Recently, Bharti Airtel has filed an information under Section 19(1) of Competition Act, 2002. This information is pertaining to the allegation against Reliance Jio, for providing services at predatory prices, by abusing its dominant position in the market. Abuse of Dominant position is prohibited under section 4 of Competition Act, 2002.
On the other hand Reliance Jio has already filed an information, against Vodafone, Idea and Bharti Airtel, and few other telecom service providers, two months earlier. It has alleged that these Companies were violating section 3 and 4, by forming a Cartel and Abusing their respective Dominant Position. The rationale for filing such an information was, that these companies refused to provide Point of Interconnection (POI) to Reliance Jio, as many of its calls were failing.
Reliance Jio has been providing its services to its customers, for free. It has been alleged that same amounts to abuse of dominant position, as they are predatory and no other telecom service provider is providing its services for free. There is no doubt in the fact that, other Telecom companies are suffering comparative loss due to such pricing policy of the Reliance Jio.
Vodafone, Idea, Bharti Airtel, have significantly, changed and reduced prices, for the services provided by them. It can be said that so far, the profits of these companies have gone down, but the prices have become reasonable. Furter, Airtel has bought Telenor and Vodafone is about to merge with Idea, for competition against Reliance Jio.
The question which arises here are that“Does refusal to provide a POI amounts to anti-competitive practices?”, and “Does Reliance has a Dominant Position in Indian Telecommunication Market, and if yes, then has it abused it?” To answer these question, a market has to be determined in which these companies operate. After that, it is to be seen, whether there isAppreciable Adverse Effect on Competition (AAEC). Section 19 of the Competition Act, 2002 provides for various factors which are to be considered for determining the market both, ‘geographical ‘ and ‘product’, and for determining AAEC and dominant, under section 3 and 4 respectively.
As far as allegation of Reliance Jio are concerned, by not providing POI, trio may be limiting the provision of services. Reliance Jio has alleged that Cellular Operators Association of India(COAI), is acting as platform for anti-competitive carried outby trio (Vodafone, Bharti Airtel, Idea). Recently, many of the Association have been found guilty of providing platform for cartel activities. If such allegation turns out to be true, then COAI may be held responsible for violation of Section 3 of the Competition Act, 2002.
Now, coming to the issue of predatory pricing, which has been raised by the trio. It is very clear that Reliance Jio is providing its services, such as voice calling, 4G unlimited Internet Datato its customers for free. Firstly, it must be seen, whether it is having a “dominant position”in the market, to determine abuse of the same.
In India, many customers have switched to Reliance Jio, temporarily, and they have not become fully dependent on its service, as far as voice calling is concerned. On the other hand, where the Internet services are concerned, many people have availed its services, and in this market it has gained market power to an extent. Dominance of Reliance Jio, is not quite established in the voice calling market, many people do not have compatible handsets, and its network in distant areas is not available.
Answering to the main question that “Is Jio indulging in anti-competitive practices?”, they have market power to quite an extent in some major cities, but not all over India. Therefore, it may abuse its dominance to quite an extent in future, but till now they have not shown such a conduct.
As far as allegations of Reliance Jio are concerned, they have more chances of convincing, CCI, that trio might be engaging in such anti-competitive practices, and colluding against Reliance Jio. While, allegations of the trio, regarding predatory pricing has less chance of convicing CCI of such alleged conduct.
ABOUT THE AUTHOR
Dhruv Chandora is currently pursuing 4th year of BA LLB (Hons) course at Rajiv Gandhi National University of Law, Punjab. A voracious reader and a keen learner, Dhruv is also a moot court enthusiast.