just 6 months; thus
present case, the users of Mango phones can easily
reflecting that Vijeta is a dominant player.
switch to applications of other app developers.
1.2 Countervailing buyer power refers to the ability
[Clarifications] Moreover, there is an option to
of the customers to switch to other suppliers. The
multiple other similar kinds of apps by different
ability of buyers to exercise such power is inversely
developers in smartphones. Therefore, it is submitted
proportional to the dominance exercise by the
that consumers are not dependent on Offix
enterprise.
applications.
Vijeta pre-installed Offix applications in Mango
[Even if they are pre-built or recommended, yet the
phones. Vijeta later permitted free access to these
consumers are in no way compelled to use them, they
apps for an entire year. Usage of such pre built
may switch, install other apps which suits them]
apps, has a cascading effect; network effects
2. Viehta does not exercise dominance in the
emerge whereby users do not have much incentive
market for sale of smartphones.
to switch. [manipulate dependence of users]
To determine Vijeta’s dominance in the market for
cumbersome process of switching is neglected by
sale of smartphones, the elements to be ascertained
users, for it may cause data retention issues,
are dependence of consumers on the enterprise [2.1],
inconvenience while adapting to a new interface.
countervailing buyer power [2.2], and size and
Moreover, owing to its user-friendly interface
importance of the competitors [2.3].
Vijeta was able to amass 32% share in the
2.1 Reliance of consumers on Mango smartphones.
document editing software. Therefore, the users
[Sanjay Kumar Gupta v. M/S DLF Ltd] There may be
are devoid of countervailing buyer power in this
the probability of an enterprise to dominate as it
scenario.

23
1.3 Entry barriers for competitors exist due to captures considerable market share of the product.
conditions such as economies of scale and network Further, owing to lack of substitutability the
effects in this case. Furthermore, there exist high consumers’ dependence on the product increases, and
technical barriers in the document editing software that poses an issue, however, in the present case, the
market owing to Vijeta’s superior technology. Pre- consumers are not dependant on Vijeta for their
built Offix apps pose an entry barrier for other app smartphone needs.
developers [not generated in Genovia] thus, 2.2 Consumers enjoy countervailing buying power.
establishing Vijeta’s dominance in the market. [Clarification 27] Consumers hold countervailing buyer
1.4 Economic prowess analyzes the resources of an power owing to the presence of a large number of
enterprise to examine its dominance in the market. players in the relevant market along with foreign
Additionally, factors like prestigious brand value brands. This implies that there is enough competitive
[earned through extensive promotions by constraint on Vijeta and hence, Vijeta is not dominant
government ministers] and deep pocket financial in the market.
resources provide the enterprise with commercial 2.3 There prevails an active presence of competitors.
advantages. Here, extensive funding by the in the smartphone market.
government to undertake R&D activities for Vijeta [Meru Case] An active presence of strong competitors
acts as a vital resource for Vijeta providing it the in the relevant market implies the existence of
requisite market dominance, something that its competitive constraints. The presence of competitors
competitors can’t afford. in the relevant market implies that the enterprise in
2. Vijeta’s dominance in the after-sale question cannot operate independently. In the
services market in Genovia instant case, Vijeta’s Mango phones face competition
Vijeta is dominant in RM2 being the sole supplier from Frapple and various other Panemese
of after-sale services [2.1] smartphones. Therefore, Vijeta is not dominant in the
2.1 Vijeta is the sole supplier in the after sales relevant market.
market.
[Shri Shamsher Kataria v. Honda Seil Cars Case no. C. Alternatively, Vijeta’s conduct does not
03/ 2011(CCI). CCI held that the sale of car and amount to abuse of the dominant position, if any.
the sale of spare parts are separate markets, and 1. Vijeta has not abused its dominance in
there the manufacturer was held to be dominant in the market for productivity and utility
the spare parts market.] applications.
Additionally, Vijeta voided the warranty on goods First, Vijeta has not engaged in predatory pricing
if they were serviced at other stores or used with [1.1]; second, Vijeta has not limited or restricted
non-Mango accessories. Owing to such an technical or scientific development [1.2]; third, Vijeta

