To proscribe anti-competitive conduct and ensure a competitive market place, the Competition Act, 2002 (‘Act’)  empowers the Competition Commission of India (‘CCI’) to investigate, prohibit and penalise any entity for engaging in conduct that results in an appreciable adverse effect on competition in India. Indeed, the Act’s preamble identifies CCI’s mandate to inter alia ‘eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants.’

Notably, investigations undertaken by CCI are stated to be inquisitorial, and not adversarial, in nature.^[1] In line with CCI’s mandate, this means, inquiries undertaken by CCI address anti-competitive conduct that affects, or is likely to affect, the market in general (in rem). CCI is not concerned with addressing disputes that concern individual grievances (in personam). In fact, the inquisitorial scheme of powers granted to CCI allows it to direct investigations not only against accused parties, but also expand the investigation to other unspecified parties.^[2]

Given CCI’s ability to address concerns in rem, we examine in this article, the extent to which the identity of the informant is relevant in proceedings before CCI? More specifically, we explore whether ‘any person’ has the locus standi to file a case before CCI, in light of CCI’s broader mandate to correct market distortions and existing decisions of CCI and the appellate tribunal.

Who can Inform CCI of Anti-Competitive Conduct?

CCI is empowered to inquire into anti-competitive conduct either on its own volition or upon a reference made by the Government or any statutory authority. The Act specifically empowers ‘any person, consumer or trade association’ to file ‘information’ with CCI apprising it of anti-competitive conduct. The word ‘complaint’ was replaced with the word ‘information’ for notifying CCI of anti-competitive conduct.^[3] Similarly, the words ‘complainant or defendant’ were replaced with ‘person or an enterprise’, thus reducing the importance given to the identity of the person notifying CCI of alleged anti-competitive conduct. Notably, unlike for filing  ‘information’ before CCI, the Act introduces a qualification for filing appeals against appealable decisions of CCI, by only allowing ‘aggrieved persons’ to file such appeals.^[4]

The Present Debate

In 2018, an independent law practitioner, Samir Agarwal, filed information before CCI against Uber and Ola, alleging the existence of a cartel between the respective cab aggregators and their drivers.^[5] CCI dismissed this case citing the lack of evidence to establish an anti-competitive agreement.

In the appeal filed by Agarwal, Uber and Ola challenged the locus of the informant as an ‘aggrieved party’ to file the appeal, as he hadn’t presented any credible evidence of legal injury arising from the alleged conduct. The National Company Law Appellate Tribunal (‘NCLAT’) recognized that the concept of locus standi had been carefully diluted for public interest litigations, class actions suits and whistle blower complaints but, in doing so, was supported by an appropriate legal framework that safeguarded against unscrupulous complaints. In the context of the Act, however, the NCLAT reasoned that allowing ‘any person’ to be an informant before CCI may be misused to target certain enterprises with allegations of anti-competitive conduct. To the extent the Act empowers CCI to take cognizance of anti-competitive conduct through other means, NCLAT held that the term ‘any person’ should necessarily be construed as a person who has suffered an invasion of legal rights as a consumer or beneficiary of healthy competitive practices. On this basis, NCLAT held that Agarwal failed to prove any legal injury caused to him either as a consumer or as part of any consumer or trade association. Although not so categorically, the erstwhile Competition Appellate Tribunal (‘COMPAT’) has in at least one case in 2015, alluded to the need for CCI to examine more closely the informant’s locus at the time of initiating an investigation in, at least, one other case.^[6]

This recent approach of the NCLAT, is in sharp contrast to that adopted by CCI and, indeed, earlier decisions of the appellate tribunal. CCI has consistently maintained that the Act requires it to inquire into any anti-competitive conduct brought to its attention, regardless of whether the informant has personally suffered from such legal injury.^[7] The COMPAT too appeared to have in its earlier decisions supported this view by observing that Parliament had ‘neither prescribed any qualification for the person who wants to file an information under Section 19(1)(a) nor prescribed any condition which must be fulfilled before an information can be filed under that section’.^[8]  

