NLU Antitrust Law Moot Court Competition, 2016: Semifinalists - Respondents
NLU Antitrust Law Moot Court Competition, 2016: Semifinalists - Respondents
NLU Antitrust Law Moot Court Competition, 2016: Semifinalists - Respondents
...Appellant No. 1
...Appellant No. 2
v.
Luminous Sports
...Respondent No. 1
X Sports
...Respondent No. 2
___________________________________________________________________________
Clubbed With
Appeal No.______/2016
(Under 53T of the Competition Act, 2002)
___________________________________________________________________________
BooTube
...Appellant
v.
Luminous Sports
...Respondent No. 1
___________________________________________________________________________
Clubbed With
Appeal No._____/2016
...Appellant
v.
Bohemian Kabaddi League
...Respondent No. 1
Cougar
...Respondent No. 2
___________________________________________________________________________
Clubbed With
Appeal No._______/2016
(Under 53T of the Competition Act, 2002)
___________________________________________________________________________
X Sports
...Appellant
v.
...Respondent No. 1
...Respondent No. 2
___________________________________________________________________________
TABLE OF CONTENTS
INDEX OF AUTHORITIES............................................................................................................vii
LIST OF ABBREVIATIONS............................................................................................................xi
STATEMENT OF JURISDICTION.................................................................................................xiv
STATEMENT OF FACTS..............................................................................................................xv
ISSUES FOR CONSIDERATION.................................................................................................xviii
SUMMARY OF ARGUMENTS.....................................................................................................xix
WRITTEN SUBMISSIONS..............................................................................................................1
I.
BKL HAS VIOLATED 4 OF THE COMPETITION ACT WITH RESPECT TO THE EXCLUSIVE
BROADCASTING AGREEMENT.....................................................................................................1
A. BKL IS AN ENTERPRISE UNDER 2(H) OF THE ACT.......................................................1
B. BKL IS IN A POSITION OF DOMINANCE IN THE RELEVANT MARKET............................1
I.
LEAGUES IN
II.
TO LUMINOUS SPORTS........................................................................................................7
II.
II.
LUMINOUS SPORTS HAS NOT VIOLATED 4 OF THE COMPETITION ACT WITH RESPECT
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II.
THE AMELIORATING EFFECTS ARE NOT ENOUGH TO COUNTER THE EFFECT CAUSED
KFB AND BKL HAVE VIOLATED 4 OF THE COMPETITION ACT WITH RESPECT TO
PLAYER CONTRACTS.................................................................................................................27
A. KFB AND BKL FALL UNDER THE AMBIT OF THE ACT...............................................27
I.
II.
OF THE ACT......................................................................................................................33
II.
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II.
THE CLAIM HAS ARISEN OUT OF THE ORDER OF COMPAT IN AN APPEAL AGAINST
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INDEX OF AUTHORITIES
A. STATUTES
B. TREATISES
1. Treaty on the Functioning of the European Union.............................................................. 8
C. REGULATIONS
D. INDIAN CASES
1. Arshiya Rail Infrastructure Limited v. Ministry of Railways (MoR), Case no. 12/2011
(CCI)..................................................................................................................................18
2. Automobiles Dealers Association, Hathras v. Global Automobiles Ltd, Case no. 33/2011
(CCI)............................................................................................................................21, 22
3. Belaire Owners Association v. DLF Ltd., Case no. 19/2010 (CCI)...............................8, 14
4. Bijay Poddar v. Coal India Ltd. Case no. 59/2013 (CCI)....................................................8
5. Consumer Online Foundation v. Tata Sky, Case no. 02/2009 (CCI)..................................23
6. Dhanraj Pillay v. Hockey India, Case no. 73/2011 (CCI)..................2, 9, 28, 29, 30, 31, 34
7. Fast Way Transmission Pvt. Ltd. v. Kansan News Pvt. Ltd, Appeal no. 16/2012
(COMPAT).............................................................................................................14, 18, 20
8. GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Case no. 01/2010
(CCI)............................................................................................................................17, 23
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9. Hemant Sharma v. Union of India, WP(C) no. 5770/2011 (Delhi High Court)................28
10. HT Media Limited v. Super Cassettes Industries Limited, Case no. 40/2011 (CCI).........18
11. Jak Communications Pvt. Ltd. v. Sun Direct TV Pvt. Ltd., Case no. 8/2009 (CCI)..........13
12. Kapoor Glass Pvt. Ltd. v. Schott Glass India Pvt. Ltd., Appeal no. 45/2012 (COMPAT).
6, 8, 18, 23, 25
13. Maharashtra State Power Generation Company Ltd. v. Mahanadi Coalfields Ltd., Case
no. 3/2012 (CCI)................................................................................................................11
14. MCX Stock Exchange Ltd. v. NSE India Ltd, Case no. 13/2009 (CCI)..............................7
15. Mohammad Ali Khan v. Commission Of Wealth Tax, AIR 1997 SC 1765 (SC)...............37
16. National Insurance Co. Ltd. vs. Laxmi Narain Dhut, 2007 (4) SCALE 36 (SC);.............37
17. Peeveear Medical Agencies v. All India Organization of Chemists and Druggists, Case no.
30/2011 (CCI)..............................................................................................................18, 26
18. Prints India v. Springer India Pvt. Ltd., Case no. 16/2010 (CCI)........................................2
19. Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case no. 63/2014 (CCI).....17
20. Shamsher Kataria v. Honda Seil Cars India Ltd. And Ors., Case no. 3/2011 (CCI)....6, 18,
20, 21, 32
21. Sonam Sharma v. Apple Inc., Case no. 24/2011 (CCI)......................................................22
22. Suganthi Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420 (SC).......................................37
23. Sunshine Pictures v. Eros International Media, Case no. 52/2010 (CCI)..........................21
24. Surender Singh Barmi v. BCCI, Case no. 61/2010 (CCI)......3, 4, 11, 24, 25, 28, 29, 30, 31
25. Tata Engineering and Locomotive Co Ltd (Telco) v. The Registrar of Restrictive Trade
Agreement, 1977 AIR 973 (SC).........................................................................................21
E. EUROPEAN CASES
1. AKZO Chemie BV v. Commission, 1991 ECR I-3359 (ECJ)...........................................16
2. Atlantic Container Line AB v. Commission, 2003 ECR II-3275 (General Court)............16
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25. Societe Technique Miniere v. Maschinendau Ulm, 1966 ECR 337 (ECJ).........................25
26. United Brands Co. v. Commission, 1978 ECR 207 (ECJ).............................................5, 11
27. Volk v. Vervaecke, [1969] ECR 295 (ECJ)........................................................................22
28. Walrave and Koch v. Union Cycliste Internationale, [1974] ECR 1405 (ECJ).................27
29. Wouters v. Algemene Raad van de Nederlandse Orde van Advocaten, Case C-3 09/99
(ECJ)..................................................................................................................................33
F. U.S. CASES
1. Board of Trade of the City of Chicago v. US, 246 US 231 (USSC)..................................25
2. Continental T.V. v. GTE Sylvania, 433 U.S. 36 (1977) (USSC)........................................21
3. Ford Motors v. US 335 U.S. 303 (1948) (USSC)..............................................................25
4. Standard Oil Co. of New Jersey v. US 221 U.S. 1 (1911) (USSC)....................................25
5. U.S. Healthcare v. Health Source, 61 USLW 2595 (Court of Appeals).............................24
6. U.S. v. Microsoft, 253 F.3d 34 (Court of Appeals)............................................................23
G. OTHER CASES
1. News Ltd. v. Australian Rugby Football League Ltd., (1996) 64 FCR 447 (Federal Court
of Australia)....................................................................................................................3, 14
H. BOOKS
1. A. Roy, COMPETITION LAW IN INDIA (2nd edn., 2014).......................................................24
2. C. Jones, PRIVATE ENFORCEMENT OF ANTITRUST LAW IN EU, UK AND USA (1999)......38
3. F. Wijckmans, and F. Tuytschaever, VERTICAL AGREEMENTS IN EU COMPETITION LAW
(2nd edn., 2011)...............................................................................................................2, 14
4. R. Whish and D. Bailey, COMPETITION LAW (8th edn., 2015)......................................37, 38
5. S. Dugar, GUIDE TO COMPETITION LAW, Vol. 1 (5th edn., 2010).......................................37
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I. OTHER AUTHORITIES
1. Commission Notice on agreements of minor importance (De Minimis), OJ C 368/07
......................................................................................................................13, 14, 22, 35
2. Commission Notice on the Definition of Relevant Market, OJ 1997 (C 372)..............13, 14
3. Commission Notice Published Pursuant to Article 19(3) of Council Regulation No. 17, OJ
2001/C 169/03....................................................................................................................35
4. European Commission Guidelines on Vertical Restraints, O.J. 2010 (C 130) 1..23, 24, 25,
26
5. Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to
Abusive Exclusionary Conduct by Dominant Undertakings, OJ 2009 (C 45)7 5, 11, 16, 17,
18, 23, 25
6. Report by the EC Commission in OECD, The Essential Facilities Concept, 97 (1996)....19
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LIST OF ABBREVIATIONS
S R.