24
exclusivity provision, Vijeta is guarding, defending has not indulged in practices resulting in denial of
itself excessively from the competitors in the after- market access [1.3]; and fourth, exclusive pre-
sale service market. Consequently, the consumers installation of applications does not lead to a prima
are dissuaded from using the service of facie case [1.4].
independent dealers. It is also given that only a 1.1 Vijeta did not indulge in predatory pricing.
small portion of users used other brand parts or Vijeta has not violated Section 4(2)(a)(ii) of the
accessories; hence cumulatively Vijeta exercises Competition Act by engaging in predatory pricing.
dominance in both RM. Imposing direct or indirect unfair or predatory price
D. Abuse of such dominance in the purchase or sale of the goods or services
Dominance per se is not illegal, however its abuse is constitutes an abuse of dominant position. However,
illegal. [MCX case] the question of predatory pricing could be ruled out
Firstly, Vijeta adopted predatory pricing in RPM1 when there is little prospect of significantly
to oust the competition [Sec 4(2)(a)(ii)] [1] and weakening rivals due to low multi-homing costs or
used its dominance to enter into another market when rivals have ready access to capital. [OECD
[Sec 4(2)(e)] [2]. Denial of market access to other Report, Abuse of Dominance in Digital Markets
players [3]. Furthermore, in RM2 Vijeta has abused (2020) As per Fast Track case also, incentivising,
its dominance by excessively charging the attracting customers with offers, schemes where big
consumers [Sec 4(2)(a)(ii)] [4] and denying market market players are already operational is not anti-
access to other independent dealers [Sec 4(2)(a)(i) competitive for a new entrant. Infact these are termed
& 4(2)(c)] [5]. as penetration pricing (or promotional pricing) which
is permissible.
1. Vijeta indulged in Predatory pricing to Here, Vijeta offered Offix applications for free in the
abuse its dominance. initial period to gain a toehold as it was a new entrant
[Uber India case, Fast Track Case, Matrimony case] in the market, where other big players are already
owing to ‘network effects’, the pricing structure operating. Moreover, there is no other information
has potential to influence the market structure. available to prove that Vijeta would offer these
Vijeta offered a free subscription of Offix apps to services in future at unjustifiably high prices.
its users for a year; it went over and beyond the 1 Therefore, Vijeta has not engaged in predatory
month trial period to gain traction among users. It pricing and has thereby not violated Section
has been held that zero pricing by a dominant 4(2)(a)(ii).
player is a predatory pricing tactic which amounts
to annihilating or destructive pricing and is abuse 1.2 Vijeta did not restrict technical or scientific
of dominance, MCX case. The EU has also development to the prejudice of customers.

25
recognised that zero pricing reflects blatant abuse Digital markets are marked by technological
of dominance [Deutsche v. Commission] and is innovation and always remain competitive. Therefore
contrary to penetrative pricing. dominance of a firm at present does not pose any
2. Vijeta asserted a cascading effect by threat to competition per se because in such
manipulating its dominance in one innovation markets, competitors aspire to gain
RPM to abuse its dominance in the competitive edge over their rivals through constant
other RPM. innovation. [Case M.7861 - DELL / EMC Merger]
It can be contended that Vijeta charges extremely Here, Vijeta’s entry into the market does not limit/
high after-sale service charges to make up for, reduce technical or scientific development, in fact
compensate for its zero pricing [free 12 month strengthens it. Vijeta’s entry would lead to more
subscription of Offix apps] in the relevant doc competition as the other competitors will strive to
editing software market. It means it exploits one innovate more to stay in the market. Therefore, Vijeta
RM, to gain in the other thus violating Section has not violated Section 4(2)(b) of the Competition
4(2)(a)(ii) of the Competition Act. Act.
[Additional arguments:- Offix apps come up as 1.3 Vijeta did not indulge in practices resulting in
suggested, recommended apps for usage denial of market access.
which indirectly hinders, curtails the users Denial of market access is any conduct by which a
choice. Consequently, Offix apps take superiority dominant enterprise forecloses the market or defers
over other apps in the market, by influencing, entry of competitors in the market. (Dhanraj Pillay &
manipulating the users to exclude other apps.] Ors v. M/s Hockey India [2013] CCI 5, Case No 73 of
3. Denial of market access to other players 2011.)
Pre-built offix apps deny market access to actual Furthermore, there is no abuse of dominance by
competitors ultimately harming consumers. denying market access if the customers are choosing
Drawing from the Microsoft case, it can be inferred the dominant firm’s product because of the
that Vijeta is engaging in ‘tying’ (relating and then superiority of the quality of the dominant firm’s
offering the two products conjointly) of its one products. (Case 1099/1/2/08 National Grid Plc v. Gas
product Mango phone with its Offix applications. and Electricity Markets Authority [2009] CAT 14
Such pre-installation causes customers to get (National Grid case).
accustomed to and rather prefer (by default) the In the present case scenario, it is submitted that Vijeta
tied products. has not denied entry to competitors into the market.
This effect is amplified here, as Vijeta offers to This is because, even though Offix and other
Mango phone users the apps for 12 months for Genovian applications are preinstalled, this does not
free. prevent the users from downloading apps from other

