11th Mahamana Malaviya National Moot, 2024

THE HON’BLE SUPREME COURT OF BANARAS

Under Art. 136 of the Constitution of Banaras

In the matter between:

Special Petition no. 300397 of 2023
Ganges………Appellant

Versus

Competition commission of Banaras & Door Mart………...Respondent

Clubbed with
Special Petition no. 221096 of 2023
Ganges ……...Appellant

Versus

Banaras Vyapar Mahasangh………...Respondent

MEMORIAL ON BEHALF OF THE RESPONDENT

[Counsel appearing on behalf of Respondents: Competition Commission of Banaras, Door

Mart, Banaras Vyapar Mahasangh]

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 TABLE OF CONTENTS

List of Abbreviations 3
Index of Authorities 4

Statement of Jurisdiction 5
Statement of Facts 6

Statement of Issues 8
Summary of Arguments 9-12

Arguments Advanced 13-17

Issue 1: Whether using the dominant position to decide the price 13-14
tags (overcharging or deceptive charging) in the markets
punishable under Indian laws?

Issue 2: Whether exercise of rights by a patentee under the Patents 15-16

Act, 1970 is subjected to the jurisdiction of the CCB under the
Competition Act, 2002?

Issue 3: Whether usage of Artificial intelligence can override a 16-18

company's strict liability, preventing accusations of manipulating
results to promote its own products?

Prayer 19

LIST OF ABBREVIATIONS

3
 SC Supreme Court
SCC Supreme Court Cases
Hon’ble Honourable
AI Artificial Intelligence
Sect. Section
v. versus

INDEX OF AUTHORITIES

CASES:

4
 1. Toy “R” Us v. FTC (2000)
2. Catalano, Inc. v. Target Sales, Inc. (1980)
3. Ericsson v. CCI (2016)
4. Monsanto v. CCI (2020)
5. United States v Microsoft (2000)
6. T-604/18 Google and Alphabet v Commission (2022)
7. ACM V Apple App store (2021)
8. Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India
(2023)

STATUTES:

1. The Competition (Amendment) Act 2007

2. The Patent Act, 1970
3. Sherman Anti-Trust Act 1890

BOOKS REFERRED:

1. The Interface between Intellectual Property and Competition Law by Stephen D. Andermnan

WEBSITES REFFERRED:

1. https://www.scconline.com/?gad_source=1&gclid=EAIaIQobChMIoI-uhoXvgwMVNSiDAx22-
gozEAAYASAAEgKgbvD_BwE
2. https://supreme.justia.com/
3. https://www.manupatrafast.com/?t=desktop

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 STATEMENT OF JURISDICTION

The Appellant has approached this Hon’ble Supreme Court under Article 136 of the
Constitution of India, which reads as hereunder:

Article 136: Special leave to appeal by the Supreme Court:

1. Notwithstanding anything in this Chapter, the Supreme Court may, in its

discretion, grant special leave to appeal from any judgment, decree,
determination, sentence or order in any cause or matter passed or made by any
court or tribunal in the territory of India

2. Nothing in clause (1) shall apply to any judgment, determination, sentence or

order passed or made by any court or tribunal constituted by or under any law
relating to the Armed Forces

6
 STATEMENT OF FACTS

Banaras, Southeast Asian constitutional monarchy is a thriving manufacturing centre with

a growing tech sector. Increased internet access has contributed to the success of
Ganges.com, a well-known e-commerce platform that began as a marketplace before
branching out into online shopping and bringing in a healthy INR 120 billion in revenue
in 2021. Banaras, which offers a variety of goods and services, has grown to be a
significant worldwide participant in the online shopping sector owing to their cheap
internet rates. Ganges.com's transition into developing its own brands has strengthened its
standing in the ever-changing tech-driven economy of Banaras.

To improve the customer experience, it has developed a number of artificial intelligence-

based solutions, such as Voice Purchasing, E-commerce Lens, Buy Box, and Anticipatory
shopping. Many patented Ganges technologies are included in the Gen-Z standards
established by the Banaras E-commerce Standards Institute (BESI). Companies that are
seeking Gen-Z compliance have to use Ganges' technology, encouraging standardisation.
Ganges promotes an open market by licencing its standard technologies on Fair,
Reasonable, and Non-Discriminatory conditions in accordance with the IPR policy of
BESI. They provides warehousing and shipping services through 'Fulfilled by Ganges
(FBG),' which increases consumer preferences for selected merchants because of the
platform's effective services.

