Case: Competition Commission of India Vs. M/s. Fast Way Transmission Pvt. Ltd. &amp; Others

An agreement dated 1stAugust, 2010 was entered into between respondent no.5, who was the broadcaster of a News Channel called "Day & Night News", and respondent No.1 to 4 who are Multi System Operators (hereinafter referred to as "MSOs") who carried the aforesaid channel to persons who watch Cable T.V. A channel placement agreement was entered into, on the same day, between the broadcaster and the MSOs, all of which are stated to belong to the Fast Away Group. By notices of termination dated 19thJanuary, 2011, the aforesaid agreements were terminated by relying on a clause of the said agreements which entitled them to do so on the mere giving of a thirty day notice. This being the case, respondent no.5 complained about the aforesaid termination. The Director General of Investigation looked into the complaint of the broadcaster, investigated the matter, and ultimately delivered its report to the Competition Commission, in which it found that the said MSOs indulged in practices which were violative of Sections 3 and 4 of the Competition Commission Act, 2002. Going by this report, and after hearing the parties to the dispute, the Competition Commission, by its detailed order dated 3rdJuly, 2012, first held that according to it, the relevant market to be looked at for the purpose of Sections 3 and 4 would be the State of Punjab and Chandigarh. Having regard to this market, so far as Cable TV was concerned, a finding was entered stating that the MSO group had 85% of the subscriber share in that market, and was therefore, in a dominant position which could be misused. Ultimately, it found on facts that the group had never terminated any such similar agreement before the due date except in the instant case, and also found that this could not be said to be due to low TRP ratings, inasmuch as the complainants TRP rating was almost equal to that of some other channels. The Commission then went on to find asThe evidences as above confirm that there were disruptions in the telecast of the channel. The Commission further observes that the OP has argued that as per TRAI regulations it is not bound by "must carry", as against the informant who is bound by a "must provide" provision. However, the argument of the OP group does not take away the fact that the informant is dependent on it for transmission of its channel and if it is denied that, it cannot get access to the market. It is not that the informant was not paying the placement fee charged by the OP group. There was no dispute onof placement or carriage charges. An agreement was duly executed between the informant and the OP group for transmission of the channels of the former.6.4.10 However, due to the fact that the subscriber base of the OPs is in excess of 40 lacs, every broadcaster including the informant dependent upon their network. In such a situation, the Commission observes that the OP is in position to affect the market in its favour. Due to its market power, the OP group has denied the opportunity for transmission of channel of the informant. The group has no justification for termination of the agreement and its argument for justifying its conduct is not based on any sound footings. Its argument regarding shortage of spectrum forof the informants channel in face of the fact that the spectrum constraint might have been considered at the time of entering into agreement with the informant upon charge of premium from the broadcaster. Once that was considered, the question of shortage of spectrum during the period of the agreement does not arise. Similarly, the argument of low TRP is also not justified since in past there has been no practice of review of any agreement on the basis of TRP ratings in the middle of an agreement. The Commission observes that the argument of spectrum shortage and low TRP is merely an afterthought to justify its conduct.6.4.11 The conduct of OP has resulted in loss to theas well as denial of services to the consumers who want to watch the channel of the informant. As on date the Informant has access to only 56,000 households on the cable TV in the state of Punjab & Chandigarh, where about 45 lacs households are connected on cable network. Thus, the informant has been effectively wiped out from the entire relevant market by the conduct of OPs.6.4.12 In the light of the facts and circumstances of this case the Commission observes that due to the acts of the OP group the informant has been denied the market access and opportunity to compete and holds that violation of the provisions of section 4(2) (c) of the Act gets established.The appeal by the MSOs group to the Appellate Tribunal found favour with the aforesaid Tribunal. Essentially, the Tribunals finding was that the denial of market access under Section 4(2)(c) can only be by one competitor against another, and that as a broadcaster cannot be said to compete with MSOs, there would be no violation of either Section 3 or Section 4 of the Act. On this short ground the appeal stood allowed.

Court's reasoning:
7. The Preamble of the Act, read with the aforesaid provisions, would show that the Commission set up by the Competition Act certainly has a positive role to play. A perusal of Sections18 and 19 would show that it is a positive duty of the Commission to eliminate all practices which have an adverse effect on competition. Further the Commission should promote and sustain competition, apart from protecting the interest of consumers, so as to ensure freedom of trade carried on by all participants in markets all over India. Also, a positive role is given to the Commission to inquire, suo motu, into the dominant position of enterprises, and to prohibit anti competitive agreements. Section 60 then gives the Act overriding effect over other statutes in case of a clash between the Act and such statues to effectuate the policy of the Act, keeping in view the economic development of the country as a whole.8. On the facts of the present case, it is clear that "dominant position" is clearly made out. The Explanation to Section 4 specifically refers to a position of strength that is enjoyed by an enterprise or group thereof in the relevant market, which, as is stated hereinbefore, is Punjab and Chandigarh, in the Cable TV market, which enables respondents no.to operate independently of competitive forces prevailing in the relevant market. The Commission has found, on facts, that since the aforesaid MSOs group has 85% of the subscribers share in the aforesaid cable TV market in the State of Punjab and Chandigarh, and that they are able to operate independently of competitive forces prevailing in the aforesaid market. This finding has notbeen set aside by the Appellate Tribunal. Also, the respondent would fall within Explanation (a)(ii) as well, though it is enough that it would fall withina(i) of the Explanation.(ii) refers to a position of strength as enjoyed by the respondents which enables them to affect consumers in its favour.9. Replying upon the definition in Section 2(f)(ii), ShriNarsimha, learned ASG has, in our view, correctly argued that a broadcaster would certainly fall within the wide language contained in the aforesaidWe may also add that in all fairness the learned counsel for the respondent has agreed with the same. This being the case, it is clear that as both(i) and (ii) of clause (a) of the Explanation apply, the respondent could be said to be in a "dominant position", for the purpose of Section 4, in the facts of the present case.It can be seen that in the facts of the case, the broadcaster, namely respondent No. 5, had a broadcast agreement which was entered into for a period of one year from 1stAugust, 2010. This was sought to be terminated within the aforesaid period by the respondent by notices dated 19thJanuary, 2011. The TDSAT has, by its order dated 25thApril, 2012, adverted to Regulation 4.2 of the relevant Telecom Regulations, and has found that the respondents have not followed the aforesaid regulations, inasmuch as no reasons for termination have been given in the notices of termination. This being the case, it is clear that, on the present facts, there is an abuse of the dominant position enjoyed by the respondentsHaving said this, however, we are of the view that no penalty ought to have been imposed on the facts of the present case. The finding of the Competition Commission that TRP rating of the broadcaster was not so low as it was almost equal to that of other channels, is not correct.A perusal of the aforesaid chart would show that the GRP given to the news channel `Day and Night is much lower than that given to any other channel, and that learned senior counsel for the respondent was correct in stating that this was the reason for terminating the agreement with the broadcaster inThough we find that, on the facts of this case, Section 4(2)(c) has been breached, yet the reason given by respondents 1 to 4 for termination being otherwise justifiable, we feel that no penalty should be levied on the facts of the present case.