The Competition Commission of India (CCI), on Wednesday, imposed a penalty of Rs. 52.24 crore on the Board of Control for Cricket in India (BCCI) for abusing its dominant position.
The CCI found that the BCCI had violated Section 4(1) read with Section 4(2)(c) (abusing domination position by denying market access) of the Competition Act, 2002 by assuring broadcasters of Indian Premier League (IPL) that BCCI shall not organize, sanction, recognize, or support another professional domestic Indian T20 competition that is competitive to IPL, for a sustained period of ten years.
The order was issued by Chairperson Mr. Devender Kumar Sikri, and members Mr. S. L. Bunker, Mr. U. C. Nahta and Mr. G. P. Mittal.
At the outset, the CCI rejected BCCI's claim that it was not an "enterprise" within the meaning of Section 2(h) of the Act. It then found that the BCCI is dominant in the market for organization of private professional cricket leagues/events in India. It opined that the "historical evolution" of BCCI enabled it to attain a monopoly status in the organization of cricket events in India.
The Commission then went on to note that the BCCI had failed to provide any explanation as to how the impugned clause is connected to the interest of cricket, and observed, "While the restriction may serve the interest of the media company by helping it recoup investments, BCCI has not been able to show how the impugned restriction serves the legitimate interest of cricket in the country and the consumers in the relevant market. This explanation by BCCI is not acceptable as the restriction helps BCCI to ensure monopoly for itself in the relevant market for organization of domestic professional cricket leagues. In fact, the clause clearly reflects the intent of BCCI to foreclose competition."
It also rejected the contention that the clause was inserted at the behest of the bidders, observing, "The Commission notes that the responsibility cast upon dominant enterprises under Section 4(1) of the Act does not get diluted on the pretext of the abuse being pursued at the behest of the consumers or other stakeholders."
Thereafter, ruling that the impugned clause created an "insurmountable entry barrier in the relevant market", the CCI directed:
"(a) BCCI shall cease and desist from indulging into the aforesaid conduct, which is found to be in contravention of the provisions of Section 4(2)(c) read with Section 4(1) of the Act;
(b) BCCI shall not place blanket restriction on organization of professional domestic cricket league/ events by non-members. This shall, however, not preclude BCCI from stipulating conditions while framing/ modifying relevant rules for approval or while granting specific approvals, that are necessary to serve the interest of the sport. Such changes shall entail norms that underpin principles of nondiscrimination and shall be applied in a fair, transparent and equitable manner;
(c) Having done the above, BCCI shall issue appropriate clarification regarding the rules applicable for organization of professional domestic cricket leagues/ events in India, either by members of BCCI or by third parties, as well as the parameters based on which applications can be made and would be considered. Besides, BCCI shall take all possible measure(s) to ensure that competition is not impeded while preserving the objective of development of cricket in the country ; and
(d) BCCI shall file a report to the Commission on the compliance of the aforesaid directions from (a) to (c) within a period of 60 days from the receipt of this order."