Mar 22, 2018Supreme Court passes its judgment in CCI v M/s Fast Way Transmission Private Limited & Ors*
On January 24, 2018, the Hon’ble Supreme Court of India (‘Supreme Court’) quashed the decision of the Competition Appellate Tribunal (‘COMPAT’) which overturned the order passed by CCI against Fast Way Transmission Private Limited (‘Fast Way’).On August 1, 2010, the broadcasters of the news channel ‘Day & Night News’ (‘Broadcasters’) entered into a channel placement agreement with the Multi System Operators (‘MSOs’), forming part of the Fast Way group, for a period of one year. A notice of termination was served on the Broadcasters, which was alleged to be an act of abuse of dominant position by the MSOs in denying market access to the Broadcasters.In its order, CCI found that the MSOs were dominant in the relevant market, having 85% of the total subscriber share. CCI opined that the MSOs’ reason for termination, that the Broadcasters had low television rating points (‘TRP’), and that the MSOs were facing spectrum constraint, were insufficient and mere afterthoughts put forth by the MSOs. Accordingly, a penalty of ₹ 8,40,01,141 was imposed by CCI on the MSOs.In appeal before the COMPAT, CCI’s order was reversed. The COMPAT held that a broadcaster cannot be said to be a competitor of MSOs, and denial of market access can be caused only by one competitor to another.The Supreme Court observed that CCI has a positive duty to eliminate all practices that lead to an adverse effect on competition. Distinguishing from the opinion of the COMPAT, the Supreme Court held that for there to be an abuse of dominant position, once dominance is made out, it becomes irrelevant whether the parties are competitors or not. The Supreme Court observed that Section 4(2)(c) of the Competition Act would be applicable for the simple reason that the Broadcasters were denied market access due to an unlawful termination of the agreement between the Broadcasters and MSOs. The Supreme Court noted that the position of dominance of the MSOs was clearly made out, owing to subscriber share of 85% enjoyed by the MSOs in the relevant market of ‘Cable TV market in Punjab and Chandigarh’ and held that the MSOs acted in breach of Section 4(2)(c) by terminating the agreement, but found that the reasons for termination provided by the MSOs were justified, and therefore quashed the penalty imposed by CCI.
*Civil Appeal 7215 of 2014 (Order dated January 24, 2018).