TRAI And CCI Are Sectoral Regulators With Defined Jurisdictions, Any Overlap Will Not Oust Jurisdiction Of Either: Kerala High Court

The Kerala High Court recently passed a judgment clarifying the scope and jurisdiction of the Competition Commission of India (CCI) and the Telecom Regulatory Authority of India (TRAI).Justice D.K. Singh in his 142 page judgment laid down the position of law while hearing Writ Petitions stating an alleged 'conflict' of jurisdiction between the two regulatory bodies. The court observed that CCI is a sectoral regulator, so far as it relates to the curbing of anticompetitive practices in India is concerned. It further said that TRAI is also a sectoral regulator which is tasked with protecting interests of service providers and consumers of the telecom sector, to ensure technical compatibility and effective interrelationship between different service providers and to ensure compliance with license conditions by all the service providers.It, thus, said that both the authorities are sectoral/special regulators which operate in different and distinct fields, and some overlapping of the jurisdiction will not oust the jurisdiction of one sectoral regulator at the expense of the other.BackgroundAsianet Digital Network Pvt. Ltd. (ADNPL – a wholly owned subsidiary of the petitioner, Asianet Satellite Communications) and Kerala Communicators Cable Ltd. (KCCL) are competitor MSOs (Muti-System Operator) that have both entered into agreements with Star India Pvt. Ltd. (SIPL) to receive broadcasting signals from SIPL for monetary consideration and to distribute the channels of SIPL to its customers.ADNPL, alleging abuse of dominant position by SIPL in violation of S. 4(2)(a)(ii) and 4(2)(c) of the Competition Act, 2002, submitted information to the Competition Commission of India (CCI). As per the information, SIPL was offering discriminatory discounts to KCCL in violation of TRAI Regulations, denying market access to ADNPL, and providing unfair advantage to KCCL.Section 4 pertains to what would constitute dominant position. Section 4(2)(a)(ii) states that dominant position is abused where an enterprise or a group directly or indirectly, imposes unfair or discriminatory price in purchase or sale (including predatory price) of goods or service. The explanation states that purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such [condition or price] which may be adopted to meet the competition. Section 4(2)(c) states that dominant position would be abused if an enterprise or group indulges in practice or practices resulting in denial of market access [in any manner].It was also alleged that SIPL was in violation of Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (Interconnection Regulations) and Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017. These, collectively referred to as the New Regulatory Framework, mandate that broadcasters are to treat distributors non-discriminatorily and offer discounts on fair and transparent terms to ensure a level playing field. According to ADNPL, SIPL, in violation of the maximum discount of 35% (split as 15% towards discount and 20% towards distribution fee) allowed by the new regulatory framework, offered discount of up to 50% to KCCL. Thereby, ADNPL was forced to increase the price of its channels higher than those of KCCL. This resulted in loss of consumers to the former and corresponding gain to the latter.In the information, it was stated that SIPL and KCCL entered into sham agreements purporting to advertise the petitioner's channel 'Asianet' on KCCL's Test channel. This Test channel, it was alleged, has no real viewership as it merely shows only these advertisements full time. The aforesaid actions of SIPL were alleged to be violations under the Competition Act.Among the reliefs prayed for before the CCI, ADNPL had also requested for investigation by the Director General (DG). The CCI considered the materials on record and the information provided and found that KCCL was getting 70% discount, much above the regulatory cap of 35%. Thus, it was of the opinion that there exists a prima facie case, warranting investigation by the DG. Hence, a direction to investigate was given to the DG.Multiple writ petitions were filed before the Bombay High Court by the parties challenging the aforesaid order of the CCI. However, the writ petitions were disposed of by the Bombay High Court noting that no part of the cause of action had arisen within the jurisdiction of the Court.Subsequently, the present writ petitions were filed before the Kerala High Court challenging the order of the CCI. Petitioner's argumentsThe gist of the petitioner's arguments was that the allegations in the Information pertains mainly to violation of the TRAI Regulations and therefore, ...

TRAI And CCI Are Sectoral Regulators With Defined Jurisdictions, Any Overlap Will Not Oust Jurisdiction Of Either: Kerala High Court

K. Salma Jennath

Tags