The Ministry of Corporate Affairs, Government of India has again extended the exemption granted to Vessels Sharing Agreements (VSA) of Liner Shipping Industry from the provisions of Section 3 (i.e., anti-competitive agreements) of the Competition Act, 2002 (as amended) (Act) for a period of one year, with effect from 20 June 2017 (VSA Exemption). The VSA Exemption applies to carriers of all nationalities operating ships of any nationality from any Indian port as long as such agreements do not include concerted practices involving fixing of prices, limitation of capacity or sales and the allocation of markets or customers.
On 8 May, 2017, in a landmark judgment, the Hon’ble Supreme Court (bench consisting of Hon’ble Mr. Justice A.K. Sikri and Hon’ble Mr. Justice N.V. Ramana) upheld the principle of “relevant turnover” for determination of penalties in competition law contraventions; and settled a critical issue in India’s antitrust jurisprudence, which was heavily debated amongst all stakeholders for over five years.
The above ruling arises out of a proceeding involving an alleged contravention of Section 3(3) of the Competition Act, 2002 (Competition Act) in the public procurement of Aluminium Phosphide (ALP) Tablets by the Food Corporation of India (FCI). The Competition Commission of India (CCI) found a violation of Section 3(3) of the Competition Act and imposed a penalty at the rate of 9% of the total turnover of the concerned ALP manufacturers – namely, Excel Corp Care Limited (Excel), United Phosphorus Limited (UPL) and Sandhya Organic Chemicals Private Limited (Sandhya).
On March 22nd, 2017, nearly seven years since the introduction of the leniency regime in India, the Competition Commission of India (CCI) has proposed the first set of amendments to the Competition Commission of India (Lesser Penalty) Regulations, 2009 (Leniency Regulations) and invited comments from stakeholders.
In line with most developed competition law regimes, the Competition Act, 2002 (Competition Act) also provides for establishment of a leniency regime in India. Section 46 of the Competition Act, supplemented by the Leniency Regulations, draws up the leniency regime in India. The regime enables enterprises to come forward and provide information on cartel arrangements and, in return, avail themselves of up to 100% reduction in penalties.[i]
In view of the CCI’s powers and increasing awareness of the Competition Act, the past few years have seen a number of enterprises come forward to gain benefit of the leniency provisions. In fact, in January this year, the CCI passed its first ever order in a leniency matter[ii] and a glance at the proposed amendments indicates that the CCI is seeking to clarify issues relating to procedures in such matters.
On 7 March 2017, the Supreme Court of India (SC) upheld an appeal by the Competition Commission of India (CCI) against an order of the Competition Appellate Tribunal (COMPAT) in a case of alleged cartelisation by members of a film and television artists’ trade union in the state of West Bengal. This order of the SC (Order) is arguably the first of the apex court on substantive issues arising under the provisions relating to anti-competitive agreements under the Competition Act, 2002 (Competition Act).
The matter arose out of information filed by a distributor and telecaster of regional serials in Eastern India, including the state of West Bengal (Informant). The Informant alleged that he had been assigned the rights to dub and telecast the television serial ‘Mahabharat’ in Bengali and had entered into agreements to telecast it on two television channels. However, under opposition and pressure from two associations, namely the Eastern India Motion Picture Association (EIMPA) and the Committee of Artists and Technicians of West Bengal Film and Television Investors (Co-ordination Committee), one of the two channels decided to not proceed with the telecast.
The Co-ordination Committee is a joint platform comprising the Federation of Cine Technicians and Workers of Eastern India, and West Bengal Motion Pictures Artists Forum. Upon one channel deciding to not telecast the dubbed serial, the Informant decided to approach the CCI and filed an information alleging that the restrictive acts of EIMPA and the Co-ordination Committee were in violation of the provisions of the Competition Act.