26
 4. The after-sale service and parts were developers. The users have the option of multi-
highly expensive. homing apps from other developers. [Clarification 25]
The consumers considered the high prices of the Moreover, other smartphone companies also pre-
original parts and accessories to be unjustified install productivity applications in the phones
based on the quality of the product. Imposition of produced by them. Therefore, it is a common
unfair price is an abusive act under Sec 4(2)(a)(ii) of business practice in Genovia. [Clarification 29]
the Competition Act. Unfair pricing includes Furthermore, users of Offix applications have time
excessive pricing. and again praised the quality of these apps in
Vijeta would void warranty of a Mango phone if comparison to the competitor’s apps. Therefore,
the user used third party products or used services Vijeta has not violated Section 4(2)(c).
of unauthorised dealers. Evidently, Mango 1.4 A Prima facie case is not established in the current
exploited, misused its dominance in the Mango scenario.
original parts and accessories segment to abuse its In Harshita Chawla v. WhatsApp Inc, [2020, CCI case] it
dominance in the after-sale services segment of was particularly held that pre-installation does not
Mango phones. Hence, it violated Section 4(2)(e) qualifies for a prima facie case under Sec 4(2) of the
of the Competition Act. Competition Act. In the present case, both Macrosoft
and Froogle are well established players in the market
5. Vijeta restricted market access for
for utility and productivity smartphone apps. Hence,
independent dealers in the after sale
exclusive pre-installation of indigenous apps by Vijeta
services market
in Mango phones is not sufficient cause for a prima
[Shamsher Kataria case] The Commission has held
facie case to be made out.
that not permitting availability of genuine spare
1. Vijeta has not abused its dominance in
parts in the open market, hampers, limits the ability
the market for sale of smartphones, if any.
of the independent repairers to offer repair and
Vijeta has not abused its dominance in the market for
maintenance services and effectively compete with
sale of smartphones because first, Vijeta has not
the authorized dealers. Vijeta has not allowed the
engaged in unfair pricing of its products and services
sale of Mango parts, accessories and repair of
[2.1]; second, Vijeta has not indulged in practices
Mango phones in the open market, hence
resulting in denial of market access [2.2]; and third,
restricting the market access.
Vijeta’s warranty conditions can be objectively
[Here EFD, essential facility doctrine can also be
justified [2.3].
argued upon]
2.1 Vijeta did not impose unfair or discriminatory
conditions or prices
To determine whether a price is excessive in

27
 comparison to the product being offered, two
elements have to be satisfied: [United Brands case]
a. comparing the cost of production and the price
charged, and b. whether the price charged is higher as
compared to the competitor’s product (in the same
range, quality)
Here, no information has been provided by the
Informant in order to use the aforementioned test.
Therefore, it is submitted that due to lack of matrix to
compare [lack of reference scale] they are mere
allegations of exploitative nature of the prices of the
products and services, hence, Vijeta cannot be held
liable for violation of Section 4(2)(a)(ii).
2.2 Vijeta did not indulge in denial of market access.
Vijeta’s conduct did not whatsoever result in denial of
market access to its competitors. Even if the firm is
dominant, it cannot be said that the firm has denied
market access to its competitors if it has made
information about all its conditions available to the
potential customers. [National Grid case] If the
conditions of purchase seem lavish to the customer,
they have the option to choose the product of a
competitor. In the present case, Vijeta provides the
due term and conditions in relation to usage,
warranty, and insurance along with its products
(transparency). The information is available on online
e-commerce sites as well. [clarification] Therefore, the
customers have the option to choose a competitor’s
product in case they do not find Vijeta’s conditions
appropriate for their individual usage.
[Additional contentions, the commission did state in
the Timex case that voiding warranty of the original
product on the ground that it wasn’t purchased from

