Tag: Competition Commission of India

CCI seeks details from Samara Capital on Amazon’s role in More’s acquisition: report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission of India (CCI) has sought details from Samara Capital on Amazon’s role in acquiring Aditya Birla Retail’s supermarket chain ‘More’ to find out if the deal is in accordance with the centre’s revised foreign direct investment (FDI) policy, The Economic Times reported, citing sources.

The sources told the paper that CCI has asked Samara Capital-owned Witzig Advisory Services if Amazon will be involved in day-to-day operations of the supermarket, its representation on the board, if More will be joined into the Amazon India marketplace and if they the deal is in compliance with the revised FDI norms.

The responses are yet to be filed to the CCI, the report said.

Besides, Witzig has filed an application to the CCI for clearance in which it said Amazon.com NV Investment Holdings LLC will acquire 49 percent in Witzig while the remaining 51 percent will be held by Samara.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Carlsberg, United Breweries plead leniency in India beer cartel probe

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Denmark’s Carlsberg and India’s United Breweries have filed pleas with Indian authorities, seeking leniency in a probe into alleged collusion to fix beer prices, five sources familiar with the matter told Reuters.

The Competition Commission of India (CCI) has been investigating the two companies, as well as the world’s largest brewer Anheuser-Busch InBev (AB InBev).

Last year, as previously reported by Reuters, AB InBev told the regulator it had discovered an industry cartel that discussed and agreed on beer prices before submitting them to Indian states, which regulate pricing.

The company’s confidential disclosure under the CCI’s whistleblower-protection scheme led to dawn raids by the regulator in October at offices of all three of the brewers.

In recent weeks, both Carlsberg and United Breweries filed pleas under the CCI’s so-called leniency programme, submitting evidence and agreeing to cooperate, the sources said, adding that such cooperation could lead to a smaller fine if wrongdoing is discovered.

A Carlsberg spokesman in India said it was “cooperating fully with the CCI” and had done so from the beginning of the probe.

United Breweries, part-owned by Heineken, did not respond to requests for comment. Following the Reuters story on the October raids, it told the Indian stock exchanges it was reviewing its legal risks and the potential implications. Heineken declined to comment.

An AB InBev spokesman in India said they take antitrust compliance “very seriously”, but declined to comment further.

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The three brewers account for 90 percent of beer consumption in the $7 billion Indian market, where rising social acceptance towards drinking and a growing pub culture are helping the industry to grow.

They collectively face an estimated fine of up to $279 million if found to have operated as a cartel. Individual executives can also be fined, though AB InBev could escape all of its share of the fines as it reported the issue.

The CCI’s leniency programme grants relief through lower penalties to subsequent applicants only if they add value to evidence already held by the regulator from its own investigation and from the initial applicant, in this case AB InBev. But the filings remain confidential and companies do not know of others’ submissions.

“It’s like playing blind, like in poker,” said one of the sources.

The CCI did not respond to questions from Reuters.

Gautam Shahi, a New Delhi-based antitrust lawyer, said subsequent leniency applications were typically filed to reduce potential penalties.

“It’s a promise of cooperation in return for a lenient treatment,” said Shahi, who is not involved in the case.

During the October raids, the CCI found e-mails that showed executives regularly discussed beer prices, potentially violating Indian anti-trust laws, a government source said at the time.

One of the sources told Reuters the CCI was still collecting evidence and reviewing the various leniency petitions but the investigation would be likely to continue for a year.

United Breweries is known for its Kingfisher brand while AB InBev’s beer brands include Budweiser, Corona and Stella Artois. Carlsberg sells beer under its own-name brand among others and also owns Tuborg.

The antitrust investigation is set to cast a shadow on the beer industry in India, which is already facing stringent compliance and state-level regulation, making it tougher for brewers to expand.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Competition Commission approves LIC’s majority stake buy in IDBI Bank

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission has cleared LIC’s proposed acquisition of up to 51 percent stake in debt-laden IDBI Bank. The deal would help the insurance behemoth to enter the banking space and would provide business synergies despite the IDBI Bank’s stressed balance sheet.

In a tweet on Tuesday, the fair trade regulator said it has approved “acquisition of up to 51 per cent equity share capital in IDBI Bank Ltd by Life Insurance Corporation of India”.