Abbreviations
EXPANSION
NO.
1.
AAEC
2.
Art.
Article
3.
BOA
4.
BKL
5.
CCB
6.
CCI
7.
Co.
Company
8.
COMPAT
9.
DG
Director General
10.
EC
European Commission
11.
ECJ
12.
EU
European Union
13.
KFB
14.
KSL
15.
Ltd.
Limited
16.
Luminous
Luminous Sports
17.
OECD
18.
Pvt.
Development
Private
19.
r/w
read with
20.
SAKF
21.
SC
Page | 12
22.
SSNIP
23.
TFEU
Price
Treaty on the Functioning of the European Union
24.
The Act
25.
U.S.
United States
26.
USSC
27.
&
And
28.
Paragraph
29.
Section
Page | 13
STATEMENT OF JURISDICTION
The Appellants have approached this Honourable Court under 53T of the Competition Act,
2002. The Respondents, Luminous Sports and X Sports humbly submit to the jurisdiction of
this Honourable Court.
II
The Appellant has approached this Honourable Court under 53T of the Competition Act,
2002. The Respondent, Luminous Sports, humbly submits to the jurisdiction of this
Honourable Court.
III
The Appellant, Rodidas has approached this Honourable Court under 53T of the
Competition Act, 2002.
IV
The Appellant, X Sports has approached this Honourable Court under 53T of the
Competition Act, 2002
Page | 14
STATEMENT OF FACTS
THE PLAYER CONTRACTS
KFB is a registered society and the National Federation for Kabaddi in Bohemia, affiliated to
SAKF. It is the apex body of state associations that all kabaddi players are affiliated to, and
selects players for the national team. KFB and SAKF announced the launch of BKL, a
professional kabaddi league in August 2015.
X Sports is a sports channel and promoter for KSL, a private professional kabaddi league.
KSLs first season was a considerable success. Its second season was held in November 2015
and was not a big success.
In September 2015, KFB published a list of sanctioned and unsanctioned events, KSL being
an unsanctioned event. Under new agreements signed between KFBs member associations
and the players, disciplinary action would be taken against players for participating in
unsanctioned events and failing to attend compulsory national camps. A compulsory national
camp for selection to a championship was to be held on the same dates as the second season
of KSL. Despite representations, the dates were not changed.
Some national players and junior players terminated their contract with KSL after the
announcement of the regulations. X Sports filed an information alleging abuse of dominance
resulting in denial of market access. The DGs report recorded KFB as dominant in the
market for conducting and governing national and international kabaddi in Bohemia, and that
BKL had abused its dominant position.
CCB directed KFB and BKL to cease and desist from continuing with restrictive clauses and
ordered the disintegration of KFB and BKL to avoid conflict of interest. COMPAT ruled that
the latter order was excessive and set it aside.
Page | 15
findings in the matter. COMPAT dismissed BooTubes appeal on the grounds of Luminous
not being dominant in the market for broadcasting sports.
THE MERCHANDISING AGREEMENT
Cougar, an international manufacturer of T-shirts and caps, and the international sponsor of
SAKF, was awarded the exclusive merchandising rights for all franchisees for the opening
season of BKL. The merchandising agreement contained an automatic renewal clause for one
year at a premium payment of 20% over the current price.
One of the franchisees had protested in vain against BKLs right to award merchandising
rights and the auto-renewal clause. Further, the Franchisee Agreement was found to have a
clentitled BKL to expel any franchisee on grounds of misconduct.
Rodidas, a Bohemian manufacturer of T-shirts and caps, filed an information alleging that the
exclusive supply agreement between BKL and Cougar is anti-competitive.
The CCB directed BKL to eliminate the auto-renewal clause and held the existing contract to
be in violation of 3 and 4 of the Act. The COMPAT ruled that the pro-competitive effects of
the exclusive merchandising contract outweighed the anti-competitive effects.
THE COMPENSATION CLAIM
On behalf of KSL, X Sports filed an application under 53N of the Act claiming
compensation. The COMPAT put the application under abeyance till the aforementioned
appeals are decided. X Sports contended that the conditions under the section were met and
appealed against the COMPATs decision.
All the above appeals are now before the Supreme Court of Bohemia.
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APPEAL 1
1
Whether BKL has violated 4 of the Act with respect to the Exclusive Broadcasting
Whether Luminous has violated 4 of the Act with respect to the Internet
Broadcasting Rights
APPEAL III
Whether BKL has violated 4 of the Act with respect to the Merchandising
APPEAL IV
1. Whether the COMPATs decision to put the compensation claims under abeyance is
valid.
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SUMMARY OF ARGUMENTS
I.
4 of the Act prohibit an enterprise from abusing its dominant position in the relevant market.
The market for internet broadcasting and television broadcasting cannot be identified as
distinct relevant markets. They form part of the same market. This is because these two
products are substitutable as there is no significant switching cost. Thus, Luminous couldnt
have violated 4(2)(e) of the Act as there is a preliminary requirement two distinct markets.
In any event, even if it is assumed that the market for the internet broadcasting and television
broadcasting of kabaddi matches are distinct market, luminous has still not violated 4(2)(e)
of the Act. This is because Luminous is not dominant in the market for the television
Page | 19
4(1) of the Act states that no enterprise or group shall abuse its dominant position. BKL is
an enterprise under the Act. All products that are substitutable from a consumers (end user)
point of view are part of the same market. The end users in this case are the viewers of BKL
who buy the merchandise. Applying the SSNIP Test, it is found that for the core fans, BKL is
not substitutable with other kabaddi leagues or other sports. Therefore the relevant market is
the market for the merchandising rights of BKL matches. BKL is dominant in this market
because it is the only one who has the power to give away these rights, therefore has a
monopoly in the market. It operated independently of competitive forces by giving away the
rights without a tender. BKL could also affect the market and competitors in its favour. BKL
abused this dominant position by denying market access to competitors and consumers. It
denied competitors the essential facility and caused foreclosure in the downstream market.
There is also loss in consumer welfare. Therefore it is submitted that BKL violated 4 of the
Act.
IV.