28
 an authorised dealer is not an abuse of dominance,
rather it may be considered to be reasonable for
Vijeta to defend and uphold the righteous
distributional channel, else such tampering may
introduce counterfeit, shams which again does not
align with consumer’s interest]
2.3 Vijeta did not use its dominant position in one
RM to guard its dominance in another RM.
Article 102 of TFEU has been interpreted to include
the possibility for the dominant firm to justify its
conduct. The European Commission, in the
enforcement of Article 82 of the ECT (European
Commission Treaty), examines claims put forward by
a dominant undertaking that its abusive conduct is
justified. If it is found that the dominant undertaking
has taken reasonable steps for efficiency gains, its
defence of objective economic justification will be
accepted.
Here, Vijeta’s practice is objectively justifiable. Its
conduct produces substantial efficiencies which are
beneficial for the customers. By necessitating use of
original Mango products and services, Vijeta’s motive
is to protect the consumers from inferior or
hazardous products. (works in favour of vulnerability
of consumers) Further, Vijeta attempts to reduce the
real time costs incurred by consumers had they
suffered unnecessary deprivation, product failure by
using services of unauthorised dealers. (this enhances
consumer experience

ARGUMENTS FOR ISSUE III

Issue: Whether the DOTD has contravened Section 4(2) of the Competition Act?

29
GENERAL LAW
[Note: Participants from either side may rely on the general law since it is common to both the sides.
They can however interpret it in a manner that supports their side.]
● Section 4(2) prohibits the abuse of dominant position by an enterprise. Dominance means the possession
of significant market power, which enables an enterprise to have influence over the market price or limit
production independent of competitors as well as customers.
● Explanation (a) to Section 4 of the Competition Act, 2002: (a) “dominant position” means 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 favour.
● Three questions typically arise in abuse of dominance cases: 1. What is the relevant market in which the
dominance/abuse is alleged? 2. Is the enterprise dominant in the relevant market? 3. What are the specific
indicted practices and do these amounts to abuse?
● Dominance has significance for competition only when the relevant market is defined. The Competition
Commission of India, to regulate competition, has to define the relevant market, both in terms of
geography and products in question, as per section 2(r) of the Competition Act.
● As per Section 4(2), abuse of dominant position takes place if an enterprise or a group:
(a) directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or
service; or price in purchase or sale (including predatory price) of goods or service, or
(b) limits or restricts the production of goods or provision of services or market thereof or technical or
scientific development relating to goods or services to the prejudice of consumers; or
(c) indulges in practice or practices resulting in denial of market access in any manner; or
(d) makes 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
(e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

Issue 3 - Whether DOTD has contravened Section 4(2) of the Competition Act?

SPECIFIC ARGUMENTS FOR THE INFORMANT SPECIFIC ARGUMENTS FOR THE OTHER PARTIES

I. DTOD HAS CONTRAVENED SECTION I. DTOD HAS NOT CONTRAVENED SECTION

4(2) OF THE COMPETITION ACT 4(2).

30
DTOD has contravened Section 4(2) as it is an DTOD cannot be held liable under Section 4(2) as it
enterprise for the purpose of this section [A], it is is not an enterprise [A], it does not occupy a
dominant in the relevant product and geographical dominant position in the market [B] and its actions
market [B], and it has abused its dominant do not constitute abuse of a dominant position. [C]
position in the relevant markets [C]
A. DTOD is not an enterprise for the
A. DTOD is a enterprise for the purpose of
purposes of section 4(2) of the
section 4(2) of the Competition Act
Competition Act.
As per Section 2(h) of the Competition Act
Section 4 (1) of the Competition Act clearly states
government entities engaged in sovereign functions
that no enterprise or group shall abuse its dominant
such as welfare functions that are non-delegable
position. Therefore, being an enterprise is a necessary
and inalienable functions of the state. Therefore,
condition. DTOD is not an enterprise as defined
commercial functions are not considered
under Section 2(h) of the 2002 Competition Act. An
sovereign. DOTD is primarily a department of the
enterprise can refer to a department of the
Government’s machinery providing for services. It
government if it has been engaged in any activity
outrightly exerts control over Vijeta, by
relating to the production, storage, supply,
contributing to the entire funding and further
distribution, acquisition or control of articles or
appointing the Board of Directors (operational
goods or services. DOTD, however, is not involved
control). Hence it qualifies as an enterprise.
in the production, storage, supply or distribution of
B. DTOD occupies a dominant position in
goods and services. Therefore, DTOD cannot be
the relevant market
considered as an enterprise for the purposes of
To understand dominance in a market the relevant
Section 4(2).
product and geographical market has to be
determined once it is defined the dominant B. DOTD does not occupy a dominant position
position of the entity can be determined. in the relevant market.
A Conjoined reading of Section 2(r) and Section
In order to determine whether an enterprise holds a
19(5) lays down the definition for RM. Further
dominant position, the relevant market must first be
Section 2(s) & 2(t) read with Section 19(6) and
established. [1] It is submitted that in the determined
19(7) respectively define and lay down the factors
relevant market, DTOD does not occupy a dominant
to be considered for determining RPM and RGM.
position. [2]
The following would be the relevant product and
geographic market. 1. The relevant market must be established.
For Section 4 of the Competition Act to be
RPM- Market for mobile and software applicable, the entity has to be in a dominant