Kashi Chronicles launched an investigation in February 2022, charged Ganges with

participating in vertical agreements, and preferred seller treatment, such as reduced costs
and access to only-available offers, preference for its own house brands. Additionally, it
was alleged that it manipulated search results to highlight its products and used seller data
that was not available to the public to influence internal marketing initiatives. Following
that, Banaras Vyapar Mahasangh claimed that Ganges was using its position of dominance

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 to engage into vertical agreements, impose price parity terms on third-party vendors, and
more.

The controversy led to an extensive parliamentary investigation regarding the accusations

made against Ganges.com. Ganges' CEO, Ms. Aisvaria Subramanian, was called before a
Joint Parliamentary Committee in response. She denied any intentional misuse of non-public
data for internal brand development and disputed the accusations as unsubstantiated. Ganges
emphasises its role in giving small sellers opportunities in the virtual marketplace. She
claimed that all the essential functions of the website are automated with AI algorithm and no
self preferential methods were used to promote the quality of user experience with relevant
product recommendations. Therefore, cannot take responsibility on behalf of an Artificial
Intelligence system.

In October 2023, Banaras Vyapar Mahasangh (BVM) accusing Ganges.com of anti-

competitive behaviour filed a complaint to the Competition Commission of Banaras (CCB).
BVM claimed that Ganges decreased exposure for vendors not using its affiliated services,
bundled services, and used algorithmic self-preferencing. The organisation contended that
Ganges's dominating position compromised vendors' price independence by impeding market
access and compelling them to utilise its automated pricing methods violating the competition
act. Ganges issued a notice to Door-mart, a recent entrant into the e-commerce market, in
June 2021, claiming that Door-mart was infringing on its critical Gen-Z patents. Door-mart
approached the CCB following two years of negotiations, alleging Ganges had abused its
dominating position by imposing excessive royalty rates and challenging licencing
restrictions.

Ganges disputed the CCB's authority, but the CCB directed its Director General to launch a
probe. Ganges appealed this ruling to the Kashi High Court, which maintained the CCB's
ruling. Ganges then appealed the High Court's ruling with a Special Leave Petition (SLP) at
the Banaras Supreme Court.

The Competition Commission of Banaras (CCB) ordered the Director General (DG) to look
into Door-Mart's complaint against Ganges.com and the claims made by Banaras Vyapar
Mahasangh (BVM). According to the DG's conclusions, Ganges indeed was abusing its

8
position by entering into anti-competitive deals with platform vendors. It contended that it
had not signed any contracts that would have hindered competition. The algorithmic self-
preferencing is not inherently anti-competitive, highlighting the significance of innovation
and customer welfare in its policies. The CCB ordered on December 22, 2023, that Ganges
had misused its dominant position by putting third-party merchants at a disadvantage
violating platform neutrality. The National Company Law Appellate Tribunal (NCLAT)
upheld the CCB's order against Ganges’s appeal. Ganges filed an appeal with the Supreme
Court of Banaras.

STATEMENT OF ISSUES

Issue 1: Whether using the dominant position to decide the price tags (overcharging or
deceptive charging) in the markets punishable under Indian laws?

 Whether the ganges.com s’ brand listing agreement with OnePlusTwo to sell its latest
smartphones is illicit and amounts to unsavoury usage of monopolistic power?
 Is it illegal for competitors to fix prices for their products?

Issue 2: Whether exercise of rights by a patentee under the Patents Act, 1970 is subjected to
the jurisdiction of the CCB under the Competition Act, 2002?

 Whether there are any correlations between Competitive law and Patent law in
western countries such as United States of America and European Union?

Issue 3: Whether usage of Artificial intelligence can override a company's strict liability,
preventing accusations of manipulating results to promote its own products?

 Is market dominance alone being illegal under any court of law?

 Is self-preferencing deceptive and whether can it be added in consumer protective
statutes?
 Can a predominant tech-industry be sued for self-preferencing its products or allied
companies?

