NCLAT & Delhi High Court weigh in on MMT-Go’s appeal Page 3

NCLAT sets aside Commission’s order letting DLF off the hook and
Page 3
remands back for reconsideration

NCLAT sends cartel matter back to CCI for re-calculation of

penalty amount while issuing a direction to the Maharashtra Page 3
police to conduct an enquiry into possible corruption
Other Developments Page 4

• Reports of the Standing Committee on Finance Page 4

• 5 dawn raids in 2022; 14 overall Page 5
We wish all our readers a very happy, healthy, and peaceful New Year!

The Competition Commission (CCI) continued to be headless in December with the new Chairperson still to be
appointed leading to another stagnant month for the Commission. However, there was still plenty of activity in
the space with the Director General of Investigation (DG) conducting two raids back-to-back, the Parliamentary
Standing Committee releasing two reports after considering the Competition (Amendment) Bill, 2022, and the
National Company Law Appellate Tribunal (NCLAT) passing three orders, one of which found its way to the Delhi
High Court.

NCLAT & DELHI HIGH COURT WEIGH IN ON
MMT-GO’S APPEAL
As reported in our November newsletter (here) the
CCI by way of its order dated 19.10.2022 had
imposed a monetary penalty of INR 2234 million on
India’s largest hotel booking intermediary – Make
My Trip-GoIbibo (MMT) for abusing its dominant
position. More importantly, it had also directed
MMT to modify certain contractual terms with the
hotels listed on its platform.
supplementary investigation report on 08.09.2017.
Interestingly, this time the DG Report found that
DLF was not dominant in the relevant market.
The entire bone of contention was whether the CCI
has the power to order a further investigation. The
Tribunal held it did not. On reading Section 26 of the
Act and Regulation 20(6) of the General
Regulations, the Tribunal held that CCI must
consider only the first report of the DG and pass an
order after hearing the parties afresh.