31
applications position.34 To hold a dominant position, the

Section 2(t) of the Competition Act prescribes enterprise must be a market player in the relevant
substitutability and interchangeability as two market, which could be a geographical market and a
parameters for determining RPM. An App product market. Section 19(7) of the 2002
developer can either enlist the app on Appstore, Competition Act lists the considerations to determine
play store or it may enter into agreements with the relevant product market, involving analysis of
mobile companies for pre-installing the apps in goods and services, consumer preferences, and
their phones for user’s benefit. These constitute production.
two separate PMs. Pre installation gives the app an Presently, the relevant market is the domestic market
additional impetus to begin with, as a result it is of Genovia related to the products of mobiles and
preferred more, better among the consumers. applications because DTOD’s functions are
Owing to the difference in customer’s preferences concerned with this market.
also they are not substitutable, interchangeable 2. DTOD does not hold a dominant position
hence constitute different RPM. in the present relevant market.
RGM- it comprises the entire landmass
Dominant position refers to a position of economic
(nation) of State of Genovia.
strength whereby an enterprise in the relevant market
The Government of Genovia has levied regulatory
can operate independently of competitive forces
trade barriers under the aegis of import tariffs on
prevailing in the relevant market or affect its
Panemese goods. Additionally, Mango products
competitor or consumer or the relevant market in its
can be bought from online platform as well, this
favour. The position of strength is usually indicated
means that citizens/residents [apt usage may be
by an enterprise’s market share.35 Furthermore, the
residents] of Genovia enjoy accessibility to Mango
presence of entry barriers for new entrants to the
products. DTOD holds a dominant position as it
market as well as a high cost to procure alternative
enjoys financial prowess in Genovia [1] and its
goods and services for consumers also help determine
application Offix holds considerable market share
dominance.36
in the relevant product and geographical market
The considerable presence of competitors in
[2]
Genovia’s software application market shows that
1. Financial Prowess of DOTD
Vijeta and DOTD did not have substantial market
The DOTD contributed massively for the R&D at
power. There were also no barriers to enter the

34
Devinder Sharma v. Ashiana Housing Ltd., [2020] 162 SCL 821 (CCI), Case No. 22 of 2020; Deepak Sultania v.
Security Printing and Minting Corporation of India, [2021] 163 SCL 388 (CCI), Case No. 41 of 2020 .
35
Hoffmann-La Roche v. Commission, [1979] ECR 461.
36
The National Stock Exchange of India Ltd. v. Competition Commission of India, 2014 CompLR 304
(COMPAT).

32
Vijeta. Being a department of the Government, market since various other substitutable goods and
incepted to fulfil the dream of technological self- services were available to the consumers. Therefore,
sufficiency, the DOTD (in most probability) has DTOD did not have a dominant position in the
access to government treasury. It invested heavily in relevant market.
Vijeta for accomplishing the same goal. It also
C. Even if it is in a dominant position, DOTD is
engaged other government departments and
not liable under section 4(2).
ministries to promote Vijeta products (earn
DTOD’s conduct does not contravene Section 4(2)
goodwill). Conclusively high financial strength is
because it did not impose any unfair or discriminatory
noticeable.
condition in purchase or pricing of goods and
2. DTOD’S application Offix holds
services. [1] DTOD did not limit the technical
considerable market share in the
development of goods and services to the prejudice
relevant product and geographical
of consumers. [2] It did not indulge in practice
market
leading to denial of market access [3] and did not
The whole purpose of establishing DTDO as a
make any contract subject to acceptance of
standalone and separate ministry was to achieve
supplementary obligations by the parties. [4] Finally,
Genovia’s technological advancement and
it did not use its dominant position in one relevant
independence (self-sufficiency), hence it's ingrained
market to enter into or protect any other relevant
in the agenda of DTDO to promote, incentivise
market. [5]
generate in Genovia policy. [done by furthering the
1. DTOD did not impose any unfair or
locally, nationally developed apps over their
discriminatory condition in purchase or
competitors in market]
pricing of goods and services under
Further, each component of a mobile ecosystem is
section 4(2)(a).
regarded as a separate RM. The instruction from
According to section 4 (2) (a) (i), there is an abuse of
DOTD was to ‘only’ pre-install apps which are
dominant position if an enterprise imposes unfair
‘Generated in Genovia’. Further, suggested apps
conditions on the purchase or sale of goods or
entirely consist of Genovian Apps. The above
services. Presently, DOTD simply instructed Vijeta to
mentioned facts prove that there is no close
pre-install Genovian apps and software on Mango
competitor(s) in the RM. [Fast Track case]
smartphones. It did not bar installation of other
Additionally, the offix apps which are generated in
applications later. Therefore, no unfair conditions
genovia, took over 32 % of the market share in
were imposed by DTOD.
initial 6 months, this portrays the market share
2. DTOD did not limit the technical
enjoyed by DOTD.
development of goods and services to the
C. DTOD has abused its dominant position in
prejudice of consumers.

