COMPETITION MONTHLY (June-July 2021) DUA ASSOCIATES 1. Karnataka High Court dismisses Amazon and with the exception namely the cases involving Flipkart’s petitions challenging the probe violation of fundamental human rights. ordered by the Competition Commission of India against their business practices The Kar HC accordingly dismissed the writ petitions. The Karnataka High Court (“Kar HC”) has dismissed the writ petitions filed by Amazon As per current information available, this Seller Services Pvt. Ltd. (“Amazon”) and Flipkart judgement is under appeal before a division Internet Pvt. Ltd. (“Flipkart”) challenging an bench of the Kar HC. Arguments have been heard order passed by the Competition Commission of by the Hon’ble Division Bench of the Kar HC in India (“CCI”) dated 13 January 2020 (“Impugned the matter, and order is reserved. Order”) directing investigation under Section 26(1) of the Competition Act, 2002 (“the Act”) by [Case: Amazon Seller Services Private Limited and the Director General. Ors. vs. Competition Commission of India and Ors., W.P. Nos. 3363 of 2020 and 4334 of 2020 (GM-RES). Before the Kar HC, it was argued by Amazon and Order dated 11 June 2021. The full text of the Flipkart that the Impugned Order was ultra vires judgment may be accessed here] the object and purpose of the Act and the said order suffers from non-application of mind. It was 2. Delhi High Court refuses to stay the notice also argued that the CCI had not formed any issued by Director General, Competition prima facie opinion with regard to contravention Commission of India, demanding more of any provision and no notice was provided to information on Whatsapp’s Privacy Policy them by CCI, which was not the practice is earlier cases. The Delhi High Court (“Delhi HC”) has refused to stay the operation of notice dated 4 June 2021 The CCI responded by stating that an order made issued by the Director General, Competition under Section 26(1) of the Act by the Commission Commission of India (“DG”) demanding from was an 'Administrative Order' directing WhatsApp LLC (“Appellant”) more information conducting of departmental proceedings and it on its new Privacy Policy. does not determine any right or obligation of parties nor entail any civil consequences. Further, A Letter Patent Appeal (“LPA”) has been filed the Petitioners, among other things, have not before the Delhi HC (division bench) by the challenged the inherent jurisdiction of the CCI to Appellant, against the decision dated 22 April 2021 direct investigation. passed by the single judge of the Delhi HC. The Kar HC observed that an order under Section By the said order dated 22 April 2021, the Delhi HC 26(1) of the Act passed by the CCI was an refused to set aside Competition Commission of 'administrative direction' to one of its wings India (“CCI”) order dated 24 March 2021 where departmentally and without entering upon any CCI had directed a suo-moto investigation against adjudicatory process. Further, the said provision WhatsApp Inc. for alleged abuse of dominance in does not mention about issuance of any notice to relation to its recently updated privacy policy any party before or at the time of formation of an regarding data-sharing between WhatsApp and opinion by the CCI on the basis of information Facebook. received by it. The Appellant had filed an application bearing The Kar HC also observed that the CCI had C.M. No.18800/2021 before the Delhi HC in the examined the material produced by the LPA, seeking stay of notice dated 4 June 2021 informant, information available in public issued by DG and also sought restraint against any domain etc. and had looked into the information further action pursuant to the order dated 24 in detail and applied its mind. Further, in a writ March 2021 made by the DG in Suo-Motu case petition filed under Article 226 of the Constitution No.1/2021, during the pendency of the LPA. of India, seeking judicial review, the High Court can examine only the decision-making process COMPETITION MONTHLY (June-July 2021) DUA ASSOCIATES The Delhi HC observed that the impugned notice position by Google, in violation of various by the DG was a step-in furtherance of the provisions of the Act. investigation commenced in Suo-Motu case No.1/2021 pursuant to order dated 24 March 2021. The CCI considered the submissions of the Informants, Google and other OPs and observed The Court further observed that an application that it was of the prima facie opinion that by making seeking stay of further steps in the investigation pre-installation of Google’s proprietary apps already stood filed previously by the application conditional upon signing of Android bearing C.M. No.15908/2021 along with the LPA, Compatibility Commitments for all android on which notice had already been issued; in which devices manufactured/distributed/marketed by no interim relief was given by the Division Bench, device manufacturers, Google had reduced the and which was already listed before the Division ability and incentive of device manufacturers to Bench for further consideration on 9 July 2021. The develop and sell devices operating on alternative Court, accordingly, did not consider it appropriate versions of Android i.e., Android forks, and to stay the operation of impugned notice dated 4 thereby limiting technical or scientific June 2021, at this stage. During the hearing on 9 development relating to goods or services to the July 2021, no interim relief was granted to the prejudice of consumers in contravention of Section Appellant. 