Mergers and acquisitions beyond a certain threshold require the approval of the Competition Commission of India (CCI), which keeps a tab on unfair business practices across sectors.

In August, the government gave its nod for the LIC’s proposed purchase of up to 51 per cent stake in the bank.

With the deal, the insurer would have access to around 2,000 branches of the bank through which it can sell its products. Last month, the LIC announced an open offer to buy 26 per cent stake from shareholders of the bank.

The open offer, wherein shares are to be acquired at a price of Rs 61.73 apiece, would commence from December 3.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CCI to probe alleged antitrust behaviour by Maersk, DP World at Mumbai port – sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission of India (CCI) has ordered a probe into alleged anti-competitive practices by Denmark’s AP Moller-Maersk and Dubai’s DP World at the terminals they operate at the country’s largest container port in Mumbai, five sources familiar with the matter told Reuters.

The decision by the antitrust regulator to investigate follows a complaint by Singapore’s PSA International Pte Ltd, which alleged that Maersk and DP World created entry barriers to hinder the growth of PSA’s terminal by colluding on certain charges they levy at the state-owned Jawaharlal Nehru Port Trust (JNPT).

Handling 66 million tonnes of cargo in the last fiscal year to March, JNPT is critical to India‘s international trade. The port handles more than half of India‘s traffic of shipping containers each year.

Units of Maersk, DP World and PSA operate four of the port‘s five terminals, with the fifth owned by the government. The PSA terminal, inaugurated by Prime Minister Narendra Modi in February, is planned to be the largest, expected to nearly double JNPT’s capacity and help fulfil the government’s vision of boosting India‘s economic growth by modernising its ports.

The dispute centres around so-called inter-terminal transfers.

Under the system, which aims to make the most efficient use of common infrastructure, freight trains arriving at JNPT typically carry containers destined for several terminals, but stop at just one that handles all the cargo on a given day. Other operators then collect their containers by truck for loading at their own terminals. A similar procedure is followed, in reverse, when imported containers are unloaded.

In June, PSA, which is owned by Singapore government-owned investment fund Temasek Holdings, lodged a complaint with the CCI alleging it was facing discrimination because Maersk and DP World were imposing a higher fee on shipping companies for handling containers that arrived at the PSA terminal, the sources said.

In an order passed on November 9, the CCI said its preliminary probe found that Maersk and DP World had coordinated their efforts to prevent PSA from operating effectively at the Mumbai port, said two of the sources who have direct knowledge of the case.

AP Moller-Maersk, the world‘s biggest container shipping group, told Reuters that CCI was hearing a case brought forward by PSA, but said it would not comment as the matter was sub judice.

DP World said it had not received any formal communication from the CCI, but added it has “always been committed to ensuring our business meets the highest standards, complying with all laws and regulations”.

PSA International did not respond to a request for comment. JNPT and the CCI did not respond to Reuters’ questions.

Coordinated Conduct

The CCI’s decision to order a probe and details of PSA’s allegations have not been previously reported.

“This co-ordinated conduct on the part of the opposite parties (Maersk and DP World units) prima facie hints at creating entry barriers for the informant (PSA),” the CCI said, according to one of the sources privy to the order.

The regulator asked its investigations unit to further probe the allegations and submit a report by January. The probe would also look at the role of individual company executives, the sources said. Such investigations, however, typically extend beyond a year.

JNPT, which began its operations in 1989, is ranked among the world‘s top 50 container ports. It plays a key role in Modi’s plan to develop India‘s coastline and maritime sector.

In its complaint, parts of which were reviewed by Reuters, PSA alleged that Maersk and DP World had issued advisories to deter use of the PSA terminal, telling port users they would need to make their own arrangements to transfer their cargo if it was dropped at the PSA dock.

One of the sources who is privy to the Indian watchdog’s order said the CCI found the coordinated conduct by Maersk and DP World had the potential to bring about an anti-competitive effect.

Another source privy to the proceedings, though, disagreed, saying the dispute was only a commercial one and not a competition law matter as alleged by PSA.