9
 SUMMARY OF ARGUMENTS

Issue 1: Whether using the dominant position to decide the price tags (overcharging or
deceptive charging) in the markets punishable under Indian laws?

i) It is not illegal to hold dominant position in the market but to abuse the power of the
position with techniques like imposing unfair conditions, predatory pricing, limiting
production, creating barriers, denying market access, using dominant position in one market
to gain advantages in another market is prohibited in India under the Competition
(Amendment) Act 2007.

ii) Section 4 of competition Act states as follows Abuse of dominant position.

iii) The competition commission of India is the apex authority that looks over the competitive
practices of the companies ensuring fair, innovative, competitive market for all the companies
which in turn is ensuring benefits for the consumers like various options, substitutes,
availability of new products and technology, fair price among others.

iv) Every company has their right to wok and trade in their own ways but it is when the
practices followed by a certain company which adversely affects the other companies in the
market the competition commission of India takes measures to stop it.

 Whether the ganges.com s’ brand listing agreement with OnePlusTwo to sell its
latest smartphones is illicit and amounts to unsavoury usage of monopolistic
power?

i) The classic example for analysing this issue is in the case Toy "R" Us v. FTC
(2000)in which the accused company entered into a contract with toy manufacturers
that discounts warehouse club stores only on certain terms (that were favourable to
Toys "R" Us and unfavourable to the warehouses).

ii) FTC fined a lump sum of $1.3 million for violating the FTC regulations.

 Is it illegal for competitors to fix prices for their products?

i) Agreements between competitors to fix prices for services or products are always
per se illegal as stated in the case Catalano, Inc. v. Target Sales, Inc. (1980).

Issue 2: Whether exercise of rights by a patentee under the Patents Act, 1970 is
subjected to the jurisdiction of the CCB under the Competition Act, 2002?

10
i) In the issue of the supremacy between Competition act and the Patent Act, the courts of
India have always taken a case-to-case approach. Delhi High court in its infamous judgement
Ericsson v. CCI (2016), ruled that the Competition Commission of India (CCI) can intervene
in patent licensing disputes under S. 3 and 4 of the competitions Act

The Delhi High court again acquiesced with its previous judgement in the case Monsanto v.
CCI (2020).

ii) But recently, a division bench in Delhi High court has delivered a judgement in
Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India (2023), that
the Patents Act supersedes the Competition Act insofar as allegations of unreasonable
conditions in license agreements, abuse of one’s status as a patentee, the necessary inquiry
into these allegations and eventually the relief that can be granted.

iii) So, from this, it is quite obvious that the approach of the Indian courts in the issue of
supremacy between Patents Act and Competition Act

 Whether there are any correlations between Competitive law and Patent law in
western countries such as United States of America and European Union?

i) In United States v Microsoft (2000), it has been held that an owner of patent does
not have absolute right to use property in any manner without restrictions.

ii) It would violate the competition law if a company possesses monopoly power and
there is wilful acquisition or maintenance of that power which an enterprise as
distinguish from growth or development as a consequence of superior product,
business acumen or historic accident.

From the given facts, it is evident that the western legal system has evolved to greater
extent than the Indian jurisdiction in the issue of coalition between Competition act
and Patent laws.

Issue 3: Whether usage of Artificial intelligence can override a company's strict

liability, preventing accusations of manipulating results to promote its own products?

11
i) But applying these kinds of advanced technologies that has not yet been completely
understood by human cognizance should not eclipse itself from amounting to strict liability.

ii) Such as the European Commission which recently published a proposal for a directive on
adapting civil liability rules to artificial intelligence names as 'AI liability directive' in
September 2022.

iii) The Commission proposes to complement and modernise the EU liability framework to
introduce new rules specific to damages caused by AI systems.

 Is market dominance alone being illegal under any court of law?

i) Market dominance is, as such, not illegal under any provision or laws.

ii) However, dominant industries have a special responsibility not to abuse their
powerful market position by restricting competition, either in the market where they
are dominant or in separate markets.

 Is self-preferencing deceptive and whether can it be added in consumer

protective statutes?

i) Self-preferencing using deception, can be and is addressed under consumer

protection statutes.

ii) The issue arises most often in the context of digital platforms collection and use of
consumers personal data for their commercial benefits.

 Can a predominant tech-industry be sued for self-preferencing its products or

allied companies?

i) There has been in certain cases were e-industries has been sued for self-preferencing
it's products as an illegal advantage.

ii) In Case T-604/18 Google and Alphabet v Commission, tech heavyweight google
was found guilty to preferencing "Frogle", an google product in its search engine.

iii) It was fined a lump sum of €2.42 billion euros by European commission for
abusing dominance as search engine by giving illegal advantage to own comparison-
shopping service.