Agreements within the purview of 3(4) of the Act would be in contravention of 3(1) only if
they are likely to cause AAEC. The agreement between BKL and Cougar falls within the
purview of the Act because they are both enterprises operating in different markets and the
agreement is a vertical restraint. The agreement causes AAEC because BKL has a majority
share in the relevant market. Additionally the exclusive supply agreement with the autoPage | 20
renewal clause causes AAEC because it causes market foreclosure and entry barriers for new
entrants. It also drives existing competition out of the market. On the other hand, the
agreement does not cause any positive effects because, it reduces countervailing buying
power of consumers in the downstream market, causing loss in consumer welfare. Denial of
essential facility hampers production and distribution of competitors, and does not help in
development of the market. Overall, the agreement causes AAEC in the market. Therefore it
is submitted that, the agreement is void under 3 of the Act.
V.
RESPECT TO
PLAYER CONTRACTS
4(1) of the Act states that no enterprise or group shall abuse its dominant position. Since
KFB is engaged in activities relating to the provision of services of entertainment, it is an
enterprise under the Act. BKL is also an enterprise. KFB and BKL are a group since KFB is
in a position to control the management of BKL. KFB and BKL fall under the ambit of the
Act. The relevant market is the market for organizing private professional kabaddi leagues in
Bohemia, since national and international kabaddi matches, and private professional kabaddi
leagues are not substitutable. The geographic market is national in scope. KFBs regulatory
monopoly allows it to operate independently of competitive forces in the market. BKL and
KFB can affect competitors and consumers in the market, therefore they hold a dominant
position. KFBs regulations resulted in a denial of market access under 4(2)(c). Further, the
regulations are disproportionate to the intended objective and were applied
disproportionately. Thus KFB and BKL abused their dominance. The order of CCB should be
upheld to avoid conflict of interest between KFBs commercial and regulatory roles.
Page | 21
VI.
53N(1) provides the conditions under which an application to the COMPAT to adjudicate a
claim for compensation can be filed by a person or enterprise, from the findings of the
commission or the orders of COMPAT in an appeal against any finding of Commission.
Additionally, the enterprise should have suffered some loss or damage as a result of any
contraventions of the provisions of Chapter II of the Act by the abusive enterprise. It is
submitted that all these conditions are met because X Sports is an enterprise, the appeal arises
out of an order of the COMPAT and X Sports has suffered loss due to the conduct of BKL
and KFB. Further, looking at the legislative intent of the provision and comparing it to UK
law, there is no intended restriction on filing a claim for compensation during the pendency of
the appeal of the infringement decision. Lastly, a stay order could cause hardship on the
parties because of the uncertainty about the length of the appeal proceedings. Therefore it is
submitted that, COMPATs decision is not valid.
Page | 22
WRITTEN SUBMISSIONS
I.
1. The 4(1) of the Act states that no enterprise or group shall abuse its dominant position.1 The
COMPATs decision that BKL has violated 4 of the Act should be upheld because first, BKL
is an enterprise under 2(h) of the Act. [A]. Secondly, BKL is in a position of dominance in
the relevant market [B]. Lastly, the actions of BKL amount to abuse under 4(2)(a) of the Act
[C].
A BKL IS AN ENTERPRISE UNDER 2(H) OF THE ACT
2. Provisions of 4 of the Act are only applicable to an enterprise or a group.2 An enterprise
means a person who engages in an economic activity, where activity includes profession or
occupation.3 BKL is a professional kabaddi league announced by KFB in association with
SAKF.4 It provides services relating to entertainment, and its activities include revenue
generating activities such as auction of franchises, merchandise and tickets sales.5 Therefore,
it is submitted that BKL qualifies as an enterprise under the Act.
J. BKL IS IN A POSITION OF DOMINANCE IN THE RELEVANT MARKET
i.
3. The ascertainment of the relevant market is essential for analysing a case of abuse of
dominance.6 The dominant position of an enterprise or a group has to be established within
the identified relevant market.7 When determining what constitutes the relevant market, due
regard must be given to both the relevant product as well as geographic market.8
4. All those products or services which are regarded as interchangeable or substitutable by the
consumer form part of the same relevant product market.9 Relevant product market is
primarily determined by gauging product substitutability from a consumers perspective.10
The Commission has to take consumer preferences into consideration for the determination of
the relevant product market.11 It is submitted that the ultimate viewers of a sporting event are
the consumers of the end product, which in this case is the sporting event.12 Thus, in the
instant case, the viewers of the BKL should be considered as the consumers.
5. Sports broadcasting rights constitute a distinct field from the broadcasting right of other
television programmes.13 It is also established that the market for sport broadcasting rights
ought to be subdivided into separate product markets.14 Globally, competition authorities have
identified separate markets for the broadcasting rights of different sports such as cricket,15
football,16 etc. The core crowd or fans of a particular sport i.e. consumers, would never find
another sport substitutable for that sport.17 Thus, the broadcasting rights of one sport are not a
substitute for the broadcasting rights of other sports. The competition authorities further
divided the market for the broadcasting of a particular sport into two different markets.18 In
BCCI19, CCI stated that there are inherent differences between international/first class
cricketing events and private professional cricket leagues, such as the nationality of the
players, objectives of the event etc. Therefore, it identified a separate market for the
organisation of private professional cricket leagues in India.20 Similarly, in Newscorp 21, the
ECC identified the relevant market as the market for broadcasting rights of football events
13 Group Canal+/RTL/GICD/JV, Case COMP/M.2483, 12 (EC) [hereinafter, Canal].
14 Canal, supra note 13, 12; Joint Selling of Media Rights to the FA Premier League, Case
COMP/C-2/38.173, 22 (EC) [hereinafter FAPL]; Joint Selling of Commercial Rights of
UEFA Champions League, Case COMP C.2- 37.398, 57 (EC) [hereinafter, UEFA].
15 Surender Singh Barmi v. BCCI, Case No. 61/2010, 8.38 (CCI) [hereinafter, BCCI].
16 Canal, supra note 13, 21; FAPL, supra note 14, 22; UEFA, supra note 14, 63; Joint
Selling of Media Rights of the German Bundesliga, Case COMP/C.2/37.214, 41 (EC).
17 News Ltd. v. Australian Rugby Football League Ltd., (1996) 64 FCR 447, 152 (Federal
Court of Australia) [hereinafter, News Ltd.].
18 UEFA, supra note 14, 56.
19 BCCI, supra note 15, 8.38.
Page | 3
that take place every year, where national teams participate. In UEFA22, the EC held that
there was a separate market for the acquisition and resale of football broadcasting rights of
events that are played regularly throughout every year.
6. Similarly, the viewers of the kabaddi will not substitute it with any other sporting event.
Further, the international kabaddi matches cannot be substituted for private professional
kabaddi leagues. Hence, it is submitted that market for the broadcasting of the private
professional kabaddi leagues should be identified as the relevant product market.
7. The relevant geographic market23 should also be taken into consideration to identify the
relevant market.24 The CCB should pay due regard to the factors such as language,25
consumer preference,26 etc., while identifying the relevant geographic market. The geographic
market for the acquisition of media rights is usually defined on the basis of national or
linguistic criteria, and is therefore national in scope.27 This is primarily due to the differences
in the regulatory regimes, language barriers and other conditions of competition prevailing in
the different nations.28 Further, different tenders have been called for the national broadcast
and the rest of the world broadcast of BKL matches.29 Therefore, it is submitted that
Bohemia should be identified as the relevant geographic market.
8. In conclusion, it is submitted that the market for broadcasting rights of private professional
kabaddi leagues in Bohemia is the relevant market.
ii.
9. As argued above, the relevant market in the instant case is the market for broadcasting
rights of private professional kabaddi leagues in Bohemia. It is submitted that BKL has
acquired a dominant position in the relevant market, as per the second explanation to 4 of
the Act, read with 19(4)30.
