Mandatory Use of Government e-Marketplace (GeM) and Competition Law

40.The notion of enterprise is a relative one. The functional approach and the corresponding focus on the activity, rather than the form of the entity may result in an entity being considered an enterprise when it engages in some activities, but not when it engages in others. The relativity of the concept is most evident when considering activities carried out by non-profit-making organisations or public bodies. These entities may at times operate in their charitable or public capacity but may be considered as undertakings when they engage in commercial activities. The economic nature of an activity is often apparent when the entities offer goods and services in the marketplace and when the activity could, potentially, yield profits. Thus, any entity, regardless of its form, constitutes an ‘enterprise’ within the meaning of Section 3 of the Act when it engages in economic activity. An economic activity includes any activity, whether or not

profit making, that involves economic trade.

If the term ‘enterprise’ as defined in Section 2(h) is read in conjunction with the definition of the term ‘person’ and ‘service’ it becomes clear that the legislature has designedly included Government departments in relation to any activity relating to storage, supply, distribution, acquisition or control of articles or goods, or the provision of services of any kind. The width of the definition of ‘enterprise’ becomes clear by the definition of the term ‘service’. The inclusive part of the definition of ‘service’ takes within its fold service relating to construction and repair. These two words are not confined to construction and repair of buildings only. The same would include all types of construction and repair activities including construction of roads, highways, subways, culverts and other projects etc. It is thus evident that if a department of the Government is engaged in any activity relating to construction or repair, then it will fall within the definition of the term ‘enterprise’. We may add that there is nothing in Section 2(h) and (u) from which it can be inferred that the definitions of ‘enterprise’ and ‘service’ are confined to any particular economic or commercial activity. The only exception to the definition of the term ‘enterprise’ relates to those activities which are relatable to sovereign functions of the Government and activities carried by the four departments of the Central Government, i.e., atomic energy, defence, currency and space.”

Vs.

Karnataka Film Chamber of Commerce and Ors.

 (16.02.2012 – CCI)

Held, the section under which the associations were indulged in abuse of the dominant position was Section 4(2)(c) of the Act. By boycotting the producers for different reasons they have indulged in denial of market access to the producers. Karnataka Film Chamber of Commerce did not allow to release films in more than 14 screens in the entire states. This was done only in the case of non- Kannadiga films. The restriction was imposed in order to promote the films made in the language of the State of Karnataka. Thus the association of KFCC had not only enforced unfair and discriminatory conditions in the provision of service but also had limited and restricted the provision of services in the market. Thus the provisions of Sections 4(2)(a)(i) and 4(2)(b)(i) were attracted. Though this was done to promote Kannadiga Films but this could not be done at the cost of denial of market access to other players in the market. The only way to promote Karnataka films was to produce quality films so that they were able to compete with the Hollywood and Bollywood films. There could not be a discrimination on the basis of language, cast, sex and creed. This was a constitutional guarantee and it was enshrined in the Competition Act. Therefore, the boycott of the films and limiting them only to 14 screens amounted to the denial of market access besides being discriminatory. KFCC had, therefore, contravened the provisions of Section 4(2)(a)(i) and Section 4(2)(b)(i) of the Act. Again, taking into account the small shelf life of films, a period of six months from the release date would be a reasonable period for the sale of satellite, video rights etc. A period of five years is totally unreasonable. A period of six months would take care of the interest of the producers and the exhibitors. But in any case, boycott of a film was an anti-competitive act under the provisions of Section 4(2)(c) of the Act. Similarly when some disputes arose between producers and the exhibitors and some amounts were due from the producers the association stepped in to support the exhibitor and as usual boycotted a subsequent film of the producer by not allowing its registration and release. In such cases also, the exhibitor could have filed a civil suit for recovery and the association should not have boycotted the film. This is also a violation of Section 4(2)(c) of the Act. Again, registration of films was necessary to bring some definitive in dealings and transparency. But if any other conditions were put which had no relationship with the contract or registration was violative of Section 4(2)(d) of the Act. Such supplementary obligations at the time of registration should be stopped by the association.

Vs.

Google LLC and Ors.

 (20.10.2022 – CCI)  MANU/CO/0089/2022

Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Section 4(2)(c) of the Act.

Based on the foregoing analysis, the Commission is of the view that various covenants of MADA are in the nature of imposition of unfair conditions on OEMs who have no choice but to accept the same. As already stated, Google does not negotiate on key terms of the MADA which are found to be resulting in anticompetitive conduct viz. pre-installation of the entire suit of GMS as well as prominent placement thereof. By foreclosing the market for rivals, these covenants have also reduced the potential choice for users. Further, the pre-installation requirement for the entire bouquet of apps of Google is in the nature of supplementary obligation imposed on the OEMs, if they wish to pre-install even a single app of Google. The Commission is of the view that these practices of Google, especially when seen along with AFA/ACC and RSAs, harms competition as the restrictions prohibits alternative vendors from out competing Google’s apps on the merits.

Making organization of events commercially unviable for competing organizers: The above discussed restrictions imposed by AICF, on organizations such as CAI and the players, including the Informants, have a deterrent effect whereby chess players would not prefer to participate in chess tournaments being organised by other associations like CAI. AICF thus, indulges in practices which result in denial of market access.

By imposing ban on players like the Informants and removing their ELO/FIDE rating, AICF makes organisation of chess events difficult for other competitors, by not allowing them to get the best resources and players for organising/participating in their events.