MEMORANDUM for INFORMANT [APPENDIX]

ARGUMENTS ADVANCED

I. WHETHER THE CONDUCT OF BRAVO CONSTITUTES AN ABUSE OF

DOMINANT POSITION?

It is humbly submitted that the conduct of Bravo constitutes an abuse of its dominant
position under Section 4 of the Act, the same shall be corroborated through its argument by
establishing [A]The Relevant Market of Bravo; [B] Bravo is dominant in the relevant market
(C) Bravo has abused its dominant position in the relevant market.

I. THE RELEVANT MARKET IS ‘STREAMING OF VR GAMES IN

EYZAR’

1) It is submitted that for the purpose of determining the market power of an entity or a
group under §4 of the Act, it is essential to delineate the relevant market 1in which
the enterprise2 or group is operating. The relevant market is the area of effective
competition within which the enterprise operates3. It is an economic concept.4
2) Relevant market in common parlance refers to the market where competition takes
place.5It can be defined with reference to ‘relevant product market’ 6 and ‘relevant
geographic market’.7
A. The Relevant Product Market is the aftermarket of streaming of VR Games
3) It is humbly submitted that the relevant product market is determined after taking
into
consideration the factors enunciated under §19(5) 8 of the Act. Further, the
substitutability of the product/service is a decisive factor 9 while determining the
relevant product market.10
4) Therefore, in the present case, the product market can be further divided into:

1
Competition Act, §2(r).
2
Competition Act, §2(h).
3
Standard Oil Co of California and Standard Stations Inc v. United States, 337 US 293.
4
CCI v. Co-ordination Committee of Artists and Technicians of WB Film and Television, AIR 2017 SC 1449.
5
United States v. EL Du Pont De Nemours & Co., [1956] 351 US 377.
6
Competition Act, §2(t).
7
Competition Act, §2(s).
8
Competition Act, §19(5).
9
Abir Roy, Competition Law in India: A Practical Guide (2nd ed. 2016) 158.
10
France Telecom SA v. Commission, Case T-340/03, [2009] 4 CMLR 25, 81.
MEMORANDUM for INFORMANT [APPENDIX]

 Primary Market
5) Primary market refers to the direct market in which the goods and services of the
Enterprises directly compete with each other. Such a market is directly determined by
analysing the price-quality substitutability of the goods and services of the competing
enterprises.
6) It is humbly submitted that in the present case primary product market is “Purchase
and Sale of VR Games” as the Enterprise, i.e. Bravo is primarily involved in the
business of providing a platform for Sale and Purchase of VR Games.
 After Market
7) Aftermarket is a type of derivative market which are required to use the primary
product or services. The following parameters need to be considered while determining
the aftermarket, which is the intertwined market of the primary product–
a) Whether the consumer undertakes whole-life cost analysis at the time of
purchasing the primary product;
b) Is it possible for a consumer to switch to the aftermarket of another manufacturer;
and
c)What is the cost of switching to another primary product relative to the cost of the
spare parts?
8) When it comes to the market of electronic appliances, the Competition Commission
of India (CCI) seems to deviate from the separate aftermarket rule 11 and establishes
that the availability and accessibility of information about the aftermarket products
are sufficient enough to delineate a unified system’s market. 12 Meaning that the
aftermarket and the primary market operate as a unified market.
9) The aftermarket has to be determined by applying the three key tests established by
the CCI in the case of Shamsher Kataria v. Honda Siel Cars India Ltd.,13 namely a)
Whole Life Cycle cost analysis, b) non-substitutability and locked-in effect and c) the
magnitude of Switching Cost analysis.
10) The Whole Life-Cycle cost analysis refers to the consumer's ability to compute the
life-cycle cost of a product at the time of purchasing it and anticipation of the future
costs of ownership of the primary product by taking into account the probable
expenditure on after-market products.

