Lok Sabha Question No. 4296 (UNSTARRED), answered on 2021-03-22
Subject: Investigation by CCI
Ministry: CORPORATE AFFAIRS
Asked by: Manish Tewari

## 4296. MANISH TEWARI:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) whether the Competition Commission of India has decided to conduct an investigation/ market study into the monopolistic practices of market dominance  in the telecom, pharmaceuticals and the digital market sectors of the economy and if so, the details thereof;
- (b) the number of such studies conducted into various sectors of the economy by the CCI since it's inception and th e action that has been taken to prevent monopolies in the economy as a consequence of these studies;
- (c) whether the current studies being commissioned are based on complaints received with regard  to  monopolies  and  abuse  of  dominance  in  the  telecom,  pharmaceuticals  and  digital marketing sectors respectively and if so, the details thereof;
- (d) the reaction of the CCI on the award of six airports to the Adani Group of companies and it  acquiring  a  controlling  stake  in  the  Mumbai  and  Navi  Mumbai  Airport  and  whether  this tantamounts to creation of monopolies in the aviation sector; and
- (e) if so, whether the CCI proposes to conduct suo-moto investigation into it and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE        (SHRI ANURAG SINGH THAKUR) AND CORPORATE AFFAIRS

वित् त एिं कारपोरेट कार्य मंत्रालर् में राज्

र् मंत्री

(

श्री अनुराग स ंह ठाक ु र )

(a) to (c): The  Market  Study  on  E-commerce  in  India  was  initiated  by  the  Competition Commission of India (CCI) in April 2019 with a view to better understand the functioning of ecommerce in India and its implications for markets and competition.  The objective was also to identify  impediments to competition, if any, emerging from e-commerce and to ascertain the Commission's  enforcement  and  advocacy  priorities  in  this  regard.  The  market  study  was  a combination of secondary research, questionnaire survey, focused group discussions, one-onone meetings and a multi-stakeholder workshop.  The study covered three verticals in the ecommerce space, namely online retail shopping, online hotel booking and online food delivery. The final report of the e-commerce study was released on 8th January, 2020.

The 'Market Study on the Telecom Sector in India' was initiated in January 2020.  The objective was to better understand the unfolding competition dynamics in the sector, and to identify impediments  to  competition,  if any.  Interactions  with  stakeholders,  including  telecom operators, OTT, equipment manufacturers, content companies, academicians, sector experts, business associations and government bodies formed a core part of the study.  An online survey was also designed to capture changing consumer preferences for telecom services in India. The final report of the telecom market study was released in January, 2021.

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 4296 ANSWERED ON MONDAY, THE 22 ND  MARCH, 2021 [CHAITRA 1, 1943 (SAKA)]

## INVESTIGATION BY CCI

## QUESTION

The  'Market  study  on  Pharmaceutical  Sector'  was  launched  in October  2020 and  is  a combination of secondary research and stakeholder/expert consultation.  It intends to focus on the distribution segment of the pharmaceutical market in India with a view to understand: (i) discounts/margin policies at wholesale and retail levels of the distribution system; (ii) the role of  trade  associations  vis-à-vis  various  aspects  of  the  distribution  business;  (iii)  regulatory rationalization of trade margins and its impact on price and competition; and (iv) the impact of e-commerce on price and competition.  Other  additional  points  of  research  are  the  Branded Generics  and  their  impact  on  competition.  The  stakeholders  being  reached  out  to  include pharmaceutical  companies,  stockists,  chemists,  trade  associations,  online  pharmacies, doctors, sector experts and regulators.

Since the inception of the Commission in 2003-04, approx.  28 studies have been undertaken so far by CCI in various sectors and industries.  26 (twenty-six) have been completed and 02 (two) are ongoing.

The mandate of the Competition Act, 2002 is not to prevent monopolies but to prevent abuse of dominance so that competition does not get inhibited in the market.  The e-commerce study pointed out an imbalance in bargaining power and information asymmetry between e-commerce platforms and the business users of these platforms.  Therefore, certain areas were enumerated for  self-regulation  by  the  platforms.   These  have  been  advocated  with  a  view  to  reduce information asymmetry, improve transparency and promote competition on the merits.

The telecom study and the e-commerce study were prompted by rapidly changing competition landscapes owing to technological advancements and digitisation of markets. The Pharmaceutical  study  was  launched  in  view  of  the  observable  demand  side  issues  that characterise the sector, such as lack of effective consumer choice and also given that the Commission  has  received  multiple  cases  pertaining  to  the  distribution  segment  of  the pharmaceutical sector.

(d): In regard to acquiring of controlling stake, Commission received notice in relation to acquisition of GVK Airport Developers Limited (' GVKADL ') by Adani Airport Holdings Limited (' Acquirer ') under the Green Channel route.

In relation to the acquisition of sole control of GVKADL by Adani Airports Holdings Limited, the Acquirer operates in the airport services sector in India but at a different geographical location than  GVKADL.  GVKADL  is  primarily  engaged  in  the  business  of  developing  infrastructure facilities  and  holding  investments  directly  and  indirectly  in  companies  engaged  in  the development and operation of the Chhatrapati Shivaji Maharaj International Airport ('CSMIA') through its stepdown subsidiary, i.e., Mumbai International Airport Limited ('MIAL') and the Navi Mumbai International Airport ('NMIA') (where the airport is currently in the design and construction phase), through a subsidiary of MIAL.

Parties submitted in the Notice that the Adani group does not provide any products/services in CSMIA or the NMIA, nor does GVKADL provide any services in Mundra, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati or Thiruvananthapuram airports. Hence, there is no overlap in the relevant  geographic  market(s).    Further,  there  are  no  vertical  or  complementary  linkages between the activities of the Adani group and GVKADL in India. Accordingly, Parties submitted that  since  they  operate  in  completely  different  geographic  locations  it  is  unlikely  that  the proposed combination will give rise to any appreciable adverse effect on competition in India. The  controlling  stake  acquisition  was  thus  approved  by  the  Commission  under  the  Green Channel route.

- (e): In view of reply to (d) above, question does not arise.

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