On June 20, 2018, CCI disposed off four separate informations alleging contravention of Sections 3 & 4 of the Competition Act, filed by Meru Travel Solutions Private Lmited (‘Meru’) against ANI Technologies Private Limited (‘Ola’), Uber India Systems Pvt. Ltd. (‘Uber’), Uber BV, and Uber Technologies International Inc. through a common order.The allegations against the parties in the four sets of information were broadly similar: (a) that the arrangement entered into between Ola, Uber and their driver-partners is an anti-competitive arrangement as it is designed to lock them into the parties’ network by providing huge incentives; (b) that Ola and Uber are individually or collectively dominant in cities such as Hyderabad, Chennai, Mumbai and Kolkata; (c) that, in the alternate, Ola and Uber are dominant as a ‘group’, due to the presence of common controlling institutional shareholders. The presence of these common shareholders also raises the issue of anti-competitive information exchange; and (d) that the parties had abused this position of dominance by indulging in predatory pricing by offering huge discounts and incentives to customer and driver-partners, and consequentially foreclosing the competition in the market by creating entry barriers.CCI observed that the incentive model offered to driver-partners by Uber and Ola would not fall within the meaning of the term ‘agreement’ which is a pre-requisite under Section 3 of the Competition Act. CCI noted, that per its decisional practice, in the radio taxi service market, both drivers and riders have the option of ‘multi-homing’ by switching easily to a different aggregator by the medium of mobile applications. Further such alleged agreements cannot cause lock-ins and hence, barriers to entry in the radio taxi services market. Accordingly, CCI noted that no contravention of Section 3 of the Competition Act was made out in the case.With respect to the allegations under Section 4 of the Competition Act, CCI noted that per its past decisional practice, the relevant markets in the present case would be the markets for ‘radio taxi services in Hyderabad’, ‘radio taxi services in Chennai’, ‘radio taxi services in Mumbai’ and ‘radio taxi services and yellow taxi services in Kolkata’. Within these markets, CCI observed that, given the nature of competition, prima facie dominance of Uber and Ola individually is not made out. CCI further noted that under the scheme of Section 4 of the Competition Act, a dominant position can be enjoyed only by one enterprise or group, and hence the contention of Meru that Uber and Ola were collectively dominant was without any merit.CCI next considered the allegation that Ola and Uber are dominant as a ‘group’ due to the presence of controlling institutional shareholders such as Softbank, Tiger Global, Sequoia Capital and Didi Chuxing. CCI noted that the issue at hand was whether the presence of common investors in Ola and Uber would lead to the erosion of competitive restraints that each poses on the other. However, while such a theoretical possibility exists, an investigation under the Competition Act cannot be based on conjectures and apprehensions. CCI noted that there is no evidence on record to suggest that competition between Ola and Uber has been compromised in any manner. In the absence of any such discernible effect, CCI held that it would be legally untenable to hold that the parties were influenced in their operational decisions by the common investors. In light of the above, CCI concluded that a prima facie case had not been established against the parties under Section 3 or Section 4 of the Competition Act, and accordingly disposed off the informations under Section 26(2) of the Competition Act.Interestingly, CCI observed that the effect of common ownership on Ola and Uber (who were the only effective competitors in the radio taxi service industry) is still to be fully examined. Hence, while CCI is legally constrained from initiating an investigation at this time, it would monitor the behavior of the parties to determine if any lessening of competition occurs in the future as a result of the aforementioned common ownership.

*Case Nos. 25,26,27 & 28 of 2017.