Bombay High Court Directs Competition Commission Of India Not To Take Coercive Action Against Disney, Star India And Asianet Star

The bench of Justice Gautam Patel and Madhav Jamdar said it was ordering no further action to maintain status quo until all the parties are heard fully before after the summer vacation.

The entertainment companies had approached the High Court against an February 28, 2022 order of the CCI that had ordered an investigation under Section 26(1) of the Competition Act 2002 by the Director General.

The CCI's order was based on a complaint by distributor Asianet Digital Network Pvt Ltd (ADNPL), that provides TV digital services in Kerela and Karnataka, Andhra Pradesh etc.

ADNPL that has had business relations with the three petitioner for the last two decades claimed that according to the regulations and the decisions of the Telecom Regulatory Authority of India ("TRAI") which governs the and the Telecom Disputes Settlement and Appellate Tribunal ("TDSAT"), broadcasters (such as the Petitioners) must not have discriminatory pricing in commercial contracts with multi service operators.

However, owning to the "discriminatory" practices of the broadcasters it has had to repeatedly take legal recourse. ADNPL said.

ADNPL before the CCI was that the Petitioners are all in 'positions of dominance'. They abused this position of dominance by providing to a direct competitor of ADNPL in Kerala, one Kerala Communicators Cables Limited ("KCCL") significant discounts though these were indirectly buried in the form of allied agreements that apparently offered a cashback system.

ADNPL claimed that the petitioners wanted to bypass TRAI/TDSAT set-caps or upper limits. CCI ordered the investigation by the DG within 60 days based on this. The petitioner broadcasters approached HC against the CCI's investigation order.

Petitioner's counsels argued for Star and said the order was bad in law. Senior Counsel Darius Khambata relied on the Supreme Court judgement in Competition Commission of India v Bharti Airtel Limited to submit that a complaint of the nature presented by the ADNPL must be first placed before the TDSAT and cannot be placed before the CCI directly.

While Advocate Somsekhar Sundaresan raised a preliminary issue on the jurisdiction, the court steered clear from making any observation and kept the contention open. Sundaresan submitted that the entire cause of action arose in Kerala.

Senior counsel Navroz Seervai for ADNPL opposed any relief to the broadcasters. Further, both Seervai and Sundaresan pointed out that at this stage CCI has not directed anything except information gathering or data-collection.

The court said it wanted to hear CCI and ADNPL, therefore it would hear the matter on June 8, to fix a date for final disposal. Affidavits in reply should be filed by May 7, and a rejoinder by June 3.

The court said that documents sought by the DG should be handed over to him in the meantime, but no order be passed or action be taken by the CCI.

"In the meantime, the Petitioners in all three cases will, on a without-prejudice and no-equities basis, furnish to the Director General such documentary material and information as he has called for or in response to his queries. The CCI is not to pass any further orders or to adjudicate further on the 2nd Respondent's complaint until further orders of the Court."

"The CCI is not to permit or direct any coercive actions against the Petitioners until the next date. This order will operate until 8th June 2022."

DJ Khambata, Senior Advocate, with Kunal Dwarkadas, Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur, Akshay Agarwal, i/b AZB Partners, for the Petitioner in WP/3860/2022.

Mr Musatafa Doctor, Senior Advocate, with Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur, Akshay Agarwal, i/b AAB Partners, for the Petitioner in

Mr Navroz Seervai, Senior Advocate, with Avinash Amaranath, Tarun Donadi, Nikhil Gupta & Priyanka Chaddha, i/b Wadia Ghyandy & Co, for Respondent No. 2, in WP/3860/2022.

Mr Somsekhar Sundaresan, with Abhishek Venkatraman, Viswajit Deb, Manu Chaturvedi, Malhar Desai Hafeez Patanwala, i/b Juris Corp, for Respondent No. 1, in all matters.

Dr Birendra Saraf, Senior Advocate, with Pradeep Bakhru, Avinash Amaranath, Tarun Donadi, Nikhil Gupta & Priyanka Chaddha, i/b Wadia Ghandy & Co, for Respondent No. 2 in WP/3755/22 & WP/3845/2022.

Mr Rajendra Barot, with Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair & Varun Thakur, i/b AZB Partners, for Respondents Nos. 3 & 4, in WP/3845/2022.

Mr. Vivek Menon - Counsel, Mr. Siddharth Chopra & Mr. Thomas George- Partner, Mr. Ranjeet Sidhu & Mr.Mudit Tayal - Senior Associate; Saikrishna & Associates

Case Title: Asianet Star Communications Private Limited Versus Competition Commissioner of India & Ors, with connected matters