Following NCLAT’s decision in the Agarwal case, CCI appears to have sought to clarify its stance on locus, in a closure order examining allegations of abuse of dominance against WhatsApp Inc. (‘WhatsApp’).^[9] Relying on NCLAT’s observation in Samir Agarwal, WhatsApp challenged the Informant, Harshita Chawla’s (a lawyer claimed to be closely associated with a petitioner who has approached the Apex Court in a case against WhatsApp and Facebook recently) locus to lodge a complaint before CCI, absent any invasion of legal rights as a consumer. CCI dismissed this challenge on the following grounds: (a) CCI is duty- bound to address instances of market distortion regardless of whether the remedy is sought by the informant in rem or in personam and follows an inquisitorial system as upheld by the Supreme Court of India;^[10] and (b) the substance of the information carries greater significance than the identity of the informant.^[11] CCI further noted that this was supported by the amendments to the Act that widened the scope from a ‘complaint’ to ‘information’.^[12] Disagreeing with the decision of the appellate tribunal, CCI held that an informant need not necessarily be an ‘aggrieved party’ by the alleged conduct to bring it to CCI’s notice.

Position in Other Jurisdictions

The qualifications for a locus vary across antitrust jurisdictions. Similar to India, South Africa initiates investigations further to information filed by ‘any person’. In the European Union, citizens are encouraged to inform the European Commission (‘EC’) about suspected infringements of competition laws. Although there is a mechanism for complainants to lodge a formal complaint if they have been affected by allegedly anti-competitive conduct, the EC also provides for ‘any person’ to inform the EC of suspected anti-competitive practice by way of an e-mail, regardless of whether they meet the specific requirements to lodge a complaint. Given that the EC also has the power to initiate investigations, such e-mails act as a starting point to detect market problems. On the other hand, jurisdictions such as Germany, Brazil, Japan and US require complaints to be filed by persons with ‘proximate cause’ or who have been affected by the infringement of competition laws as a result of the alleged anti-competitive conduct. The difference in approach to locus standi, is likely on account of the distinctions in their judicial systems. While competition regulators in the EU and South Africa are inquisitorial bodies, antitrust claims in Germany, Brazil, Japan and the US are adversarial in nature.

Conclusion

Although, CCI seems to have had the last word on locus, it’s difficult to lose sight of the fact that the appellate tribunal appears to take a contrary view. CCI’s position re locus standi of an informant appears to be grounded in a strict reading of the Act and subsequent amendments. Although the NCLAT’s views seem to emanate from legitimate policy considerations of entertaining complaints by persons with no tangible interest in the outcome of the case and the likely increase in frivolous complaints, the Act does appear to have certain checks and balances to, at least limit, if not preclude altogether, this possibility. For example, filing information with CCI requires remittance of filing fees, ranging from INR 5,000 to INR 50,000 (approx. USD 70 to USD 700) depending on the nature of the informant’s identity.^[13] Furthermore, an informant can be penalized with a substantial penalty, if found to have altered, omitted material information or provided incorrect information to CCI.^[14]  

In the meantime, and given the prevailing inconsistency in legal position, enterprises would be well advised not to build their litigation strategy solely on challenging an informant’s locus, although it would arguably qualify as an important part of their legal strategy.

[1] CCI v. Steel Authority of India Ltd., (2010) 10 SCC 744.

[2] Delhi High Court’s decision in Mahindra Electric Mobility Ltd. v. CCI & other related cases, 2019 SCCOnLine Del 8032.

[3] The Competition (Amendment) Act, 2007.

[4] Section 53B of the Act; Jitender Bhargava v. CCI & Ors., Appeal No. 44 of 2013.

[5] Case No. 37 of 2018.

[6] Dr. LH Hiranandani Hospital v. CCI, Appeal No. 19 of 2014.

[7] Shri Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case No. 63 of 2014.

[8] Shri Surendra Prasad v. CCI & Ors., Appeal No. 43 of 2014.

[9] Harshita Chawla v. WhatsApp Inc. & Facebook Inc., Case No. 15 of 2020.

[10]CCI v. Steel Authority of India Ltd., (2010) 10 SCC 744.

[11]Reliance Agency and Chemists and Druggists Association of Baroda & Others, Case No. 97 of 2013.

[12] The Competition (Amendment) Act, 2007.

[13] The charges are Rs. 5,000 (approx. USD 70) in case of individual, Hindu undivided family, non-governmental organization, consumer association or cooperative society and INR 20,000 (approx. USD 270) in case of company/firm having turnover less than INR 1,00,00,000 (approx. USD 136,000) in the preceding year. In other cases the filing fees is INR 50,000 (approx. USD 700).

[14] Section 45 of the Act.