In appeal, the Tribunal, on 06.12.2022, directed
that 10% of the penalty amount be deposited while
admitting the appeal for hearing, and absent any
stay of the CCI’s order. The perhaps poorly worded
order appeared to condition the admittance of the
statutory appeal on the deposit, which MMT
argued only Parliament had the authority to do, and
headed to the High Court for relief.
The Delhi High Court, vide order dated 14.11.2022
directed MMT to deposit 10% of the total penalty
subject to which the remaining 90% of the penalty
amount would be stayed until adjudication by the
NCLAT.
NCLAT SETS ASIDE COMMISSION’S ORDER
LETTING DLF OFF THE HOOK AND
REMANDS BACK FOR RECONSIDERATION
Vide an order dated 21.12.2022, the NCLAT set
aside CCI’s order dated 31.08.2018 against DLF, one
of India’s largest real estate developers, on
procedural grounds.
The DG, vide its report dated 18.03.2016, found DLF
to have abused its dominant position by imposing
unfair and discriminatory terms in its contracts with
apartment allottees. However, the CCI on
09.11.2016, passed an order, directed the DG to
conduct a further investigation on certain specific
aspects, following which, the DG submitted
NCLAT SENDS CARTEL MATTER BACK TO
CCI FOR RE-CALCULATION OF PENALTY
AMOUNT WHILE ISSUING A DIRECTION TO
THE MAHARASHTRA POLICE TO CONDUCT
AN ENQUIRY INTO POSSIBLE
CORRUPTION
NCLAT vide order dated 23.12.2022 remitted the
matter back to the CCI to reconsider the maximum
penalty imposed on the parties. The appeals arose
out of the final order of the CCI dated 01.05.2018,
through which penalties were imposed for rigging
tenders floated by the Pune Municipal Corporation
for Organic and Inorganic Solid Waste Processing.
According to the Appellants the penalty was
imposed at the maximum rate of 10% of the
turnover on all the parties without justifiable
reasons given that the role of each party was
significantly different. The NCLAT held that even
though the CCI has the power to impose a
maximum penalty of 10%, this should not be done
in an indiscreet manner and an opportunity should
be given to the parties to be heard when a higher
penalty is being imposed.
Interestingly the NCLAT also issued directions to the
Director General of Police, Maharashtra to
investigate the role of the Pune Municipal
Corporation and its employees, who the DG had
found to be complicit in the rigging of the tender.
OTHER DEVELOPMENTS
Reports of the Standing Committee on
Finance
As reported in our December newsletter, the
Competition (Amendment) Bill, 2022 was all set to
be taken up by the Standing Committee on Finance
for consideration and adoption. Vide two reports
dated 13.12.2022 and 22.12.2022, the
Parliamentary Committee released its Fifty-Second
and Fifty-Third Report respectively.
Fifty-Second Report of the Standing
Committee on Finance: Competition
(Amendment) Bill, 2022
The Report focused on nine major issues in the Bill
and came out with significant recommendations:
i. Deal Value Threshold
While the Committee upheld the proposed
introduction of the controversial deal value
threshold, it raised one primary concern – that no
guidance was provided on how to calculate the
value and terms such as ‘direct/ indirect and
deferred consideration’ would need elaboration.
Accordingly, it suggested suitable modifications to
the draft Bill so that the Commission would have
the power to elaborate on this by way of
regulations.
ii. Definition of ‘Control’
Again, while upholding the introduction of the
‘material influence’ standard as the test for
determining control, the Committee recommended
that more guidance be provided by way of
regulations framed by the CCI.
iii. Procedural Timelines for M&A approvals
The Bill had proposed to reduce the timeline
utilized by the CCI to approve combinations from an
overall 210 days to 150 days, and form a prima facie
opinion from 30 to 20 days. The Committee noted
however that reducing the timelines would place
the “already understaffed” CCI under undue
pressure and increase its burden. Hence, it
recommended that the timelines remain
unchanged.
iv. Ability of DG to depose legal advisors
Thankfully, in line with earlier DSK comments
submitted on the draft Bill, the Committee noted
the rather preposterous suggestion that the DG be
given the power to examine ‘legal advisors’ of an
enterprise, and strongly recommended that the
clause must clearly specify that “nothing in this
section shall be in contravention to the Indian
Evidence Act 1872 or any other Act that protects
attorney-client privilege.”
v. Settlements and Commitments
Following the footsteps of the anti-trust regime in
the EU and the USA, the Bill proposed to introduce
settlements and commitments for the first time for
the provisions of vertical restraints and abuse of
dominance (Sections 3(4) and 4 of the Principal
Act).
The Committee highlighted three broad issues in
the clauses:
(a) It was noted that the proposed Section 48A (4)
and 48B (4) gave ‘any other party’ the liberty to
file an objection/suggestion to the settlement/
commitment proposal. The Committee noted
that such power could result in interference by
third parties and may end up compromising the
confidentiality of the matter. Thus, it insisted
on the removal of such other parties from the
clause and suggested that if at all the CCI does
want to include them, then such an obligation
must be discretionary.
(b) The Bill has given the CCI the sole power to
reject a proposal, which is the only way out for
the parties. The parties to a settlement or a
commitment must be given the option to
withdraw their respective applications on their
own accord.
(c) The Committee made another crucial
recommendation by suggesting the expansion
of scope of settlements to include “cartels” as
well. It further goes on to deliberate that the
Bill is rather silent on whether such proposals
for settlement or commitment need an
‘admission of guilt’.
However, in our opinion, the leniency regime is the
primary tool used by antitrust agencies worldwide
and it has been proved to be quite effective. Care
must be taken to consider whether including cartels
within the ambit of settlements would dent the
incentive of parties to go in for leniency.
vi. Hub and Spoke Cartels
While the Committee agreed with its proposed
inclusion, it recommended clarity on the meaning
of ‘active participation in the agreement’. It
recommended that intent of the entities not
horizontally placed with the cartelists be first
proven before making them liable.
vii. Requirement of a Judicial Member
Ever since the Delhi High Court’s judgment in
Mahindra v. CCI in April 2019, the community has
been awaiting the appointment of a judicial
member to the Commission’s ranks. This never
materialized. The Committee however noted that
since the matter is sub-judice before the Supreme
Court it would be appropriate to await its final
order.
viii. IPR as Defence of Abuse of Dominant Position
The Committee raised a concern that though the
defence of IPR is granted to agreements falling
under the ambit of Section 3, the Bill failed to
expand the same to Section 4 of the Act, dealing
with abuse of dominance. The Committee opined
that stripping entities which are being investigated
for abuse of dominance of such a defence, was
incorrect and therefore recommended its inclusion
in Section 4.
ix. Effects-Based Test
Finally, the Committee also recommended that the
effects-based test applicable to Section 3
agreements be extended to Section 4 as well.
Fifty-Third Report of the Standing
Committee on Finance: Anti-Competitive
Practices by Big Tech Companies
nd
Following closely on the heels of the 52 report,
the Committee also released the 53rd Report after
meeting with representatives of several companies
including MMT, Oyo, PayTM, Flipkart, Zomato,
Swiggy, Ola, Uber India, Amazon India, Google
India, Facebook India, Netflix India, Apple India.
The Report, somewhat perfunctorily, recommends
sweeping and significant obligations be placed on
‘Systematically Important Digital Intermediaries’
(SIDIs) via a new ‘Digital Competition Act’.
Borrowing heavily from developments in the EU,
the UK, and recent orders passed by the CCI, the
Committee lists obligations and prohibited
activities for SIDIs, which include:
• Avoid Anti-Steering Provisions
• Avoid Self-Preferencing and ensure Platform
Neutrality
• Avoid Bundling and Tying
• Avoid using data of business users that is not
otherwise publicly available
• Notify the CCI of all M&A transactions
• Permit and enable the installation of third-
party software applications or app stores by
users
• Provide advertisers with daily information
price paid by the advertiser and remuneration
received by the publisher.
Big Tech is naturally up in arms over the report, and
it remains to be seen what exactly will come of it, if
anything.
5 dawn raids in 2022; 14 overall
The DG ended the year like it began. Over a span of
one week in December, the DG conducted its 13th
and 14th search and seizure operation, taking the
total number of raids to five for the year 2022.
A brief mention of the latest two:
i. Steel Companies
As per media report (here), on 17.12.2022, the DG
raided the premises of nine entities spread across
the states of West Bengal, Punjab, Tamil Nadu, and
New Delhi. These are relatively smaller-scale steel
companies, which have been allegedly colluding
over prices of steel products used in construction.
ii. Cement Companies
As per media reports (here and here), on
22.12.2022, the DG raided the premises of Shree
Digvijay Cement and India Cements for allegedly
forming a price cartel and rigging tenders issued by
ONGC for oil well cement.
This capped off the year that had started out with
raids being conducted at the premises of (i) several
tyre companies, namely, CEAT, Apollo Tyres, MRF,
and Continental Tyres following an investigation Flipkart; and (iii) companies involved in the business
ordered by the CCI on the basis of a complaint filed of providing Heavy Earth Moving Machineries for
by the State Government of Haryana for alleged the extraction and transportation of coal.
bid-rigging; (ii) certain resellers on Amazon and