Competition Commission of India v. Fast Way Transmission (P) Ltd.

The Supreme Court's decision of 24 January 2018 settles the width of Section 4(2)(c). A group of multi system operators dominant in cable television services in Punjab and Chandigarh terminated the channel placement agreement of a news broadcaster in the middle of its term. The Commission held this to be a denial of market access; the appellate tribunal set the order aside on the ground that market access can only be denied to a competitor; the Supreme Court restored the Commission's order, holding that the clause is not confined to competitors and that the words in any manner are to be given their full width.

1. The Facts

The informant, a broadcaster running a news and current affairs channel, had entered into a channel placement agreement with multi system operators forming part of the Fast Way group for a period of one year. Before the term expired the operators served notice terminating the agreement and stopped carrying the channel. The broadcaster complained that the group, being dominant among multi system operators in Punjab and Chandigarh, had abused that position by cutting off the only practicable route by which its channel could reach viewers in that territory.

2. The Commission's Order

1. The group. The opposite parties were held to be inter-related and to constitute a group within the meaning of the Act, so that their conduct was assessed collectively.
2. The relevant market. The provision of cable television services in Punjab and Chandigarh.
3. Dominance. Established in that market on the Section 19(4) factors, the group carrying the overwhelming share of subscribers.
4. The abuse. Termination of the placement agreement mid-term, without adequate cause, amounted to denial of market access under Section 4(2)(c), because a broadcaster excluded from the operators' networks had no other practicable means of reaching viewers in the territory.
5. The penalty. A little over eight crore forty lakh rupees was imposed on the group.

3. The Appellate Tribunal's Reasoning

The Competition Appellate Tribunal set the order aside on 2 May 2014. Its reasoning was that Section 4(2)(c) exists to secure a level playing field among competitors, so that a denial of market access can only be occasioned to a competitor. A broadcaster and a multi system operator are at different levels of the distribution chain and do not compete with each other, and on that view the clause could not be engaged at all.

4. The Supreme Court's Decision

• The clause is not confined to competitors. Nothing in the language of Section 4(2)(c) limits it to conduct directed at a rival of the dominant enterprise. The provision speaks of practices resulting in denial of market access in any manner, and the words in any manner are deliberately wide.
• The victim may be at a different level of the chain. A supplier or a customer excluded from the market by a dominant intermediary suffers precisely the harm the clause addresses, and the fact that it does not compete with the dominant enterprise is immaterial.
• The duty of the Commission. Reading the preamble with Sections 18 and 19, the Court accepted that the Commission has a positive duty to eliminate practices having an adverse effect on competition, which supports a construction giving the clause its natural width.
• The result. The appellate tribunal's decision was set aside and the Commission's order restored.

5. Related Topics and Provisions