33
the relevant markets Restricting the technical development of goods and
DTOD has abused its dominant position as only services is abuse of dominant position under section
apps generated in Genovia are allowed to operate 4(2)(b). Presently, DTOD did not impede
in the territorial boundary [1] and it has used its development and production, and instead promoted
dominant position tie-in the application with the it by allowing Vijeta to create its own line of
smartphone [2] applications. The apps were user-friendly and of a
1. Only apps generated in Genovia are good quality, so interests of users were not harmed.
allowed to operate in the territorial Pre-installation of apps was instructed with the aim to
boundary give a boost to Genovian apps, and not to abuse any
Restricting technological development- Owing to dominant position.
the tying concept and network effects consumers 3. DTOD did not deny access to market
will prefer (by default) use ‘Generate in Genovia’ competitors.
apps. Moreover, it being coupled with the fact that Under Section 4(2)(c) denial of market access to
other app developers do not have an equal competitors constitutes an abuse of dominant
opportunity to attract consumers discourages app position. DTOD did not deny any market access to
developers to launch apps that have to compete its competitors, since users of Mango phones were
with ‘Generate in Genovia’ apps. Such bias does free to install other applications, and furthermore,
not align with consumer’s interest in the long run DTOD is not a competitor in the market.
as it indirectly hampers further development in the 4. DTOD did not make any contract subject
field. (restricts further research) [Section 4(2) a (i)] to acceptance of supplementary
obligations by the parties.
2. DTOD has used its dominant position Section 4(2)(d) of the Competition Act prohibits any
tie-in the application with the enterprise to conclude a contract provided that
smartphone supplementary obligations which have no connection
Conditional sale of goods amounting to unfair with the subject of the contract are accepted. Being a
practices. DOTD exercises a de facto control over Government Advisory Body, DTOD did not
Vijeta. So, Vijeta had no other realistic choice than conclude any contracts. DTOD’s instructions to
to implement the instructions by DOTD of pre- Vijeta to pre-install Genovian applications did not
installing offix apps and recommending only such hinder consumers from later installing other non-
apps which are generated in Genovia. Genovian applications, so there were no
[Arguendo] Alternatively, it can be contended that supplementary obligations imposed.
Vijeta’s acts are attributable to DOTD, calling for a 5. DTOD did not leverage its dominant
joint and several liability. Due to the extent of position in one relevant market to protect

34
control [economic control through funding and its position in another relevant market.
operational, managerial control through BOD at An enterprise which leverages its dominant position
Vijeta] DOTD exercises over Vijeta and the in one relevant market to protect its position in
intended purpose for formation of Vijeta. another relevant market is liable for abuse of
Incentives accorded to give impetus to R&D at dominant position under Section 4(2)(e). Therefore,
Vijeta. Moreover, Section 2(h) makes enterprise there should be more than one relevant market in
liable for acts done by Vijeta. consideration.
Primarily, DTOD did not have a position as a market
player in any relevant market, being merely an
Advisory Body. There is no other relevant market
that DTOD could enter or have a position in, so its
actions cannot amount to attempting to protect its
positions in another relevant market. Therefore,
DTOD cannot be held liable under Section 4(2)(e).

ADDITIONAL ARGUMENTS
● The Opposite Parties may argue that DTOD cannot be held liable for the actions of Vijeta because
they are distinct entities.
● The Opposite Parties may argue that DTOD’s actions are part of its sovereign functions.

35