11
Trend Electronics v. Hewlett Packard 2015 SCC ONLINE CCI 185
12
S.K. Mittal v. HP Inc. 2016 SCC ONLINE CCI 70
13
Shamsher Kataria v. Honda Siel Cars India Ltd, 2014 Comp LR 1 (CCI).
MEMORANDUM for INFORMANT [APPENDIX]

11) The concept of Non-Substitutability and Locked-in effect can be explained by the
fact that an aftermarket may be broader than merely the secondary products of one
brand of primary product where the secondary products of different brands of
primary product or independent secondary product bands are readily substitutable.
However, if the secondary products for different brands are not compatible or
substitutable, and a consumer requires products/services for the continued use of the
primary product, in a sense, the consumer is ‘locked in’ to use brand-specific service.
The CCI, in Shamsher Kataria v. Honda Siel, noted that since the spare parts of one
automobile brand are not substitutable with spare parts of other brands, the
consumers are ‘locked in’ and forced to purchase the brand-specific spare parts.
12) Further, the magnitude of Switching Cost is considered as the determinant factor
while deciding the existence of a separate relevant market. That means, if it is
possible to switch to another primary product to avoid higher costs in the aftermarket,
there may be a unified system’s market encompassing the primary and secondary
products. That said, just to avoid the increase in the cost of aftermarket, a consumer
who already owns a primary product will not undertake the switching costs which
can be as high as buying the game again.
13) It is humbly submitted that in the present case, the aftermarket is the “Streaming of
VR Games”. The VR gaming industry is a multiplayer gaming industry wherein the
players prefer to play games with their friends and the majority of the available
games require online streaming services, therefore it is impractical to segregate the
purchase of the VR games from the streaming services offered. Further, companies
like Bravo work on a subscription-based model wherein they take a premium fee and
provide the consumers with the facility to purchase and stream/play their games. 14
14) There exist two separate relevant product markets: one for “Purchase of VR Games”,
and the aftermarket for the “Streaming of VR games”. Both form a unified system of
the market as one cannot stream without purchasing and purchasing without any
streaming service is of no use.
15) On perusal of the aforementioned, it is submitted that the relevant market in the
present case is market for “streaming/playing of VR games”.

14
S.M. Dugar, Guide to Competition Law (6th ed. 2016).
MEMORANDUM for INFORMANT [APPENDIX]

B. The Relevant Geographical Market is Eyzar

16) It is submitted that the relevant geographical market in the instant case, ought to be
taken as the entire geographical region of the Union of Eyzar. 15 This is because, as
per the provisions of the Act, the 16Relevant Geographic Market comprises the area in
which conditions of competition are distinctly homogeneous and uniform.17
17) Additionally, for the purpose of the VR-Games market, the conditions of competition
are homogeneous pan-Eyzar and accordingly, the relevant geographical market in the
instant case ought to be taken as Union of Eyzar.
II. BRAVO IS DOMINANT IN THE RELEVANT MARKET

18) It is submitted that the aftermarket is the relevant market for antitrust analysis in the
present case as the evidence supports an inference of monopoly power in the
aftermarket that competition in the primary market appears unable to check. 18
19) In the Kodak case,19 the Court held that an entity could have sufficient market power
in the secondary aftermarket to be liable under the antitrust laws for its exclusionary
conduct 20 in the aftermarket.
20) The next stage of determining abuse of dominance is whether the concerned
undertaking is in a dominant position 21or has a substantial degree of market power in
that relevant market.22
21) Dominance in the relevant market can be ascertained on the basis of the following
factors:
a. Market Share of the Enterprise

22) It is submitted that market shares provide a useful first indication 23 of the market
structure and of the relative importance of the various undertakings active in the
market.24

15
All India Online Vendors Association v. Flipkart India (P) Ltd., Case No. 20/2018 (CCI), 26.
16
Competition Act, §19(6).
17
Bijay Poddar v. Coal India Ltd, 291, Comp LR 208 (CCI).
18
SMS Sys. Maint. Servs. v. Digital Equip., 188 F.3d 11 (1st Cir. 1999); Parts & Elec. Motors, Inc. v. Sterling
Elec., Inc., 866 F.2d 228, 236 (7th Cir. 1988).
19
Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451.
20
National Society of Professional Engineers v. United States, 435 U.S. 679[1978].
21
Competition Act, §19(4).
22
Abir Roy & Jayant Kumar, Competition Law in India 159 (2nd ed. 2018).
23
Hilti v. Commission [1991] ECR II 1439.
24
France Telecom SA v. Commission, Case T-340/03, [2009] 4 CMLR 25, 81.
MEMORANDUM for INFORMANT [APPENDIX]

23) It is pertinent to note that Bravo is the oldest VR game store in the Market and also
possesses an exorbitant market share of 62% even in the primary market 25 which
further allows it to integrate more consumers in the relevant market and is useful first
indicator of the market structure and competitive importance of the undertaking in
question26.
24) Further, Bravo has inter alia refused to provide data portability in its platform and has
therefore locked in its customers27. Once a consumer purchases a game from Bravo,
he/she has to continuously pay the subscription fee for playing the game. If a
Consumer wants to change the streaming service from Bravo to some other
enterprise, he/she is compelled to lose the entire game progress. The exit cost of the
market substitutability it is equivalent to purchasing the entire game again, which is
extremely high for the consumers.
25) Since, the customers of Bravo are locked in the relevant market and cannot substitute
its services from other incompatible providers, therefore Bravo faces no constraints
from the other suppliers and can behave independently of other competitors and its
customers28. Therefore, it is submitted that Bravo enjoys market power over its
customers and competitors due to the lock-in effect 29 and its exorbitant market share
in the primary market.
b. Dependence of Consumers on the enterprise

26) It is submitted that the dependence of consumers on the operations of a dominant

enterprise due to the non-substitutability of an input is an important indicator for
attributing dominance.30
27) Keeping in view the aforesaid, it is submitted that the consumers are heavily
dependent on the services of Bravo 31despite it being expensive as the consumers are
left with no choice due to the non-availability of data portability across platforms and
fear of losing the progress that has been already been made in the VR- Games.32

25
DG Report
26
Hofmann-La Roche & Co. AG v. Commission of the European Communities, [1979] ECR 461.
27
Shamsher Kataria v. Honda Siel Cars India Ltd, 2014 Comp LR 1 (CCI).
28
William K. Kovacic, The Intellectual DNA of Modern U.S. Competition Law for Dominant Firm Conduct:
The Chicago/Harvard Double Helix, 2007 Columbus. L. REV. 1, 19-20
29
Brokerage Concepts v. United States Healthcare, 140 F.3d 494 (3d Cir. 1998).
30
Commercial Solvents v. Commission, [1974] ECR 223.
31
Shamsher Kataria v. Honda Siel
32
Shivam Enterprises v. Kiratpur Sahib Truck Operators Co-op Transport Society Ltd, [2015] Comp LR 232
(CCI).
MEMORANDUM for INFORMANT [APPENDIX]

28) Further, it is submitted that Bravo has also created barriers in the entry of its
competitors to the aftermarket of VR-Games Aftermarket. The competitors require
data portability across platforms in order to maximise customer satisfaction by
making sure that their game progress is not lost. However, this practice of Bravo
practically forecloses a potential market for them.
29) Therefore, there is a clear competitive advantage to Bravo in the aftermarket. 33 The
effect of not having data portability across the platforms, Bravo dissuades the
customers34 from availing the services of the competitors. It is reasonable to infer that
Bravo has a position of strength 35 which enables it to affect its competitors in the
after-market, i.e., Streaming/playing of VR games in its favour, 36 thereby limiting
consumer choice and forcing the consumers to react in a manner which is beneficial
to Bravo but detrimental to the interests of the consumers.

III. BRAVO HAS ABUSED ITS DOMINANT POSITION IN THE RELEVANT

MARKET

30) The third stage is the determination of whether the dominant enterprise abused its
dominance. 37It is submitted that there are two main issues that needs to be dealt by
the Commission which are:
a. Ability of the consumers to freely choose between an independent dealer and an
authorized dealer without being faced with any consequential disadvantage; and
b. Ability of independent dealers to access the aftermarket and competitively
provide services.
31) The abusive practices of Bravo within the parameters of §4(2) of the Act are:
A. Bravo has indulged in excessive pricing
32) It is submitted that imposition of unfair price is an abusive act under §4(2)(a)(ii) of
the Act38. Unfair pricing includes excessive pricing 39
and presently, Bravo is
indulging in excessive pricing.

33
United States v. Phila. Nat‟l. Bank, 374 U.S. 321 [1963].
34
Sachidanand Pandey v. State of WB, AIR 1987 SC 1109
35
HT Media Ltd v. Super Cassettes Industries Ltd, 2014 Comp LR 129 (CCI).
36
MCX Stock Exchange Ltd v. National Stock Exchange of India Ltd, 2011 Comp LR 129.
37
Abir Roy, Competition Law in India: A Practical Guide (2nd ed. 2016) 158.
.
38
Competition Act, §4(2)(a)(ii).
39
Scandlines Sverige AB v. Port of Helsingborg, COMP/A 36.568/D3.
MEMORANDUM for INFORMANT [APPENDIX]

33) It is trite law that excessive price means prices which have no reasonable relation
with the economic value of the goods or services supplied. 40 Moreover, excessive
prices may be considered as unfair if it is excessive in relation to the economic value
41
of the service provided and consequently cause an abuse of dominant position. 42
The law relating to abuse of dominance is concerned with the protection of
consumers from the unfairness which arises when a dominant undertaking is freed
from competitive shackles.43
34) In the landmark case of United Brands, 44 a two-fold test was developed in order to
determine excessive pricing.
 Firstly, the price-cost margin must be excessive; and
 Secondly, the price under consideration also must be unfair either in itself or
when compared to prices of competing products.
35) It is noteworthy that the Court has explicitly recognised that in case of excessive
pricing, there are other ways than price-cost comparison 45 and also that price cost
comparisons would be impossible given the nature of the product. 46 Therefore, it
would be an abuse of a dominant position to charge a price which was
disproportionate47 to the economic value of the product or service.48
36) Therefore, a yardstick competition approach needs to be adopted by drawing a
comparison between the price charged by Bravo and its competitors 49 in order to
determine abuse of dominance.50
37) It is contended that the increase of price by 10% per month for a period of 18 months
must be considered abusive51 and such excessive pricing amounting to INR 7200 per
year must be deemed excessive and warrants punishment. 52Moreover, the conduct of
Bravo has resulted mainly due to the inability of the consumers to switch to
competitors and is therefore abuse of its dominant position by Bravo.53
40
Judgment of 17 July 1997 in Case C-242/95 GT-Link [1997] ECR I-4449.
41
General Motors Continental NV v. Comm’n (1975)
42
Areeda, Kaplow, and Edlin, Antitrust Analysis, 396.
43
Phenytoin Case, [2022] EWCA Civ 1077.
44
United Brands v. Commission, [1978] ECR 207, 252.
45
Ibid at 47.
46
SACEM II and Bodson
47
General Motors v. Commission [1975] ECR 1367.
48
British Leyland v. Commission [1986] ECR 1347.
49
Corrine Bodson v Pompes Funebres,
50
(Wish; Bailey, 2015).
51
British Leyland
52
Pfizer and Flynn Pharma, 7 December 2016,
53
Press Release, Danish Competition and Consumer Authority (DCC), ‘CD Pharma has abused its dominant
position by increasing their price by 2,000 percent’ (31 January
MEMORANDUM for INFORMANT [APPENDIX]

38) Moreover, Bravo continuously increases its subscription fee at the rate of 10% per
month. It is submitted that such an increase of price amounts to excessive pricing and
is violative of S. 4(2)(a)(ii) of the Act. The Consumer has no choice but to pay the
excessive fees as he is locked in the market as the cost of leaving is as good as
purchasing the entire game and starting all over again.
B. Bravo has indulged in practice resulting in denial of market access
39) It is humbly submitted that Bravo has refused to provide for Data Portability, which
is being provided by both of its major competitors. Data Portability allows a user to
transfer its data to another streaming service, which he/she may want to opt for and is
a key factor for effective competition.54
40) The sale of games forms the primary market, and the provision of streaming services
forms the aftermarket, which is the relevant market in the present case.
41) By denying data portability, Bravo has locked in its consumers, as the cost of
switching to another streaming service means forfeiting the progress that has been
made in the game by the user. Thus, the user is locked in the after-market and has to
pay the arbitrary and excessive price which is continuously increased at the rate of
10% per month.
42) Therefore, by the aforementioned acts, Bravo has denied its competitors access to the
secondary after-market of streaming of VR games and has violated S. 4(2)(c ) of the
Act.
43) It is contended that the primary aim of Antitrust law is to “prevent business conduct
that artificially limits the natural range of choices in the market place. 55Moreover,
the challenge to data portability is inter alia regulated under the DMA 56, GDPR57 and
the refusal to supply doctrine as well as tying/bundling prevalent under Competition
Law all of which would apply to the present situation without prejudice to each
other.58

2018), www.en.kfst.dk/nyheder/kfst/english/decisions/2018-cd-pharma-has-abused-its-dominant-
position-by-increasing-their-price-by-2-000-percent/ (CD Pharma, press release).
54
Impact Assessment report, p. 28.
55
Robert H Lande, Consumer Choice as the Ultimate Goal of Antitrust, University of Pittsburgh Law Review,
Vol. 62, No. 3, pp. 503-525, Spring 2001.
56
Article 6(9) DMA.
57
Article 20 GDPR.
58
Opinion of Advocate General Rantos in C-252/21 - Meta Platforms and Others (Conditions générales
d’utilisation d’un réseau social), ECLI:EU:C:2022:704, Footnote 21.
MEMORANDUM for INFORMANT [APPENDIX]

44) It is submitted that parallel actions can be taken against and therefore the ne bis in
idem principle will not be applicable59. Further, in the Microsoft Case60, an order was
made to supply interoperability information by the Commission which was later
upheld by the General Court.61
45) In pursuance to the refusal to supply doctrine 62 which could constitute as abuse of
dominant position63 under Section 4 of the Act if the following conditions are
satisfied, namely; 1) the refused entity is indispensable to the activity and 2) the
refusal is liable or likely to exclude any effective competition. 64 And 3) the refusal
prevents the appearance of a new product for which there is a potential consumer
demand65 and; 4) the absence of objective justification66
46) Hence, it is contended that Bravo has no authority to bind the customers with them
after the sale of VR Games by intimidating the customers of deletion of their data if
they switch to any of the competitors. 67This means that the undertaking's decisions
are largely insensitive to the actions and reactions of competitors, customers and,
ultimately, consumers.68

59
Crémer, Dinielli, Heidhues et al (n. 156), p. 21.
60
T-201/04 - Microsoft v Commission, ECLI:EU:T:2007:289.
61
T-201/04 - Microsoft v Commission, ECLI:EU:T:2007:289, para. 648; Lynskey (n. 174), p. 502, Footnote
62
C-6/73 - Istituto Chemioterapico Italiano and Commercial Solvents v Commission, ECLI:EU:C:1974:18;
C-241/91 P - RTE and ITP v Commission, ECLI:EU:C:1995:98; C-7/97 - Bronner, ECLI:EU:C:1998:569; T-
504/93 - Tiercé Ladbroke v Commission, ECLI:EU:T:1997:84; C-418/01 - IMS Health, ECLI:EU:C:2004:257;
T-201/04 - Microsoft v Commission, ECLI:EU:T:2007:289; C-468/06 - Sot. Lélos kai Sia,
ECLI:EU:C:2008:504; T-301/04 - Clearstream v Commission, ECLI:EU:T:2009:317; Ezrachi (n. 121), p. 187.
63
Crémer, de Montjoye and Schweitzer (n. 23), p. 91.
64
C-241/91 P - RTE and ITP v Commission, ECLI:EU:C:1995:98, para. 56; C-7/97 - Bronner,
ECLI:EU:C:1998:569, para. 41; T-301/04 - Clearstream v Commission, ECLI:EU:T:2009:317, para. 147; T-
851/14 - Slovak Telekom v Commission, para. 115; Kellerbauer (n. 11), p. 1053.
65
See T-201/04 - Microsoft v Commission, ECLI:EU:T:2007:289, paras. 332, 643, 647-649, 656-658, 664 and
660-665 (emphasis added).
66
T-201/04 - Microsoft v Commission, ECLI:EU:T:2007:289, paras. 688-711; Ezrachi (n. 121), p. 264.
67
T-321/05 - AstraZeneca v Commission, ECLI:EU:T:2010:266, para. 679; T-814/17 - Lietuvos geležinkeliai
v Commission, ECLI:EU:T:2020:545, para. 87; T-612/17 - Google and Alphabet v Commission (Google
Shopping), ECLI:EU:T:2021:763, para. 215; Chirita (n. 23), p. 31.
68
E.U Guidance on the Commission‟s Enforcement Priorities in Applying Article 82 EC Treaty to Abusive
Exclusionary Conduct by Dominant Undertakings (the “Guidance”) [(2009/C 45/02)].
MEMORANDUM for INFORMANT [APPENDIX]