The complaint was filed by PSA’s Indian unit Bharat Mumbai Container Terminals. The opposing parties in the case are Maersk‘s unit Gateway Terminals India, and DP World‘s Nhava Sheva International Container Terminal and Nhava Sheva (India) Gateway Terminal.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Competition Commission of India rejects price fixing allegations against Ola, Uber

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Fair trade regulator CCI Tuesday rejected allegations of price fixing against app-based taxi service providers Ola and Uber, saying that drivers acceding to “algorithmically determined prices” by the platforms does not amount to collusion between them. In a 13-page order, the Competition Commission of India (CCI) also dismissed complaints that Ola and Uber are imposing a resale price maintenance system on the drivers as well as alleged price discrimination.

For the model followed by cab aggregators, estimation of fares are done by algorithms on the basis of large data sets. Apart from personalised information, various other factors such as time of the day and traffic situation, are taken into account with respect to fares.

“Resultantly, the algorithmically determined pricing for each rider and each trip tends to be different owing to the interplay of large data sets. Such pricing does not appear to be similar to the ‘hub and spoke” arrangement as understood in the traditional competition parlance,” the regulator said.

Generally, a hub and spoke arrangement requires the spokes to use a third party platform (hub) for exchange of sensitive information, including information on prices which can facilitate price fixing. For a cartel to operate as a hub and spoke, the CCI said there needs to be a conspiracy to fix prices, which requires existence of collusion in the first place.

“In the present case, the drivers may have acceded to the algorithmically determined prices by the platform (Ola/ Uber), this cannot be said to be amounting to collusion between the drivers,” it noted.

Further, the regulator said in the case of ride-sourcing and ride-sharing services, a hub-and-spoke cartel would require an agreement between all drivers to set prices through the platform or an agreement for the platform to coordinate prices between them.

“There does not appear to be any such agreement between drivers inter-se to delegate this pricing power to the platform/ cab aggregators,” the watchdog said.

The complaint was filed by an individual against ANI Technologies, which provides the app-based taxi services under ‘Ola’, Uber India Systems , the Netherlands-based Uber B V and US-based Uber Technologies, the holding company of Uber group.

Uber B V enters into contract with different taxi owners attached to Uber network and is responsible for making payment of rider services as well as incentives to drivers, as per details provided in the CCI order.

Noting that fares offered by Ola and Uber are dynamic in nature, the CCI said there does not seem to be any fixed floor price maintained by the taxi aggregators for drivers.

Under the Competition Act, resale price maintenance refers to setting of a floor price on resale.

“In case of app-based taxi services, the dynamic pricing can and does on many occasions drive the prices to levels much lower than the fares that would have been charged by independent taxi drivers.

“Thus, there does not seem to be any fixed floor price that is set and maintained by the aggregators for all drivers and the centralised pricing mechanism cannot be viewed as a vertical instrument employed to orchestrate price-fixing cartel among the drivers,” the order said.

About alleged price fixing, the CCI said existence of an agreement, understanding or arrangement that demonstrates meeting of minds, is a sine qua non for establishing a contravention under Section 3 of the Act.

In the present case neither there appears to be any such agreement or meeting of minds between the cab aggregators and their respective drivers nor between the drivers inter-se, the order said.

As a result, the watchdog said there is no contravention of Section 3, which pertains to anti-competitive agreements.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CCI probing alleged fixing of airfares, looking at algorithms used by airlines

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission is looking at algorithms used by airlines to determine fares, as part of a detailed probe into alleged fixing of air ticket prices, according to its chief Sudhir Mital.

Currently, the fair trade regulator is investigating allegations of similar pricing as well as simultaneous increase in ticket prices by the airlines. The cases pertain to steep fluctuations in airfares during the Jat agitation in Haryana and floods in Chennai, among other instances, in the last few years.

Mital, chairperson of the Competition Commission of India (CCI), said that it is currently looking into couple of cases of alleged price fixing by airlines.
“We are trying to work out the pricing pattern followed by airlines. Airlines have often stated that similarity in airfares as well as increase in prices is an outcome of demand based dynamic pricing by the softwares used by them.
“Unless and until the issue is examined and looked into in detail, we cannot say much at this stage,” Mital told PTI in an interview.

There have been instances of spike in air ticket prices during festivals and natural calamities. Earlier this year, some members in the Rajya Sabha sought a cap on airfares and the government has been maintaining that fares are deregulated.