10. Dominant position is defined as a position of strength enjoyed by an enterprise that enables it
to operate independently of competitive forces in the relevant market.31 According to the test
laid down in United Brands32 and Hoffman33, a firm would be able to behave independently of
because there are only two private professional kabaddi leagues in Bohemia i.e. KSL and
BKL. KSL has lost its popularity because of the introduction of BKL, missing players, and
other factors.37 BKL is the only kabaddi league in Bohemia which is included in the list of
sanctioned events by KFB.38 This increased the participation of national and international players
in BKL, making it more popular than KSL.
12. An enterprise is dominant if it is able to control prices or restrict the entry of new competitors
into the relevant market.39 While determining whether an enterprise has a dominant position,
creation of entry barriers in the relevant market has to be taken into consideration.40
Advantages peculiar to the dominant company constitute barriers to entry.41
13. In the instant case, BKL is organised by KFB in association with the SAKF.42 KFB has the
sole right to approve/sanction kabaddi events in Bohemia.43 This right to approve leagues has
significant impact on any private professional league which might be proposed to be organized.
The approval of KFB is essential for access to the vital inputs (stadium, list players) required to
ensure the successful organization of a league. This peculiar advantage to BKL acts as an entry
barrier in the relevant market and is an important source of dominance for BKL.
14. Thus, it is submitted that, owing to KFBs market power, control over infrastructure,
regulatory role, control over players, and ability to restrict entry of other leagues, BKL is in a
dominant position in the identified relevant market.
K. THE ACTIONS OF BKL CONSTITUTE AN ABUSE OF DOMINANT POSITION
15. It is submitted that BKL has abused its dominant position according to 4(2) of the Act
because first, BKL has imposed unfair conditions on the sale of broadcasting rights to
Luminous Sports [i], and secondly, BKL has granted preferential treatment to Media
Bohemia [ii].
i
16. 4(2)(a) of the Act provides that the indirect or direct imposition of unfair or discriminatory
conditions in the purchase or sale of goods of service constitutes abuse of dominant
position.44 The term unfair has not been defined anywhere in the Act.45 It has to be examined
either in the context of unfairness in relation to customers, or in relation to a competitor.46
17. In the absence of proper safeguards, modification of existing clauses and inclusion of new
clauses in terms and conditions of the scheme, without the buyers approval, is considered
one sided.47 Further, clauses which let the seller create third party rights detrimental to the
buyer, without the buyers consent, are unfair and lop sided.48
18. In the instant case, clause 87.II.A of the exclusive broadcasting agreement between Luminous
and BKL gives BKL the right to unilaterally modify any terms and conditions of the
agreement without the consent of Luminous.49 BKL used this clause to alter the most
fundamental condition of the agreement i.e. exclusivity in broadcasting, by giving the
broadcasting rights to Media Bohemia.50 This was detrimental to the economic interests of
Luminous. The subscribers to Luminous would decrease, as the same services were being
offered by Media Bohemia, free of cost.51 Further, this would negatively affect the
advertisement revenue of Luminous. Therefore, it is submitted that BKL has abused its
dominant position by imposing unfair conditions on Luminous and unilaterally modifying the
agreement to the detriment of Luminous.
iii.
19. It is an established position of law that, if a dominant firm applies dissimilar conditions to
equivalent transactions with other trading parties, thereby placing them at competitive
disadvantage, it is considered an abuse of dominant position.52 In the instant case, BKL sold
the broadcasting rights of BKL matches in Bohemia to Media Bohemia, at one-third of the
price at which Luminous has purchased them.53 Further, these rights were awarded without
any tendering process.54 This shows that BKL granted preferential treatment to Media
Bohemia in granting broadcasting rights.
20. In conclusion, it is submitted that the actions of BKL, imposing unfair conditions on
Luminous and granting preferential treatment to Media Bohemia, constitute abuse of
dominant position under 4(2) of the Act.
II.
21. It is submitted that Luminous Sports has not violated 4 of the Act because first, the market
for internet broadcasting and television broadcasting form part of the same relevant market.
[A], Secondly, Luminous has not violated 4(2)(e) of the Act [B]. Alternatively, even if it is
assumed that the market for Television and Internet broadcasting are two different relevant
markets, the actions of Luminous do not amount to abuse as per 4(2)(e) of the Act [C].
A THE MARKET FOR INTERNET BROADCASTING AND TELEVISION BROADCASTING FORM
PART OF THE SAME RELEVANT MARKET.
22. All those products or services which are regarded as interchangeable or substitutable by the
consumer form part of the same relevant product market.55 The ultimate viewers of the
broadcast are the consumers.56 In the instant case, it is submitted that internet broadcasting
and television broadcasting are substitutable with each other. To access the internet broadcast
of programmes there are no specific requirements other than a computer and an internet
connection which is a necessity in the current times. The consumers will find these two
services substitutable because there is no substantial switching cost involved. Further, the
internet broadcast of the BKL matches is being made available free of cost. This gives more
incentive to the consumers to substitute these services. Therefore, it submitted that the
internet and television broadcasting form part of the same relevant market of broadcasting.
L. LUMINOUS HAS NOT VIOLATED 4(2)(E) OF THE ACT.
23. 4(2)(e) of the act prohibits a dominant enterprise from leveraging its dominant position in
one relevant market to enter into, or protect another relevant market.57 There is a preliminary
requirement of two different relevant markets, to make an enterprise liable under 4(2)(e) of
55 2(t), Competition Act, 2002.
56 Hockey India, supra note 12, 10.9.7.
57 4(2)(e), Competition Act, 2002.
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the Act. However, as argued above in the memorandum, the market for internet broadcasting
and television broadcasting form part of the same relevant market. Therefore, it is submitted
that Luminous could not have violated the provisions of 4(2)(e) of the Act.
M.EVEN IF IT IS ASSUMED THAT THE MARKETS FOR TELEVISION AND INTERNET
BROADCASTING OF KABADDI MATCHES ARE DIFFERENT RELEVANT MARKETS, THE
ACTIONS OF LUMINOUS DOESNT AMOUNT TO ABUSE AS PER 4(2)(E) OF THE ACT
24. Assuming but not conceding, that the market for internet broadcasting of kabaddi matches and
the market for Television broadcasting of kabaddi matches are two different relevant markets,
Luminous has still not violated 4(2)(e) of the Act because Luminous is not dominant in the
market for the Television broadcasting of kabaddi matches.
i
25. Dominant position of an enterprise has to be decided by using the guidelines given under
Explanation 2 of 4(2) of the Act.58 Assessment of dominance of an enterprise has to be done
on a case-to-case basis, depending on the relevant market.59 It is submitted that first,
Luminous does not operate independently of the competitive forces prevailing in the relevant
market [a], and secondly, Luminous cannot affect competitors, consumers or the relevant
market in its favour [b].
a. Luminous does not operate independently of the competitive forces prevailing in
the relevant market.
26. In the instant case, the relevant market, as contended by the appellant, is the market for the
TV broadcast of kabaddi matches. It is an established principle that a firm would be able to
behave independently of competitive forces, if it has acquired a position of economic
strength.60 This position of economic strength can be understood to be one of substantial
market power.61
27. It is submitted that Luminous does not have substantial market power in the relevant market.
Luminous only has the rights to broadcast BKL matches in Bohemia.62 BKL is a small part of
the market because market includes other leagues and kabaddi matches where national teams
participate. 63 Media Bohemia also has the rights for TV broadcasting of BKL matches.64
28. The size and importance of the competitors should also be considered for determining
dominance of an enterprise.65 In the instant case, the competitors of Luminous Sports are
Media Bohemia and X Sports.66 Media Bohemia is the national broadcaster in Bohemia and
had the widest reach and maximum viewership across Bohemia.67 X Sports is owned by X
60 Hoffmann, supra note 33, 4; United Brands, supra note 32, 65.
61 Enforcement Guidance, supra note 35, 10.
62 Proposition, 14, Line 1-2.
63 Proposition, 6, Line 1-2.
64 Proposition, 15, Line 1-2.
65 19(4)(c), Competition Act, 2002.
66 Clarifications, Q48.
67 Proposition, 14, Line 4-6.
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Television Network, which is a leading media house in Bohemia.68 This shows that the
competitors of Luminous hold an important position in the market.
29. Therefore, it is submitted that Luminous cannot operate independently of the competitive
forces prevalent in the relevant market.
b. Luminous cannot affect competitors, consumers or the relevant market in its
favour
30. An enterprise which has the ability to engage in conduct that excludes competition or
prevents the entry of newcomers into the relevant market, can influence the relevant market
in its favour.69 As argued above70, Luminous hold a very small share of the market. Therefore,
anomalous behavior of Luminous would not have any substantial effect on the market or
competitors.
31. In conclusion, Luminous does not hold a dominant position in the relevant market. Abuse
under 4(2)(e) of the Act requires the enterprise to have a dominant position in one of the two
relevant markets.71 Therefore, it is submitted that Luminous could not have leveraged its
position to violate 4(2)(e) of the Act.
71 Jak Communications Pvt. Ltd. v. Sun Direct TV Pvt. Ltd., Case No. 8/2009, 4.4 (CCI).
Page | 13
III.
32. 4(1) of the Act states that no enterprise or group shall abuse its dominant position.72 As
argued above in the memorandum, BKL is an enterprise.73 BKL has violated the provisions of
the Act because first, it is in a dominant position in the relevant market [A], and secondly, its
actions constitute an abuse of the dominant position under 4(2) of the Act. [B]
A BKL IS IN A DOMINANT POSITION IN THE RELEVANT MARKET
i
The Relevant Market in this Case is the Market for Merchandising Rights for
BKL Matches Only.
34. The Small but Significant Increase in Price Test (SSNIP/Monopolist Test) has been employed
to determine substitutability.77 In the instant case, the assumed market for merchandising
rights for BKL is the smallest market. BKL entered into an agreement with the franchises to
award a single exclusive merchandising contract on behalf of all the teams.78 A small increase
in the price of the product will not result in the consumers (end-users) moving away, because
the core crowd or fans of a particular league i.e. consumers, would never find another sports
league substitutable for that league.79 This fulfils the SSNIP Test, and verifies that the
merchandising rights for BKL matches are not substitutable with the merchandising rights of
any other sporting league. Therefore, it is submitted that the relevant product market is the
market for merchandising rights of BKL matches.
35. The relevant geographic market in this case should be restricted to territory of Bohemia. This
is primarily due to the differences in the regulatory regimes and other conditions of
competition prevailing in different nations.80
36. In conclusion, it is submitted that the market for merchandising rights of BKL matches in
Bohemia is the relevant market.
iv.
37. It is submitted that BKL is in a dominant position in the relevant market because first, BKL
operates independently of the competitive forces prevailing in the relevant market [a], and
secondly, BKL affects competitors, consumers and the relevant market in its favour [b].
a
38. Market share is one of the relevant factors to be taken into consideration when inquiring into
whether an enterprise enjoys a dominant position.81 The ECJ has stated that very large shares
are in themselves sufficient evidence for a finding of dominance.82
39. In the instant case, BKL is a monopolist in the relevant market, because it signed an
agreement with the franchises to give out a single joint contract for the merchandise for BKL
matches.83 It owns the complete market share in the market for merchandising rights of BKL
matches. Therefore, there is a presumption that BKL is in a dominant position.84
40. Further, while awarding this merchandising contract, BKL followed no tendering process,
and gave Cougar the contract based on non-competitive considerations.85 The contract also
had an auto-renewal clause for one year.86 This proves that BKL operated independently of
the competitive forces prevailing in the relevant market.
c. BKL Affects Competitors, Consumers and the Relevant Market in its Favour
41. The notion of dominance is linked to the degree of effectiveness of competitive constraints
exerted by the undertaking in question, on the competition in the relevant market.87 In the
instant case, BKL made the franchises sign an agreement to give it the rights to award a
single joint contract for merchandising on behalf of all of them.88 In addition to this, when the
franchise owners decided to protest, these protests were not taken into account.89
Furthermore, the forfeiture of security clause prevented the franchises from extensively
questioning the acts of BKL. It also restricted the franchises right of refusal to enter into the
agreement with BKL, lest they get expelled or a fine be imposed on them. 90 Therefore, BKL
has the ability to engage in conduct that excludes competition or prevents the entry of
newcomers into the relevant market. Hence, it is able to influence the relevant market in its
favour.91
42. In the absence of countervailing buyer power, there is a prima facie appearance that an
enterprise is in a dominant position in the relevant market.92 Countervailing buying power is
in respect to the consumers of the end product. In this case, BKL was a monopolist in the
market and the buyers did not have any countervailing buying power.93 Therefore BKL is in a
position to control prices and make consumers dependent on them.94
87 Enforcement Guidance, supra note 35, 10.
88 Proposition, 22, Line 2.
89 Proposition, 26, Line 2.
90 Proposition, 26, Line 6.
91 Boosey, supra note 39, 18; 19(4)(h), Competition Act, 2002.
92 Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case No. 63/2014, 18 (CCI).
93 Hugin, supra note 77, 10.
94 19(4)(f), Competition Act, 2002.
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43. Collectively all these factors help to assert that BKL is in a dominant position in the
identified relevant market.
N. THE ACTIONS OF BKL CONSTITUTE AN ABUSE OF DOMINANT POSITION IN THE RELEVANT
MARKET
44. It is submitted that BKL has abused its dominant position by indulging in practices that result
in denial of market access. CCI has held that exclusive dealing by a dominant enterprise
amounts to a restriction on the market and therefore constitutes abuse of its dominant
position.95 BKL entered into an exclusive supply agreement with Cougar and also added an
automatic renewal clause to this agreement.96 This results in the denial of market access as
other merchandising firms were barred from entering into the market and manufacturing BKL
merchandise.
45. Additionally, there is a constructive refusal to supply by BKL because of the exclusive supply
agreement with Cougar and the automatic renewal clause. This results in abuse of dominant
position by denying market access.97
46. Furthermore, foreclosure in a downstream market results in restriction on customers and
leads to a loss in consumer welfare.98 This is because foreclosure results in entry barriers in
95 GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Case No. 01/2010,
84.16 (CCI) [hereinafter, GKB]; Enforcement Guidance, supra note 35, 32.
96 Proposition, 22, Line 5-6.
97 Kapoor Glass, supra note 36, 35; Enforcement Guidance, supra note 35, 79; CBEM v.
CLT & IPB (Telemarketing), 1985 ECR 3261, 20 (ECJ); Irish Sugar v. Commission, 1999
ECR II-2969, 166 (ECJ).
98 Peeveear Medical Agencies v. All India Organization of Chemists and Druggists, Case No.
30/2011, 13.12.11 (CCI) [hereinafter, PVR].
