Supreme Court Upholds CCI Order Dismissing Complaints Alleging Anti Competitive Practices By Uber, Ola

The Supreme Court has upheld the order of Competition Commission of India dismissing the complaints alleging cartelization and anti-competitive practices by cab aggregators Uber and Ola.

The bench comprising Justices RF Nariman, Krishna Murari and KM Joseph however set aside the NCLAT finding that Samir Agrawal, the informant in this case, had no locus standi to move the CCI in this regard. 

When the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act, the bench observed.

Samir Agrawal, a legal practitioner, had approached the CCI alleging that the the algorithmic pricing adopted by the aggregators takes away the liberty of individual drivers to compete with each other and thus amounts to price fixing by them in contravention of the provisions of Section 3 of the Act. CCI had held that prices were fixed by the algorithm on the basis of personalized information of riders along with other factors e.g. time of the day, traffic situation, special conditions/events, festival, weekday/weekend which all determine the demand-supply situation.  It was found that there was no agreement or meeting of minds between the drivers and aggregators, and also between drivers inter-se to fix price. The second allegation regarding minimum resale maintenance was rejected on the ground that there was no 'resale' in the context of app-based cab services. Read more here. NCLAT, the appellate authority, while dismissing the appeal, had also held that Samir Agrawal had no locus standi.

Agrawal, who appeared in person before the Apex Court, contended that  the amendments made in the sections sections 19 and 35 of the Competition Act would show that any person can be an informant who can approach the CCI, as one does not have to be a "consumer" or a "complainant", which was the position before the Competition (Amendment) Act, 2007.

Referring to the provisions of the Competition Act, the bench observed that the definition of 'person' is very wide and therefore, it is difficult to agree with the impugned judgment of the NCLAT in its narrow construction of section 19 of the Act. It said:

A reading of the provisions of the Act and the 2009 Regulations would show that "any person" may provide information to the CCI, which may then act upon it in accordance with the provisions of the Act. In this regard, the definition of "person" in section 2(l) of the Act, set out hereinabove, is an inclusive one and is extremely wide, including individuals of all kinds and every artificial juridical person. This may be contrasted with the definition of "consumer" in section 2(f) of the Act, which makes it clear that only persons who buy goods for consideration, or hire or avail of services for a consideration, are recognised as consumers.

A look at section 19(1) of the Act would show that the Act originally provided for the "receipt of a complaint" from any person, consumer or their association, or trade association. This expression was then substituted with the expression "receipt of any information in such manner and" by the 2007 Amendment. This substitution is not without significance. Whereas, a complaint could be filed only from a person who was aggrieved by a particular action, information may be received from any person, obviously whether such person is or is not personally affected. This is for the reason that the proceedings under the Act are proceedings in rem which affect the public interest. That the CCI may inquire into any alleged contravention of the provisions of the Act on its own motion, is also laid down in section 19(1) of the Act. Further, even while exercising suo motu powers, the CCI may receive information from any person and not merely from a person who is aggrieved by the conduct that is alleged to have occurred. This also follows from a reading of section 35 of the Act, in which the earlier expression "complainant or defendant" has been substituted by the expression, "person or an enterprise," setting out that the informant may appear either in person, or through one or more agents, before the CCI to present the information that he has gathered.

The court added that the Act vests powers in the CCI and enables it to act in rem, in public interest.  It said:

"Further, it is not without significance that the expressions used in sections 53B and 53T of the Act are "any person", thereby signifying that all persons who bring to the CCI information of practices that are contrary to the provisions of the Act, could be said to be aggrieved by an adverse order of the CCI in case it refuses to act upon the information supplied. By way of contrast, section 53N(3) speaks of making payment to an applicant as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions of Chapter II of the Act, having been committed by an enterprise. By this sub-section, clearly, therefore, "any person" who makes an application for compensation, under sub-section (1) of section 53N of the Act, would refer only to persons who have suffered loss or damage, thereby, qualifying the expression "any person" as being a person who has suffered loss or damage. Thus, the preliminary objections against the Informant/Appellant filing Information before the CCI and filing an appeal before the NCLAT are rejected."

Refusing to interfere with the order on merits, the bench disposed the appeal by observing thus:

Coming now to the merits, we have already set out the concurrent findings of fact of the CCI and the NCLAT, wherein it has been found that Ola and Uber do not facilitate cartelization or anti-competitive practices between drivers, who are independent individuals, who act independently of each other, so as to attract the application of section 3 of the Act, as has been held by both the CCI and the NCLAT.

CASE: SAMIR AGRAWAL  VS. COMPETITION COMMISSION OF INDIA [CIVIL APPEAL NO. 3100 OF 2020]

CORAM: Justices RF Nariman, Krishna Murari and KM Joseph

COUNSEL: Petitioner in Person, Samir Agrawal, Dr. Abhishek Manu Singhvi for Uber, Adv Rajshekhar Rao for Ola, ASG Balbir Singh for CCI

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