12
 Similarly, in the case ACM V Apple App store (2021) case, the Dutch Competition
Authority imposed a penalty on Apple for requiring dating-app providers that appear
in Apple's App Store to use Apple's payment services.

iv) These cases are fine examples that self-preferencing in e-commerce industry using
algorithms such as AI are illicit and are subjected to jurisdiction of court of law.

ARGUMENTS ADVANCED

Issue 1: Whether using the dominant position, deciding the price tags (overcharging or
deceptive charging) in the markets punishable under Indian laws?

13
It is not illegal to hold dominant position in the market but to abuse the power of the position
with techniques like imposing unfair conditions, predatory pricing, limiting production,
creating barriers, denying market access, using dominant position in one market to gain
advantages in another market is prohibited in India under the Competition (Amendment) Act
2007. It is not the dominant position that is illegal it is the abuse of that position which is
prohibited.

Section 4 of competition Act states as follows

1
Abuse of dominant position. — (1) No enterprise or group shall abuse its dominant
position.

(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise or a
group,—

a. Directly or Indirectly, imposes unfair or discriminatory- (i) condition in purchase or

sale of goods or service (ii) price in purchase or sale (including predatory price) of
goods or service

b. limits or restricts-

i. production of goods or provision of services or market therefor

ii. technical or scientific development relating to goods or services to the

prejudice of consumers

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

1
Competition (Amendment) Act, 2007

14
 e. Uses its dominant position in one relevant market to enter into, or protect, other
relevant market.

The competition commission of India is the apex authority that looks over the competitive
practices of the companies ensuring fair, innovative, competitive market for all the companies
which in turn is ensuring benefits for the consumers like various options, substitutes,
availability of new products and technology, fair price among others.

Every company has their right to wok and trade in their own ways but it is when the practices
followed by a certain company which adversely affects the other companies in the market the
competition commission of India takes measures to stop it.

 Whether the ganges.com’s brand listing agreement with OnePlusTwo to sell its
latest smartphones is illicit and amounts to unsavoury usage of monopolistic
power?

The classic example for analysing this issue is in the case Toy “R” Us v. FTC (2000)2
in which the accused company entered into a contract with toy manufacturers that
discounts warehouse club stores only on certain terms (that were favourable to Toys
“R” Us and unfavourable to the warehouses). FTC fined a lump sum of $1.3 million
for violating the FTC regulations.

 Is it illegal for competitors to fix prices for their products?

Agreements between competitors to fix prices for services or products are always per
se illegal. The US Supreme court has called horizontal-price fixing an “archetypal
example” of an unlawful restraint while delivering a judgement in the case Catalano,
Inc. v. Target Sales, Inc. (1980)3.

Issue 2: Whether exercise of rights by a patentee under the Patents Act, 1970 is
subjected to the jurisdiction of the CCB under the Competition Act, 2002?

2
Toys “R” US, Inc. v. Federal Trade Commission, 221 F.3d 928 (7th Cir. 2000)
3
Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980)

15
In the issue of the supremacy between Competition act and the Patent Act, the courts of India
have always taken a case-to-case approach. Delhi High court in its infamous judgement
Ericsson v. CCI (2016)4, ruled that the Competition Commission of India (CCI) can
intervene in patent licensing disputes under S. 3 and 4 of the competitions Act

The Delhi High court again acquiesced with its previous judgement in the case Monsanto v.
CCI (2020)5.

But recently, a division bench in Delhi High court has delivered a judgement in
Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India (2023),
that the Patents Act supersedes the Competition Act insofar as allegations of unreasonable
conditions in license agreements, abuse of one’s status as a patentee, the necessary inquiry
into these allegations and eventually the relief that can be granted.

So, from this, it is quite obvious that the approach of the Indian courts in the issue of
supremacy between Patents Act and Competition Act

 Whether there are any correlations between Competitive law and Patent law in
western countries such as United States of America and European Union?
In western laws the approach towards the relation between Competitive laws and
patent laws are quite opposite compared to Indian legal approach. Competition law
maximizes social welfare by condemning monopolies while Patent law does the same
by granting temporary monopolies.
In United States v Microsoft (2000)6, it has been held that an owner of patent does
not have absolute right to use property in any manner without restrictions. It would
violate the competition law if a company possesses monopoly power and there is
wilful acquisition or maintenance of that power which an enterprise as distinguish
from growth or development as a consequence of superior product, business acumen
or historic accident.