Page | 18
the downstream market and may also result in existing competitors leaving the market.99 This
denies the consumer from availing services, leading to consumer harm, which is a form of
denial of market access to buyers of the end products.100
47. Additionally, the Essential Facility Doctrine has been used by EU and the CCI to show abuse
by a dominant enterprise, by denying market access.101 According to the Commission, a
facility is essential if without its access there is, in practice, an insuperable barrier to entry for
competitors of the dominant company, or if without its access, competitors would be subject
to a serious, permanent and inescapable competitive handicap making their activities
uneconomic.102 In the instant case, first, the right to award merchandising rights for BKL
matches only rests with BKL and it cannot be duplicated.103 Secondly, this facility is also
necessary to enter the relevant market because there are no substitutes for it.104 Lastly,
everyone wishing to enter this relevant market needs the facility because without the right to
award such a contract, they could not sustain in the market.105
48. Further, to check whether there is denial of market access, we need to take into account the
control of the facility by the monopolist, the denial of its use, and the feasibility of providing
99 HT Media Limited v. Super Cassettes Industries Limited, Case No. 40/2011, 23 (CCI).
100Kansan, supra note 76, 23.
101 Kataria, supra note 41, 3.9.19; Arshiya Rail Infrastructure Limited v. Ministry of
Railways (MoR), Case No. 12/2011, 7.1.8, (CCI); Sea Containers v. Stena Sealink - Interim
Measures, 1994 OJ (L 15) 8, 9 (EC); Oscar/Bronner [1998] ECR I-7791, 34 (ECJ)
[hereinafter, Bronner].
102 Report by the EC Commission in OECD, The Essential Facilities Concept, 97 (1996).
103 IMS Health GmbH v NDC Health GmbH & Co. KG, Case C-418/01, 49 (EC).
104 Bronner, supra note 101, 25.
105 Bronner, supra note 101, 27.
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it.106 In this case, BKL completely and exclusively controls the giving away of merchandising
rights for BKL matches.107 It was generally feasible for BKL to provide this facility to the
franchises by not entering into the agreement for joint selling of the rights. Thus, BKL denied
the use of this essential facility to other competitors in the market, restricting their entry.
49. It can be concluded that BKL withheld the essential facility needed to enter into the relevant
market, thus denying market access. Cumulatively, this resulted in the abuse of dominant
position by BKL, thus contravening 4(1) of the Act.108
IV.
50. The Act prohibits any two enterprises from entering into an agreement which causes
appreciable adverse effect on competition within India.109 It is submitted that the exclusive
supply agreement for merchandise of BKL matches should be declared void because first, the
agreement is a vertical restraint as defined under 3(4) of the Act [A] and secondly, the
agreement causes AAEC in the market [B].
A THE AGREEMENT IS A VERTICAL RESTRAINT UNDER 3(4) OF THE ACT.
55. Agreements within the purview of 3(4) of the Act would be in contravention of 3(1) only if
they are likely to cause AAEC.117 Such agreements are not per se illegal and there is no
presumption that they cause AAEC.118 The rule of reason is applied to assess such
agreements.119 The likely pro-competitive and anti-competitive effects of an agreement are to
be evaluated on a case to case basis, and only a net negative impact on competition renders it
void.120
56. In this regard, it is submitted that first, the merchandising agreement cause a negative impact
on the market [i] and secondly, the ameliorating effects are not enough to counter the effect
caused by the aggravating effects [ii].
I
57. It is submitted that that BKLs agreement with Cougar causes AAEC in the relevant market
because first, BKL has a majority share in the relevant market,[a] secondly, BKL entered into
an exclusive supply agreement with Cougar, that causes anti-competitive effects [b] and
lastly, the agreement between BKL and Cougar had an automatic renewal clause [c].
a
117 3(4) r/w 19(3), Competition Act, 2002; Kataria, supra note 41, 20.6.11.
118 Sunshine Pictures v. Eros International Media, Case No. 52/2010, 5 (CCI).
119 Tata Engineering and Locomotive Co Ltd (Telco) v. The Registrar of Restrictive Trade
Agreement, 1977 AIR 973, 693 (SC).
120 Kataria, supra note 41, 20.6.33; Delimitis v. Henninger Brau AG, 1991 ECR I-935, 13
(ECJ); Continental T.V. v. GTE Sylvania, 433 U.S. 36 (1977), 11 (USSC); Automobiles
Dealers Association, Hathras v. Global Automobiles Ltd, Case No. 33/2011, 12.7 (CCI)
[hereinafter, Automobiles].
Page | 22
58. The market share of the seller in the relevant market is crucial for deciding whether there is
AAEC in the market due to the exclusive supply agreement.121 The act of entering into
exclusive supply agreements by dominant players causes market foreclosure.122 The De
Minimis doctrine states that where the market share held by each of the parties to the
agreement exceeds 15% on any of the relevant markets affected by the agreement, it may
cause AAEC.123
59. As established earlier in the memorandum, BKL is in a dominant position in the relevant
market owing to its large market share.124 Such an enterprise, when enters into an agreement
which falls under the vertical restraints under 3(4), causes foreclosure of competition by
hindering entry into the market.125
60. Such foreclosure is considered substantial because the degree of market foreclosed deprives
new or existing manufacturers of the ability to obtain economies of scale and thereby
improve effective inter-brand as well as non-price competition.126 It also deprives them of the
121 Sonam Sharma v. Apple Inc., Case No. 24/2011, 20 (CCI); Automobiles, supra note
120, 12.10.
122 EU Exemption Regulation 330/2010, 9.
123 Commission Notice on agreements of minor importance (De Minimis), OJ C 368/07, 9;
Expedia Inc. v. Autorit de la concurrence, Case C-226/11, 23 (ECJ); Volk v. Vervaecke,
[1969] ECR 295, 34 (ECJ).
124 Memorandum, 39.
125 U.S. v. Microsoft, 253 F.3d 34, 202 (Court of Appeals).
126 European Commission Guidelines on Vertical Restraints, O.J. 2010 (C 130) 1, 101
[hereinafter, Vertical Guidelines]; Consumer Online Foundation v. Tata Sky, Case No.
Page | 23
02/2009, 45 (CCI).
127 Memorandum, 48.
128 Kapoor Glass, supra note 36, 35 (CCI).
129 GKB, supra note 95, 84.16; Enforcement Guidance, supra note 35, 32.
130 U.S. Healthcare v. Health Source, 61 USLW 2595, 26 (Court of Appeals).
131 Vertical Guidelines, supra note 126, 133.
Page | 24
agreement with Cougar for the first season of BKL.132 Therefore, compounded by the
dominant position of BKL, this agreement causes market foreclosure.
63. Additionally, BKL did not adhere to any tendering process while awarding this contract.133
The competitors were not given a chance to bid for the merchandising rights.134 This results in
foreclosure of market and denying market access to competitors, driving them out of the
market.135
e. The Agreement Between BKL And Cougar Had An Automatic Renewal Clause.
64. It is a settled position of law that an auto renewal clause frustrates entry into the market.136
Auto-renewing contracts with same party repetitively to the exclusion of other parties or
entering into long term agreements without an exclusivity clause, but with a restricted
termination clause, equals exclusivity.137 Without taking competitive forces into
consideration, BKL agreed to give Cougar the merchandising contract for the next season at a
20% premium over the current seasons prices.138 This could create entry barriers for
competitors at the downstream level.139 The competitors are denied the chance to vie for the
merchandising rights of BKL causing denial of market access and foreclosure of market for
132 Clarifications, Q34.
133 Clarifications, Q8.
134 BCCI, supra note 15, 36.
135 BCCI, supra note 15, 6.1.
136 Report by EC Commission In OECD, Competition Issues Related to Sports, 41 (1996).
137 A. Roy, COMPETITION LAW IN INDIA, 130 (2nd edn., 2014)
138 Proposition, 22, Line 5-6.
139 Vertical Guidelines, supra note 126, 197.
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the competitors.140 This also amplifies the AAEC caused by the exclusivity and the joint
nature of the contract.
65. In conclusion, it is submitted that the joint nature of the agreement, compounded by its
exclusivity and the auto-renewal clause, cause adverse appreciable effects on the competition.
This contributes towards the agreement being anti-competitive.
v.
