Competition Commission of India v. Bharti Airtel Ltd., (2019) 2 SCC 521

The governing decision on the relationship between the Commission and a sectoral regulator. Incumbent telecom operators were alleged to have denied points of interconnection to a new entrant, acting in concert through their industry association. The Commission directed an investigation; the High Court quashed it; the Supreme Court held that the Telecom Regulatory Authority of India must first determine the jurisdictional facts lying within its domain, and that only thereafter does the Commission come into the picture. The jurisdiction of the Commission is not ousted; it is postponed.

1. The Facts

A new entrant in telecommunications complained that the incumbent operators had failed to provide adequate points of interconnection, so that a very large proportion of calls from its network failed, and that they had acted in concert through the Cellular Operators Association of India. Information was filed before the Commission alleging contraventions of Sections 3 and 4. The Commission formed a prima facie opinion and directed investigation under Section 26(1). The incumbents challenged that direction, and the High Court quashed it on the ground that the subject matter fell within the regulatory framework administered by the Telecom Regulatory Authority.

2. The Decision

1. Jurisdictional facts. Whether the incumbents had failed to provide interconnection as required, whether the licence conditions and the interconnection regulations had been breached, and what the technical obligations were, are questions assigned by the telecommunications statute to the sectoral regulator. They involve the construction of licence conditions and regulations and call for technical expertise the Commission does not possess.
2. Sequence, not exclusion. Those questions must be determined by the sectoral regulator first. Only when that exercise is complete, and if the findings disclose anti-competitive conduct such as concerted action among the incumbents, does the Commission come into the picture and exercise its jurisdiction under the Competition Act.
3. The Commission's jurisdiction survives. The Court was careful to say that the jurisdiction is not taken away. The Commission's function, which is to examine whether there was an agreement or an abuse and what effect it had on competition, is not one the sectoral regulator performs, and no regulator can pass orders under Sections 27 and 28.
4. The statutory basis. The conclusion is consistent with Section 62, which provides that the Act is in addition to and not in derogation of other laws, and with Sections 21 and 21A, which provide for references between the Commission and a statutory authority where a question arises within the other's domain.

3. What the Decision Does Not Decide

• It does not make the sectoral regulator's findings binding on the Commission on the competition question, which remains for the Commission to decide on its own material.
• It does not apply where the conduct is compelled by the regulator. In that situation the enterprise exercised no autonomy, so there is no contravention at all, and the remedy is advocacy under Section 49 rather than enforcement.
• It does not create a general rule of deference. Where a sector has a regulator but the complaint raises no question within its domain, the Commission proceeds in the ordinary way.

4. The Wider Significance

Almost every network industry in India has a regulator, and almost every competition complaint in such a sector attracts a jurisdictional objection. This decision supplies the answer, and it is invoked in telecommunications, electricity, petroleum, insurance, banking, securities and broadcasting. It also shapes practice: an informant in a regulated sector must be ready to show that the competition complaint stands independently of any question the regulator would have to decide, and an enterprise resisting an investigation will argue the opposite.

5. Related Topics and Provisions