CCI setting the precedent on sectoral overlaps

In the recent years, the interface between a Sectoral Regulator and the Competition Commission of India (CCI) has assumed great significance. The objective is to ensure that markets work for the benefit of business and consumers, either through competition or regulation. By the end of year 2018, the Apex Court brightened the blurred line of jurisdiction between the Sectoral Regulator (TRAI) and the Market Regulator (CCI) by deciding upon the roles played by both the regulators.

In the backdrop, the High Court of Bombay in September 2017 had quashed the prima facie order of the CCI directing the Director General (‘DG’) to investigate into a complaint filed by Reliance Jio (RJio) alleging cartelisation by Bharti Airtel (represented by Advaita Legal) and Vodafone, Idea and through the platform of Cellular Operators Association (‘COAI’) for alleged delay and denial in the provisioning of Points of Interconnection (‘PoIs’). [LSI-1911-HC-2017-(BOM)]

The High Court of Bombay observed that the order of the CCI was without jurisdiction and liable to be quashed and set aside being perverse. This was challenged by the CCI and RJio before the Supreme Court [LSI-493-SC-2018]. While upholding the order passed by the High Court of Bombay, the Supreme Court clarifies that where jurisdictional facts containing technical issues are pending before a Sectoral Regulator which are also the subject matter of complaint before the CCI, a Sectoral Regulator is the competent authority to decide the jurisdictional facts at the first instance. Thereafter, the CCI can be activated to investigate the matter going by the criteria laid down in the relevant provisions of the Competition Act and take it to its logical conclusion.

In line with the above decision of the Supreme Court, the CCI rightly closed a recent case filed by a Rajasthan based advocate, against National Stock Exchange of India Ltd. (‘NSE’). It was alleged before the CCI that by giving unfair preferential access to some trading members of its ‘co-location services’[1], the NSE had limited and restricted the provision of services to other trading members availing the co-location service which resulted in ‘denial of market access’ to others, to whom such unfair access was not given. It was also informed that Securities and Exchange Board of India (‘SEBI’) being the Sectoral Regulator is also investigating into the said issue which was the subject matter of the present complaint before the CCI.

Thus, the CCI rightly closed the matter due to the following two reasons and took note of the fact that SEBI is looking at similar issues as alleged by the complainant which are pending investigation:

• The allegations against NSE are yet to be established in an appropriate proceeding; and
• There was not sufficient information before it about the role attributable to NSE.

Even though the CCI observed that discriminatory and abusive conduct falls foul of the provisions of the Competition Act and is within its jurisdiction which can be independently examined by it, yet closing the case is a positive step for establishing the right precedent on the issue of overlapping jurisdictions.

Even the Apex Court’s judgement has not ousted the CCI’s jurisdiction to look into the telecom matters. It rather strengthens the fact that only the CCI is empowered to deal with the anti-competitive act from the lens of the Competition Act. We may expect that the long standing debate on CCI vs. Sectoral Regulators will now come to an end.