4(2)(b) of the Act. Further, given the dominance of Google in the relevant markets and pronounced [Case: WhatsApp LLC Vs. Competition Commission of network effects, developers of such forked India & Anr., C.M. No.18800/2021 in LPA 163/2021, Android operating system were denied market decided on 21 June 2021 by the Delhi High Court. The access resulting in violation of Section 4(2)(c) of the full text of the judgment may be accessed here] Act. 3. Competition Commission of India initiates The CCI also observed that it was of the prima facie investigation against Google for being prima opinion that mandatory pre-installation of all the facie dominant in Smart TV market Google Applications under Television App Distribution Agreement amounted to imposition of unfair condition on the smart TV device The Competition Commission of India (“CCI”) has manufacturers and thereby was in contravention ordered an investigation into the conduct of of Section 4(2)(a)(i) of the Act. Google LLC (“OP-1”), Google India Pvt. Ltd. (“OP- 2”) (Collectively “Google”), and other Opposite In view of the aforesaid, CCI directed the Director Parties (Collectively “Opposite Parties”/ OPs), General to cause an investigation to be conducted pursuant to a complaint filed by the Informants, into the matter under the provisions of Section who alleged abuse of dominant position by the 26(1) of the Act. OPs in the smart TV market in contravention of Sections 3 and 4 of the Competition Act, 2002 (“the [Case: In Re: Kshitiz Arya & Anr. Vs. Google LLC and Act”). Ors., Case No. 19/2020, decision dated 22 June 2021. The full text of the decision may be accessed here] It was argued by the Informants that a smart TV required an Operating System (“OS”) to provide 4. Competition Commission of India directs the consumer with an user-interface for facilitating investigation into Amateur Baseball the use of smart TV functions, and the said pre- installed OS cannot be changed. It was also argued Federation of India for abuse of dominant by the Informants that Google was guilty of anti- position competitive practices which violated Section 4 The Competition Commission of India (“CCI”) has read with Section 32 of the Act. In this context, it ordered an investigation into Amateur Baseball was alleged by the Informants that Google entered Federation of India (“ABFI” / “OP”) under the into two agreements with smart TV Original provisions of the Competition Act, 2002 (“the Equipment Manufacturers (OEMs) Xiaomi, i.e., Act”), upon the information filed by OP-3 and TCL, i.e., OP-4, and certain clauses of the Confederation of Professional Baseball Softball said agreements amounted to abuse of dominant Clubs (“CPBSC”/ ‘the Informant’), alleging violation of Section 4 of the Act. COMPETITION MONTHLY (June-July 2021) DUA ASSOCIATES As per the Informant, as a member of the baseball respective State players to participate in any of the ecosystem, it engages with players, coaches, clubs, tournaments organised by such unrecognised and other partners in India and abroad. The bodies, had violated the provisions of Section Informant had scheduled to organise ‘Club 4(2)(c) of the Act as it resulted in denial of market National 2021’ Championship in Hyderabad access to other federations. Further, such conduct during 16 to 21 February 2021, and accordingly it resulting in limiting and restricting the provision shortlisted 8 clubs in the final pool for the event. of services and market therefor, were in However, a letter was sent by ABFI to the contravention of the provisions of Section 4(2)(b)(i) Presidents/ Secretaries of State Baseball of the Act. Associations throughout the country, prohibiting the State Associations from dealing with bodies The CCI was of the prima facie opinion that ABFI and leagues not recognised by it and threatening had violated the provisions of Section 4 of the Act with disciplinary action if any of the players took through its conduct and the matter warranted part in the leagues. Thereafter, clubs which were to investigation. participate in the event, started withdrawing their participation due to the fear of getting banned and Accordingly, the CCI directed the DG to cause an threats by the OP.