The CCI chief said the cases being looked at involve allegations of similar pricing by airlines during the Jat agitation and floods in Chennai.

While the Jat agitation took place in early 2016, the floods occurred in 2015.
“Basically, one case being looked into is about similarity in prices of different airlines for the same route that customer often comes across while booking tickets and the other is about surge pricing, for example, how is that during Jat agitation all airlines on the same day decided to increase the prices,” Mital said.

The regulator is waiting for a report from the Director General (DG), which is its investigation arm. Generally, cases where the CCI has found prima-facie evidence of violations of competition norms are referred to the DG for a detailed probe.

“We have asked the DG to look into the algorithms used by the airlines for determining the fares to ascertain whether the airlines have coordinated to fix prices or the algorithms function on their own to determine the prices,” Mital said.

Further, he said the process starts only after the DG submits its report.
The CCI, which keeps a tab on unfair business practices across sectors, has powers to penalise entities for anti-competitive ways as well as direct them to cease and desist from indulging in such practices.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shares in United Breweries slide on Friday following antitrust raids

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares in India’s United Breweries Ltd fell as much as 3 percent on Friday, after media reports surfaced about raids as part of an ongoing investigation into price-fixing allegations.

Reuters reported on Thursday that the Competition Commission of India conducted search and seizure operations at the offices of India’s United Breweries (UB), Denmark’s Carlsberg and the world’s largest brewer Anheuser-Busch InBev (AB InBev) in at least two Indian cities.

The United Breweries stock was down 1.13 percent at 0551 GMT in an Indian market that was up nearly 2 percent on Friday.

Investors and analysts said shares in UB, which is known for its Kingfisher brand, were hit by fears that the CCI raids could result in penalties and potentially dent profits down the road.

“This is a highly regulated market and these are global players. So, allegations of price-fixing are extremely worrying for us,” said the head of a fund that owns shares in UB, who asked not to be named due to company policies.

The company did not respond to requests for comment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CCI imposes Rs 38.05 crore penalty on sugar mills for rigging bids in tender

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission of India (CCI) on Tuesday slapped a total penalty of Rs 38.05 crore on 18 sugar mills and their trade associations for rigging the bids of a joint tender floated by oil marketing companies (OMCs) namely IOCL, HPCL and BPCL on January 2, 2013.

Passing an order, the watchdog has directed the sugar mills and their trade associations “cease and desist” from anti-competitive practices.

According to the regulator, “Indian Sugar Mills Association and Ethanol Manufacturers Association of India persuaded the OMCs to come-out with a joint tender for the purpose of procuring ethanol and this agreement to procure ethanol from various suppliers in contravention of the provisions of Section 3 of the Competition Act, 2002, which was likely to cause appreciable adverse effect on competition within India in supply and distribution of ethanol.”

“It was also alleged that the sugar manufacturers who had participated in the Joint Tender of 2013 manipulated the bids by quoting similar rates and in some cases identical rates through an understanding and collective action in violation of the provisions of Section 3 of the Act,” the regulator said in a statement.

While imposing penalties, the commission applied the principle of relevant turnover and based the penalties on the revenue generated by the sugar mills from sale of ethanol only.

The penalty was imposed by the commission at 7 percent of the average relevant turnover of the sugar mills.

However, penalty at 10 percent of the average receipts was imposed upon the trade associations keeping in view the key role they played in facilitating bid rigging.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Walmart-Flipkart deal: NCLAT seeks to know the manner in which firms undertake their business

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The National Company Law Appellate Tribunal(NCLAT) on Thursday, while hearing a petition filed by The Confederation of All India Traders(CAIT) against the Competition Commission of India’s decision to approve the Flipkart-Walmart deal, sought to know “the manner in which Walmart International Holdings, Inc. and Flipkart Private Limited do their business in the relevant market in India”.

The court has asked the CCI to file its reply by September 20, while it has asked CAIT to file the relevant dates and their understanding of sales withing a week.

CAIT is opposed to US retail giant Walmart’s proposed acquisition of 77 percent stake in homegrown retailer Flipkart in a $16-billion deal.

The traders’ body, infact, said it will launch a 90-day nationwide agitation against the deal from September 15, starting from the national capital.

The association has also called for a ‘Bharat Trade Bandh’ on September 28.

(With inputs from PTI)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow