The Supreme Court today ordered status quo on the Competition Commission of India (CCI) probe against Uber for predatory pricing allegations by Meru Cabs. A bench of Justices Dipak Misra and D Y Chandrachud also sought responses from CCI and Meru Cabs on the matter. Uber has challenged the order of the appellate tribunal passed last year directing Director General of CCI to investigate the allegations of predatory pricing alleged by Meru Cabs.
Senior advocate Harish Salve said that the appellate tribunal has not formed any prima facie opinion and despite that, the investigation was ordered. The bench posted the matter for further hearing on February 17. The Competition Appellate Tribunal (Compat) had on December 7 last year ordered fair trade watchdog CCI to probe afresh the alleged abuse of dominance by the popular tax-hailing app operator.
The direction came after Meru Travels Solutions approached the tribunal against CCI’s earlier decision against ordering an investigation into allegations against Uber of unfair practices including predatory pricing. The tribunal had directed CCI’s probe unit Director General (DG) to conduct a fresh probe into the allegations of abuse of dominance and anti-competitive practices by Uber.
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“The size of discounts and incentives shows there are either phenomenal efficiency improvements which are replacing existing business models with the new business models or there could be an anti-competitive stance to it,” the order had said. “In our view, there is a good enough reason for the Director General to investigate this matter. It will also help in settling an issue which has agitated business discourse for quite some time,” the tribunal had added.
It also asked CCI to pass appropriate order, on receipt of the investigation report, after giving opportunity to all parties to file their replies or objections and affording them opportunity of personal hearing. Taxi-hailing apps like Uber and radio taxi service providers such as Meru are locked in a stiff competition across the country. Earlier too, there have been allegations and counter-allegations by the two sides.
As per the complaint, Uber allegedly resorted to many abusive practices with the sole intent to establish its monopoly and eliminate otherwise equally efficient competitors from the market by way of discounts and incentives. It was alleged that Uber is spending about USD 885 million to generate a revenue of USD 415 million.
The CCI in February last year had rejected Meru’s complaint, saying inability of the existing players to match the innovative technology of any player or the model created for operating in a particular industry cannot be said to be creating entry barriers in itself.