The Ameliorating Effects Are Not Enough To Counter The Effect Caused
By The Aggravating Effects
66. The restrictions in the agreement have to be assessed in the context of the market to
determine their net effect on competition.141 The vertical restraints in the agreement need to
be reasonable for it to have a positive effect on competition. 142 The Act enumerates various
factors like benefits to the customers, improvement in production and distribution, scientific,
technical and economic development etc. to be taken into account to analyze the ameliorating
effects of the agreement.143
67. Exclusive supply agreements with automatic renewal clauses reduce countervailing buying
power of the final consumers in the downstream market.144 As argued above,145foreclosure in
a downstream market results in restriction on customers and leads to a loss in consumer
140 BCCI, supra note 15, 6.1; Standard Oil Co. of New Jersey v. US 221 U.S. 1 (1911), 69
(USSC); Ford Motors v. US, 335 U.S. 303 (1948), 313 (USSC).
141 Nungesser v. Commission, 1982 ECR 2015, 87 (ECJ); Societe Technique Miniere v.
Maschinendau Ulm, 1966 ECR 337, 20 (ECJ).
142 Board of Trade of the City of Chicago v. US, 246 US 231, 241 (USSC).
143 Kapoor Glass, supra note 36, 85; Enforcement Guidance, supra note 35, 79.
144 19(3)(d)-(f), Competition Act, 2002.
145 Memorandum, 46.
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welfare.146 In this case, BKL restricts the granting of merchandising rights to one
manufacturer by the joint selling agreement. The final consumers have to now buy the
product from only that manufacturer due to the exclusive supply, instead of having the option
of multiple manufacturers, which would be the case if the franchises would have individually
given out the contracts.147 This causes loss in consumer welfare instead of benefitting the
consumers, increasing the AAEC in the market.
68. Furthermore, as argued above, BKL denies its competitors the use of the essential facility that
it holds, viz. the right to grant a merchandising contract for BKL.148 In doing so, it restricted
entry into the relevant market, thus denying market access and not promoting improvement in
production and distribution facilities of the competitors in the downstream market.
69. Therefore, even if exclusive contracts and auto-renewal clauses promote technical
development in one company by enabling them to make long-term investments, overall they
have negative effects on the entire competition. The ameliorating effects are not enough to
counter the aggravating effects of the exclusive supply agreement, and hence it has net
negative impact on the competition.
70. In conclusion, it is submitted that the agreement between BKL and Cougar is a vertical
restraint under 3(4) of the Act, and it causes considerable AAEC on the market. Therefore it
is in contravention of 3(1) of the Act, and under 3(2), such an agreement should be
declared void.
V.
71. It is submitted that KFB and BKL have violated 4 of the Act because, first, KFB and BKL
fall under the ambit of the Act [A]. Secondly, KFB and BKL are dominant in the relevant
market [B]. Thirdly, KFB and BKL have abused their dominant position [C]. Lastly, CCBs
order should be upheld to avoid conflict of interest. [D]
A KFB AND BKL FALL UNDER THE AMBIT OF THE ACT
i
72. An enterprise includes a person engaged in any activity, relating to the provision of services,
of any kind, not including any activity relating to the sovereign functions of the
Government.149 Service includes service of any description which is made available to
potential users, including those in connection with entertainment and amusement.150 The fact
that the services being offered relate to sports does not preclude their classification as an
economic activity. 151 A not for profit status does not take a person out of the definition of
enterprise, as the specific exceptions have been provided only for activities relating to
sovereign functions of the Government.152
73. In the instant case, KFB, which is the National Federation of Bohemia for Kabaddi, is a
registered society.153 It has the function of selecting the national team and supervising the
state associations.154 It qualifies as a person under the Act since it an association of persons,
whether incorporated or not.155 Even an activity such as regulation of sports would qualify a
body as an enterprise.156 KFBs activities extend not only to the regulation of kabaddi in
Bohemia but also the organization of kabaddi events, as is evidenced from its launch of BKL.
This aspect of organization involves revenue generating activities such as grant of media and
merchandising rights which are economic activities.157 Therefore, it is submitted that KFB is
an enterprise under 2(h) of the Act. Further, as argued above,158 BKL is also an enterprise.
vi.
74. A group is defined as two or more enterprises where one enterprise, directly or indirectly, is
in a position to control the management or affairs of the other enterprise.159 As argued above,
both KFB and BKL are enterprises.160 KFB is in a position to control the management of
BKL because, the BKL Governing Council reports to KFB.161 Therefore, KFB and BKL form
a group under the Act.
75. A person or group whose activities consist not only of authorising the organisation of
sporting events, but also organising such events itself and entering, in that connection, into
ancillary commercial contracts, falls within the scope of competition law.162 Therefore, it is
submitted that KFB and BKL fall under the ambit of the Act.
P. KFB AND BKL ARE DOMINANT IN THE RELEVANT MARKET
i
76. Relevant product market means a market comprising all those services regarded as
interchangeable or substitutable by the consumer, by reason of characteristics and intended
use of those services.163 While determining the relevant product market, due regard must be
given to consumer preferences.164 The ultimate viewers of a sporting event should be
consumers of the end product, i.e. the sporting event.165 Therefore, in the instant case market
should be defined from the viewers perspective.
77. As argued above,166 sports constitute a distinct market from other forms of entertainment
because these are not substitutable for the viewers. Further, the viewers of kabaddi will not
161 Proposition, 8, Line 6.
162 Motosykletistiki Omospondia Ellados NPID (MOTOE) v Elliniko Dimosio, Case
C-49/07, 53 (ECJ) [hereinafter, MOTOE].
163 2(t), Competition Act, 2002.
164 19(7)(c), Competition Act, 2002.
165 Hockey India, supra note 12, 10.9.7.
166 Memorandum, 5.
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substitute it with any other sporting event.167 Owing to the differences between national and
international kabaddi matches and private professional kabaddi leagues, they cannot be
regarded as interchangeable.168
78. In BCCI169, CCI identified the relevant market as market for the organisation of private
professional cricket leagues in India. Additionally, in Hockey India,170 CCI identified the
relevant market as market for the organisation of private professional hockey leagues in
India. Similarly, in the instant case, the relevant market should be identified as the market
for market for the organisation of private professional kabaddi leagues.
79. While determining the relevant geographic market due regard shall be had to regulatory
barriers, local specification requirements and consumer preferences.171 The geographic
market for the organising of sporting events is usually national in scope.172 It is reasonable to
assume that the demand for Bohemian kabaddi events by the ultimate consumers, i.e. the
viewers, cannot be readily substituted by kabaddi events outside of Bohemia due to factors
such as fan following of Bohemian players and teams, international broadcasting regulations,
difficulty in attending matches abroad, etc. Thus, in the instant case, the relevant geographic
market should be restricted to the territory of Bohemia.
80. In conclusion, it is submitted that the market for the organising of private professional
kabaddi leagues in Bohemia should be the relevant market.
167 Memorandum, 6.
168 Memorandum, 6.
169 BCCI, supra note 15, 8.38.
170 Hockey India, supra note 12, 10.9.15.
171 19(6), Competition Act, 2002.
172 Hockey India, supra note 12, 10.9.17; FAPL, supra note 14, 23; BCCI, supra note 15,
8.38.
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vii.
