Bombay High Court rules against CCI order

Bombay High Court rules against CCI order

Asianet Star Communications, Disney Broadcasting and Star India had filed a plea opposing investigation of the companies

The Bombay High Court has directed the Competition Commission of India (CCI) not to take any coercive action against three broadcasters and media and entertainment companies on an order initiating an investigation against the companies.

The petitioners include Asianet Star Communications Pvt Ltd, Disney Broadcasting (India) Pvt Ltd and Star India Pvt Ltd.

A bench of Justice Gautam Patel and Justice Madhav Jamdar ordered, "The CCI is not to pass any further orders or to adjudicate further on the complaint (in which the order under the challenge is passed) until further orders of the Court. The CCI is not to permit or direct any coercive actions against the petitioners until the next date."

Additionally, the court directed the petitioners to furnish the documentary material to the Director General (DG) of CCI in response to the queries. It also ordered the DG to keep the information confidential as required by the law.

The bench ruled on the petitions challenging the order of the CCI passed in February 2022 directing the DG to initiate the investigation under the Competition Commission Act based on a complaint by Asianet Digital Network Pvt Ltd (ADNPL).

ADNPL has been in the business of distribution of TV channels to customers through local cable operators, predominantly in Kerala. In its complaint, ADNPL contended that broadcasters such as the petitioners should not have discriminatory pricing in commercial contracts with multi-service operators.

It had referred to the regulations of the Telecom Regulatory Authority of India (TRAI) and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that prohibit discriminatory pricing in commercial contracts with multi-service operators.

ADNPL had stated that by abusing their position of dominance, the petitioners provided significant discounts to a direct competitor through allied agreements that offered a cash-back system. It meant bypassing the TRAI/TDSAT regulations and providing an unfair advantage to ADNLP's competitors.

In response to that, the CCI had ordered an investigation into the matter. Subsequently, the petitioners challenged it before the High Court.

Appearing for Star India, Senior Advocate Darius Khambata submitted that the order was bad and could not be sustained.

However, appearing for the CCI, Advocate Somsekhar Sundaresan opposed the petition on the point of jurisdiction. He stated that since the entire issue arose in Kerala, the challenge ought to also have been in the court of that state.

Senior Advocate Navroz Seervai, while appearing for ADNLP, also supported the same. He submitted that ADNPL's contention was that the petitioners were subverting the TRAI/TDSAT norms and, thereby, causing prejudice. The two contended that all that the CCI intended to do was collect the data.

The court suggested that the CCI be given an opportunity to place its case before the court along with the complainant. It permitted the parties to file their affidavits in replies and rejoinders before 3 June and placed the matter for hearing on 8 June.

Khambata along with Senior Advocate Dr. Mustafa Doctor and Advocates Kunal Dwarkadas, Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur and Akshay Agarwal briefed by AZB & Partners, appeared for Star and Asianet Star.

Seervai along with Senior Advocate Dr Birendra Saraf and Advocates Pradeep Bakhru, Avinash Amarnath, Tarun Donadi, Nikhil Gupta and Priyanka Chaddha briefed by Wadia Ghandy & Co appeared for ADNPL.

Sundaresan appeared for CCI with Advocates Abhishek Venkatraman, Viswajit Deb, Manu Chaturvedi and Malhar Desai Hafeez Patanwala briefed by Juris Corp.

Advocate Thomas George of Saikrishna Associates represented Disney Broadcasting.