4
Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India, 2016
5
Monsanto Holdings (P) Ltd. v. CCI, 2020
6
U.S. v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001)

16
 Steven D. Anderman in his book “The Interface between Intellectual Property and
Competition Law7” states that Competition laws places limits on the free exercise of
the exclusive rights granted by Patent Laws to the monopolies.

From the given facts, it is evident that the western legal system has evolved to greater extent
than the Indian jurisdiction in the issue of coalition between Competition act and Patent laws.

Issue 3: Whether usage of Artificial intelligence can override a company's strict liability,
preventing accusations of manipulating results to promote its own products?

The usage of Artificial intelligence (hereinafter “AI”) often justified to improve decision-
making processes in a number of sectors such as health, mobility or agriculture. But applying
these kinds of advanced technologies that has not yet been completely understood by human
cognizance should not eclipse itself from amounting to strict liability. Liability rules that
determine how damage caused by human activities or goods for which humans are considered
liable by law.

Human’s incomprehension on these kinds of advanced technologies should not act as an

intriguing loophole for tech-industries to escape from strict liability.

Moreover, in recent times governmental organizations have come forward to implement

frameworks for the damages caused by AI systems. Such as the European Commission which
recently published a proposal for a directive on adapting civil liability rules to artificial
intelligence names as 'AI liability directive' in September 2022. The Commission proposes
to complement and modernise the EU liability framework to introduce new rules specific to
damages caused by AI systems.

 Is market dominance alone being illegal under any court of law?

Market dominance is, as such, not illegal under any provision or laws. However,
dominant industries have a special responsibility not to abuse their powerful market
position by restricting competition, either in the market where they are dominant or in

7
Anderman SD, ed. The Interface Between Intellectual Property Rights and Competition Policy. Cambridge:
Cambridge University Press; 2007:427-428.

17
 separate markets. Otherwise, there would be a risk that a company once dominant in
one market (even if this resulted from competition on the merits) would be able to use
this market power to cement/further expand its dominance, or leverage it into separate
markets.

 Is self-preferencing deceptive and whether can it be added in consumer

protective statutes?

Self-preferencing using deception, can be and is addressed under consumer protection

statutes. The issue arises most often in the context of digital platforms collection and
use of consumers personal data for their commercial benefits. For example, a business
might mislead consumers about the collection and use of personal location data. To the
extent that this deceit eventually affords the business a significant and unfair
advantage over its competitors in designing and developing related products, the
deceitful conduct can be prosecuted under existing antitrust and consumer protection
statutes.

 Can a predominant tech-industry be sued for self-preferencing its products or

allied companies?

The answer for this question is simple, yes. There has been in certain cases were e-
industries has been sued for self-preferencing it’s products as an illegal advantage. In
Case T-604/18 Google and Alphabet v Commission8, tech heavyweight google was
found guilty to self-preferencing “Frogle”, an google product in its search engine. It
was fined a lump sum of €2.42 billion euros by European commission for abusing
dominance as search engine by giving illegal advantage to own comparison-shopping
service.

Similarly, in the case ACM V Apple App store (2021)9 case, the Dutch Competition
Authority imposed a penalty on Apple for requiring dating-app providers that appear
8
T-604/18 Google and Alphabet v Commission, 2022
9
ACM V Apple App store (2021)

18
 in Apple’s App Store to use Apple’s payment services. In essence, Apple was deemed
to have used its dominance of the App Store to restrict the app developers’ freedom of
choice in picking their own payment processors.

These cases are fine examples that self-preferencing in e-commerce industry using
algorithms such as AI are illicit and are subjected to jurisdiction of court of law.

PRAYER

Wherefore in the lights of the facts stated the issues raised, arguments advanced and
authorities cited, it is most humbly and respectfully prayed before this Hon’ble Supreme
Court of Banaras, which it may please to:

1. Declare that it is illegal to abuse the dominant position in the market using malafide
ways as per section 4 of The Competition act.

2. Declare that the mere possession of a patent does not guarantee that technology in
question will be used in anti – competitive way.

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 3. Request to regulate the use of artificial intelligence to prevent the use of AI as a
cover for malafide intent.

4. Request to hold the Appellant accountable for its abuse of Dominant position.

And/or grant any other order in favour of the Petitioners that this Honourable Supreme Court
may deem fit in the eyes of equity, justice and good conscience.

Date: sd/-

Place: Counsel
for the defendant

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