81. It is submitted that KFB and BKL are in a dominant position in the relevant market because
first, they can operate independently of the competitive forces prevailing in the relevant
market [a], and secondly, they can affect competitors, consumers and the relevant market in
their favour [b].
a
KFB And BKL Can Operate Independently Of The Competitive Forces Prevailing In The
Relevant Market
82. Market share is one of the relevant factors to be taken into consideration when inquiring into
whether an enterprise enjoys a dominant position.173 CCI has held that national sporting
federations have a dominant position in the market for organising private professional
leagues, owing to their powers like regulatory role, control over players etc.174 Similarly, in
the instant case KFB enjoys a monopoly position since it is the selector of the Bohemian
national team and the sole regulatory authority with respect to kabaddi in Bohemia due to its
affiliation with SAKF and BOA.175
83. Further, KFBs regulatory monopoly puts it in a position to create entry barriers for
organisers and players. This is because, the approval of KFB is critical for the organisation
and success of any kabaddi league. This lets it operate independently of the prevailing
competitive forces in the market and is an important source for KFBs dominance.
f. BKL And KFB Can Affect Competitors, Consumers and the Relevant Market in
its Favour
84. The advantages peculiar to the dominant enterprise constitute barriers to entry.176 In the
instant case, it is reasonable to assume that the supervisory powers and network of KFB and
173 19(4)(a), Competition Act, 2002.
174 Hockey India, supra note 12, 10.10.2; BCCI, supra note 15, 114.
175 Proposition, 5, Line 5-9.
Page | 32
its member associations give BKL commercial advantages over potential competitors in the
market for kabaddi events in Bohemia with respect to seeking venues, coaches, referees etc.
85. Further, all kabaddi players in Bohemia have contracts with state associations, the apex body
of which is KFB, making the players entirely dependent on it.177 After the announcement of
KFBs regulations, 8 players who had been made to sign fresh agreements with the state
associations terminated their pre-existing contracts with KSL.178 While this may or may not
have affected the success of KSLs second season, it is indicative of KFBs ability to affect
competitors and consumers, in this case, the players. KFB has the authority to declare any
event as sanctioned or unsanctioned and the power to enforce disciplinary action or even
termination in case of player participation in such unsanctioned events. Therefore a position
of dominance can be said to exist.
86. In conclusion, it is submitted that KFB can affect its competitors and consumers in the
relevant market, and hence, holds a dominant position.
Q. BKL AND KFB HAVE ABUSED THEIR DOMINANT POSITION
i
87. An enterprise or a group can be said to have abused its dominant position when it indulges in
any practice that results in denial of market access.179 In the instant case, it is submitted that
the regulations issued by KFB and subsequent agreements signed by the players with the state
associations adversely affected the competitors as well as players access to the market. The
176 Kataria, supra note 41, 20.5.61.
177 Proposition, 5, Line 5-6.
178 Proposition, 11, Line 1-4.
179 4(2)(c), Competition Act, 2002; Michelin v. Commission, [1983] ECR 3461, 57
(ECJ).
Page | 33
89. The consequential effects restrictive of competition of a practice must be inherent in the
pursuit of the legitimate objectives sought to be achieved and proportionate to them.183 In the
instant case, a defence may be raised that the regulations imposed by KFB seek to ensure the
integrity of the sport, efficient supervision, availability of players to represent Bohemia
internationally, prevention of clashes with events of national and international significance
etc. However, it is submitted that the regulations are disproportionate to their intended
objective.
90. Proportionality of the regulations can only be decided by considering the manner in which
regulations are applied.184 In the instant case, the intended objectives can be achieved through
the maintenance of a sporting calendar for kabaddi by KFB and other measures. Further, KFB
scheduled the national camp on the same dates as KSLs second season, whose dates were
previously announced.185 This shows the disproportionate application of the regulations by
KFB. Therefore, it is submitted that the actions of KFB and BKL constitute abuse of
dominance under 4(2)(c) of the Act.
R. CCBS ORDER SHOULD BE UPHELD TO AVOID CONFLICT OF INTEREST BETWEEN
KFB AND BKL
VI.
92. COMPAT has the power to pass an order for compensation under 53N of the Act, for the
loss or damage caused to the applicant as a result of any contravention of the provisions of
Chapter II by any enterprise.188 It is submitted that the COMPAT should adjudicated upon the
compensation application of X Sports because first, all the conditions mentioned under 53N
of the Act have been fulfilled [A]. Secondly, the legislative intent of 53N shows that a
restriction on the claim for compensation, during pendency of appeal on the infringement
decision, was not intended [B].
A ALL THE CONDITIONS MENTIONED UNDER 53N OF THE ACT HAVE BEEN FULFILLED.
93. 53N(1) provides the conditions under which an application to the COMPAT to adjudicate a
claim for compensation can be filed by a person or enterprise.189 It is submitted that all the
conditions have been fulfilled because, first, X Sports is an enterprise[i]. Secondly, the claim
has arisen out of the order of the COMPAT in an appeal against a finding of the Commission
[ii]. Lastly, X Sports has suffered loss as a result of the abuse of dominant position by BKL
and KFB [iii].
i
94. 53N provides that an application for compensation can be filed only by the central or state
government, a local authority, an enterprise or any person.190 In the instant case, X Sports is a
firm, which is engaged in the activity relating to the Television broadcasting.191 Therefore, it
is submitted that X Sports is an enterprise.
ix.
95. The Act provides that the claim for compensation should arise from the findings of the
commission or the orders of COMPAT in an appeal against any finding of the Commission.192
In the instant case, COMPAT has passed the order with the findings that KFB and BKL have
abused their dominant position in relation to agreements with players.193 Therefore, it is
submitted that the claim of X Sports has arisen out of the abovementioned order of COMPAT.
x.
96. The enterprise filing the claim for compensation is required to show that it has suffered some
loss or damage as a result of any contraventions of the provisions of Chapter II of the Act by
the abusive enterprise. In the instant case, the conduct of BKL and KFB in relation to the
player agreements, has resulted in the denial of market access and market foreclosure for X
Sports league KSL. Due to this, the second season of KSL wasnt as much of a success as the
first. Further, some national team players terminated their contracts with KSL and did not
participate in the second season.194 Therefore, it is submitted that X Sports suffered loss and
damages because of the abusive conduct of BKL and KFB.
97. In conclusion, it is submitted that all the conditions under 53N are fulfilled. Therefore,
COMPAT is wrong in putting the claim under abeyance.
S. THE LEGISLATIVE INTENT OF 53N SHOWS THAT A RESTRICTION ON THE CLAIM FOR
COMPENSATION, DURING
THE
the infringement decision can be appealed.200 However, such provision was repealed from the
Competition Act, 1998 in 2015.201 Therefore, there is no restriction on filing a claim for
compensation during the pendency of the appeal of the infringement decision after the
removal of the specific provision. Similarly, there is no such specific clause in 53N of the
Act. This proves that the legislature never intended to put any such restriction on the claim
for compensation during the pendency of the appeal on the infringement decision.
100.
the Supreme Court will lead to great hardship on the parties, particularly since there will be
no reliable way of predicting the length of such a stay.202 Therefore, the decision of the
COMPAT to put the matter under abeyance during the pendency of the appeal in the SC is
against the legislative intent of the 53 N. In conclusion, it is submitted that, COMPATs
decision to put the compensation claims of X Sports, under abeyance during the pendency of
the appeal, is not valid.
PRAYER
Wherefore in light of the issues raised, arguments advanced and authorities cited, it is humbly
prayed that this Honourable Court may be pleased to adjudge and declare that:
1
BKL has violated 4 of the Competition Act with respect to the exclusive
broadcasting agreement.
Luminous has not violated 4 of the Competition Act with respect to the internet
broadcasting rights.
BKL has violated 4 of the Competition Act with respect to the merchandising
agreement.
The agreement between BKL and Cougar violates 3 of the Competition Act.
BKL has violated 4 of the Competition Act with respect to the player contracts.
COMPATs decision to put the compensation claims under abeyance is not valid.
And pass any other order that this Honble Court may deem fit in the interests of justice,
equity and good conscience.
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