 the OPs and said that Section 4 of the Competition Act only contemplates dominant position by one enterprise. Citing their earlier decision in a radio taxi matter, the CCI said that the understanding taken by the Informants from Section 27(b) of the Act, which is a penal provision and uses the phrase “persons or enterprises which are parties to such agreements”, is only in context to the parties who have entered into an anti-competitive agreement. It does not contemplate a situation where multiple participants are having dominant position in a relevant market.
VI. Common Ownership – An Anti-trust Risk?
Alternatively, for assessment under section 4, the Informants also alleged dominance by virtue of the OPs being part of the same group within Section 5 of the Act. This was alleged because Ola and Uber have several common investors, viz. Tiger Global Management LLC, DidiChuxing and SoftBank.[9] Since Ola and Uber hold a combined market share of ninety percent, the position is aggravated because common ownership due to the existence of common investors holding substantial shares in the OPs and the presence of nominee directors on their respective boards.[10]
The OPs countered this contention on the ground that cross-shareholding is not unusual as investors seek to reduce risk by spreading their investment across multiple companies in the same sector. It was also contended that the test for “control” under Explanation (b)(i) to Section 5 of the Act is not met and hence, Uber and Ola are not part of the same group. It was further argued that the investment by SoftBank in Ola and Uber is not covered by the provisions of Section 3 because neither SoftBank competes with Uber or Ola, nor do they provide goods or services at different levels of production or supply chain.
The anti-trust concern that arises from such common ownership is a reduction in incentive to compete due to overlapping ownership interests, compared to a situation in which competing firms are controlled by separate sets of investors. For instance, it may incentivize unilateral price increases, which although unprofitable for a firm, would be beneficial for its investors if they also hold shares in its competitor. Essentially, it facilitates collusion.
In spite of the existence of these anti-trust risks, the CCI refused to further inquire into this contention. The rationale being that the theory of harm, i.e. the existence of such common investors results in reduction of competition, is not applicable as currently there are no precedents of such collusion and also because empirical research has not conclusively proved any competitive risk arising from common ownership. Particularly, the CCI dismissed this allegation as the Informants had not submitted any evidence whatsoever to show collusion.
The CCI very cautiously reasoned that the competition is more intense in double sided markets, such as radio taxis, due to the drive to develop a strong network. Therefore, the CCI refused to act merely because of the existence of potential harm as an investigation under the act is triggered only by prima facie establishment of a contravention of section 3 or section 4.
On the international plane, the European Commission had dealt with this issue in the Dow-DuPont merger.[11] It noted that such common ownership does tend to negatively affect benefits of innovation competition for firms subject to such ownership. However, since the market dynamics of risks arising from common ownership are at a nascent stage, the CCI judiciously balanced the need to protect healthy competition and the need to reduce anti-trust risk.
CCI cautioned that it would actively monitor whether safeguards are in place to ensure that competition is not compromised by the common investments and concluded with a warning that it would not hesitate to take action should any concerns arise from common ownership. By bringing this area under the scanner the CCI has majorly offset any instances of collusion resulting from such common ownership.
[1] 4th year student, B.A. LL.B. (Hons.), National Law University, Jodhpur (Rajasthan)
[2] 4th year student, B.A. LL.B. (Hons.), National Law University, Jodhpur (Rajasthan)
[3] CCI-Case No. 25, 26, 27 & 28 of 2017 Meru Travel Solutions Pvt. Ltd. Vs. M/s ANI Technologies Pvt. Ltd. & Others
[4] For instance see: CCI Order Settles The Prolonged Ola Controversy: An Analysis ()
[5] Defined under Section 2(b) of the Act.
[6] CCI-Case No. 6 & 74 of 2015 Fast Track Call Cab Pvt. Ltd. vs. ANI Technologies Pvt. Ltd. and Meru Travel Solutions Pvt. Ltd. vs. ANI Technologies Pvt. Ltd. ( available at:); CCI-Case No. 81 of 2015 Meru Travel Solutions Private Limited (MTSPL) vs. Uber India Systems Pvt. Ltd. (available at:);
CCI-Case No. 82 of 2015 M/s Mega Cabs Pvt. Ltd. Vs. M/s ANI Technologies Pvt. Ltd. (available at:); CCI-Case No. 21 of 2016 Mr. Vilakshan Kumar Yadav & Others Vs M/s ANI Technologies Private Limited (available at:)
[7] For Kolkata it was defined as ‘services offered by radio taxis and yellow taxis’.
[8] CT-2010-010 The Commissioner of Competition v. Visa Canada Corporation and MasterCard International Incorporated et al. (available at:)
[9] Softbank has recently bought 12-20% stake in Uber.
[10] ‘Common ownership’ is described as a situation where large institutional shareholders such as investment funds, foreign wealth funds, pension funds, etc., hold minority stakes in a large number of companies that are active in the same industry and compete with each other.
[11] Case M.7932 Dow/DuPont (27 March 2017) (available at:)While studying by correspondence, I cling to every opportunity to earn extra money, and so that I don't have problems with my studies, I use this online site https://freepaperwriter.com/ that does any kind of written work.So muoli for the in rosj' side; but. This exercise will stimulate new experiments to validate the error-process models.ind thus will lead to increased experimental understanding of process errors 100 as well.
That effort is particularly noteworthy because it is our understanding lax that they will share their data with us promptly, and it also comes at a time when we all collectively recognize that our nation needs enhanced sequencing capacity so that we can all reap the benefits of the human genome project in terms of public health Some of the basic research that the Human Genome Program has nurtured, both at The Institute of Genomic Research and elsewhere, laid the foundation for the sequencing approach that's been proposed by the private sector venture.
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