Reliance Jio complaint: Big relief for Airtel, Voda, Idea over accusation of cartelisation

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New Delhi | Published: September 22, 2017 6:20:30 AM

The CCI’s move to investigate a fight between two sets of telecom operators was the first by the competition regulator since thus far it was the Telecom Regulatory Authority of India (Trai) and Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that decided on telecom cases.

In a major relief for incumbent operators like Bharti Airtel, Vodafone India and Idea Cellular, the Bombay High Court on Thursday quashed the order of the Competition Commission of India (CCI) to conduct a detailed investigation into the charges of cartelisation raised by Reliance Jio against them. (Reuters)

In a major relief for incumbent operators like Bharti Airtel, Vodafone India and Idea Cellular, the Bombay High Court on Thursday quashed the order of the Competition Commission of India (CCI) to conduct a detailed investigation into the charges of cartelisation raised by Reliance Jio against them. “The Bombay High Court has quashed the order passed by CCI under Section 26 (1) of the Competition Act and all the notices issued pursuant to the order by director general CCI,” the Cellular Operators Association of India’s counsel Harsh Kaushik told FE. The CCI had in May admitted a petition by Jio which had approached it in November last year alleging that the incumbents are abusing their dominant market power by forming a cartel of sorts and denying it the requisite number of points of interconnect (PoI), which it said was inconveniencing its customers. The CCI’s move to investigate a fight between two sets of telecom operators was the first by the competition regulator since thus far it was the Telecom Regulatory Authority of India (Trai) and Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that decided on telecom cases.

Welcoming the Bombay HC order, COAI director general Rajan S Mathews said that the court has vindicated the stand of the operators and the industry body. “All along we were saying that there was no cause of action and that there was no prima facie case against us. There was a dissent by two members of the CCI on this. That tells you that there was no consistent thinking in terms of the allegations and the underlying rationale and validity of the accusations,” he added. Though a detailed order copy is still awaited, a lawyer told FE that the court held that the issue involved in the matter is to be determined by the expert adjudicatory body, that is the TDSAT. In fact, the CCI order to conduct a cartelisation probe against the three incumbent operators and their industry association, COAI, was not a unanimous one. Two out of six members had presented a dissent note.

Members Sudhir Mittal and justice GP Mittal in their dissent note had blamed Jio for violating regulatory norms by creating a huge subscriber base before the commercial launch, giving wrong estimates of its subscriber base and average call duration, which were responsible for congestion of its network. The two members had also clearly stated that it is not the job of the CCI to be concerned with sufficiency of PoIs as these are to be dealt with by Telecom Commission/Trai/Department of Telecommunications/TDSAT. “The fact remains that there is no material from which the commission at this stage can hold even prima facie that the incumbent telecom operators (ITOs) acted in concert to impede the entry of Jio in the market and to limit supply, technical development and provision of services in the market,” the two had said in their dissent note. While CCI had admitted the petition of Jio against cartelisation by the incumbents and ordered a probe, it had dismissed a petition by Bharti Airtel alleging that Jio had indulged in predatory pricing and anti-competitive behaviour.

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