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This piece has been authored by Venkatesh Agarwal and Pulkit Agarwal, fourth year students of BBA.LL.B at School of Law, UPES, Dehradun.
INTRODUCTION
A two-judge bench of The Supreme Court of India (‘SC’), on 5th December, 2018 resolved the conflict of jurisdiction between Competition Commission of India (‘CCI’) and Telecom Regulatory Authority of India (‘TRAI’) and the interplay of roles of the two regulators[1]. CCI is a sector-agnostic regulator authorised to “promote and sustain competition in markets of India”[2]. Whereas, TRAI is sector specific regulator delegated to “promote and ensure orderly growth of telecom sector”[3]. The legislative intent behind both the legislations is to ensure fair-competition in the market of India. Though both the regulators have a common goal, they differ in their inquiry procedure and mandates.
BACKGROUND
Reliance Jio Infocomm Limited filed an application under Section 19(1) of the Competition Act, 2002 which states that the commission may inquire into certain agreements and dominant position of enterprise[4], alleging abuse of dominant position and cartelization by Bharti Airtel, Idea Cellular Limited, Vodafone India Limited (collectively, the ‘IDOs’) and the Cellular Operators Association of India for the violation of section 3 & section 4 of the Act, which states that there should not be any agreement which is likely to cause appreciable adverse effect on the competition within India[5] & another which states that no enterprise or group shall abuse its dominant position[6] respctively. Jio alleged that the cartel restricted it to enter into the telecom market by denying the sufficient number of Point of Interconnection (‘PoI’) to it. Further, Jio filed an application before TRAI to look into the conduct of IDO and the COAI.
CCI’s Order on the above application was challenged before The Bombay High Court (‘The High Court’). The High Court on 21st September, 2017 set aside CCI’s Order and held that the CCI had no jurisdiction in the matters of telecom sector as in the instant case the matter was also referred to TRAI the telecom sector regulator. Further, The High Court held that the TRAI a sector specific regulator and it is technically well equipped to deal with the said issues in the telecom sector. Furthermore, the prima facie Order passed by the CCI was not an administrative order and therefore the CCI should have waited for the final decision of the TRAI before passing a prima facie Order against the anti-competitive practices. CCI and Jio aggrieved by the impugned Order of The High Court challenged it before The SC by way of special leave petition.
SUPREME COURT'S RULING
The SC did not grant leave to petitioners and upheld the decision of The High Court. The SC recognized that the TRAI is sector specific regulator and has expertise to deal with the issues in the telecom sector, which arise from the Telecom Regulatory Authority of India Act, 1997. Further, the TRAI is empowered to look into the jurisdictional issue first and then if there are evidences to prove that the anti-competitive practice exists, the jurisdiction of the CCI can be enforced according to the relevant provisions of the Competition Act. Also if the TRAI takes an action against the anti-competitive practice of the parties, the decision would be limited to the applicability of the Telecom Regulatory Authority of India Act, 1997.
The SC further held that the CCI is delegated with an important role to curb anti-competitive practices in the relevant markets of India and this responsibility delegated to CCI should not be washed away completely and “the ‘comity’ between the CCI and TRAI is to be maintained”. Therefore, the jurisdiction of the CCI is not outset completely with regard to telecom sector but the CCIs jurisdiction is pushed out to the later phase, once the issue is decided by the TRAI.
CCI & OTHER REGULATORY BODIES
The case is not just with TRAI, other sectors like oil & natural gas sectors which is regulated by Petroleum and Natural Gas Regulatory Board (PNGRB). This particular board empowers its power from PNGRB Act, 2006[7] which gives PNGRB to levy penalty and take other measures in case of any restrictive trade practices. Restrictive trade practices have been defined as “A trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner.”[8] In this case where Reliance Industries wrote a complained to Competition commission of India against that Bharat Petroleum, Indian Oil & Hindustan Petroleum by saying that the other three have formed a cartel to supply oil fuel to Air India. These three companies then filed the case to Delhi High Court that CCI cannot intervene in the same matter and Petroleum and Natural Gas Regulatory Board will be the authority for listening to this case, the Delhi High Court then barred the jurisdiction of CCI.[9] This tug of war of different legislations & Regulatory Sectors with Competition Commission of India seems to become a tussle where the top is sliding on both the side, there is need to find the best possible solution through which all these authorities can work and cooperate together.
CONCLUSION
The tussle between the Competition Commission of India and TRAI or other sector-specific regulatory sectors has raised serious jurisdictional concerns. The Apex Court of India has addressed this concern in the case of Competition Commission of India v Bharti Airtel. [10] In the United Kingdom, the regulatory sectors and OFT i.e. Office of Fair Trading work together to take the best possible measures in this regard. The OFT and other sectoral regulators can themselves decide whether to follow the Competition Act or to go with other specific sectoral statutes.[11] In essence, they follow the cooperative approach where both the authorities sit together and find the best possible way out from the situation, however, OFT does reserve the right to have a final say in the matter. Along with the above judgement of the Hon’ble Supreme Court, if India adopted some elements of the U.K system, the tug of war between the different sectoral regulators could come to an end.
[1] C.C.I. v. Bharti Airtel. AIR 2019 SC 113.
[2] Competition Act, 2002, No. 12, Acts of Parliament, 2003, Preamble.
[3] Telecom Regulatory Authority of India Act, 1997, No. 24, Acts of Parliament, 1997.
[4] The Competition Act, 2002, No. 12, Acts of Parliament, 2003, §19.
[5] Id, §3.
[6] Id., §4.
[7] The Petroleum and Natural Gas Regulatory Board Act, 2006, No. 19, Acts Of Parliament (2006).
[8] Id. § 2(zi).
[9] Competition watchdog faces fresh challenge to jurisdiction, Live Mint, (23 Jan. 2011, 11:29 PM), https://www.livemint.com/Home-Page/aCmjQr8BRwb0W4OQj2TUUK/Competition-watchdog-faces-fresh-challenge-to-jurisdiction.html.
[10] Supra at note 1.
[11] The Competition Act 1998 (Concurrency) Regulations, 2000 (U.K.).