CCI Can Probe Anti-Competitive Practices In TRAI-Regulated Markets: Kerala High Court In JioStar's Appeal

The Kerala High Court has recently held that the Competition Commission of India (CCI) has full authority to investigate allegations of discriminatory pricing and abuse of dominance in the broadcasting market even though the sector is regulated by TRAI.

The court said the Competition Act is an independent enactment that operates in parallel with the Telecom Regulatory Authority of India Act, 1997

It held, "the Comp.Act is an independent special enactment which will operate unhindered by the provisions of the Telecom Regulatory Authority of India Act, 1997 (for short, 'TRAI Act'), dealing with anti competitive practices and would therefore, the CCI possess the jurisdiction to entertain information regarding the allegations of misuse of dominant position by the bigger players in the market"

A bench of Justices Sushrut Arvind Dharmadhikari and Syam Kumar V M on December 3 upheld the Single Judge's decision of May 28 which had refused to interfere with the CCI order of February 28, 2022 against JioStar India. 

That order had directed the Director General to investigate the complaint filed by Asianet Digital Network Private Limited against Jiostar India Private Limited, formerly Star India. The bench agreed that the CCI had acted within its powers. It noted that Parliament had permitted both statutes to function without conflict.

The court observed that the Competition Act and the TRAI Act “would operate unhindered and unobstructed by each other, with the Parliament not putting any inbuilt restrictions on the exercise of powers by the agencies created therein (CCI or TRAI) in the said matter.”

The dispute began after Asianet Digital Network approached the CCI in January 2022. It alleged that Star India gave Kerala Communicators Cable Ltd special discounts that exceeded the 35 percent cap set under TRAI's 2017 Regulations. It said the discounts were extended through marketing agreements that allowed KCCL to offer Star channels at significantly lower rates.

Asianet alleged denial of market access and loss of subscribers. The CCI reviewed the information and formed a prima facie view that an investigation was warranted. It directed the Director General to carry it out.

Jiostar India argued that the CCI lacked jurisdiction. It said pricing, discounts and commercial arrangements fall under the TRAI framework and must first be addressed by TRAI. It relied on the Supreme Court's ruling in CCI v. Bharti Airtel(2019). It said the CCI had acted prematurely and without hearing. Asianet responded that it had complained of anti competitive conduct rather than regulatory violations.

It noted that no complaint was pending before TRAI. The CCI submitted that a Section 26(1) order is administrative and does not require a pre decisional hearing. It also submitted that the Competition Act and the TRAI Act deal with different kinds of questions and may operate together.

The court held that the allegations fell within the CCI's jurisdiction because they concerned discriminatory conduct and restrictive commercial agreements. It noted that the TRAI Regulations of 2017 did not regulate the marketing agreements in question.

It observed that “The allegations raised by ADNPL are not pertaining to non-compliance of the license conditions or violations of regulations framed by TRAI simpliciter, but go much beyond, for dealing with, CCI is equally competent to investigate and inquire"

It also accepted that allegations of anti competitive conduct justify the CCI's role. It stated that,"When allegations pertaining to anti-competitive practices are involved, CCI becomes the 'sectoral regulator' and has independent authority to examine the allegations; get the investigation done through the DG and pass orders after hearing all concerned, post receipt of the investigation report."

Emphasising the Competition Act's overriding effect, It said that " there are no specifically worded provisions dealing with anti competitive practices and their remedies" under the TRAI Act

The court rejected the challenge to the investigation. It accepted the finding that such a direction is administrative and imposes no civil consequences.

The appeal was dismissed. The court directed the CCI to complete the process arising from the Director General's report within eight weeks and issue a reasoned order after hearing all stakeholders.