Even as legal troubles hound cab aggregator Uber, it put up a brave fight in the Supreme Court yesterday..A Bench of Justices Dipak Misra, R Banumathi and Mohan M Shantanagoudar yesterday heard Uber India’s grievances against the Competition Commission of India (CCI)..The Story So Far.The matter has its genesis in an information filed by Meru in 2015 alleging that Uber was indulging in anti-competitive trade practices by giving discounts thus leading to lower fares. Meru alleged that it was predatory pricing in a bid to oust competitors..The CCI refused to interfere saying there was no prima facie case made out. Meru chose to file an appeal against the decision of CCI in COMPAT..One important aspect which came up for COMPAT’s consideration was the scope of ‘market’. CCI had ruled that the relevant market was Delhi alone and not Delhi-NCR. COMPAT, however, over ruled this aspect of CCI’s decision and ordered an investigation by the DG. This order has now been challenged by Uber..On January 27, the Supreme Court had ordered a stay on the probe by the CCI and had issued notice, seeking CCI’s response in the matter..The Lawyers.Senior Advocate Kapil Sibal is representing Uber. He was briefed by Shardul Amarchand Mangaldas. Abhishek Manu Singhvi appeared for Meru..Uber’s Standpoint.Uber is an aggregator.Taking over the reins from Senior Advocate Harish Salve, who appeared in the last hearing, Kapil Sibal contended that the app-based cab service has a unique and innovative way of creating and operating an app for customers to call cabs. Meaning therefore, that Uber was a mere ‘aggregator’ and had no direct role to play in promoting or retarding competition in the market. Several factors, such as the availability of cabs and the drivers themselves determined the pricing..No exclusivity.It was also submitted that Uber enjoys no exclusivity amongst customers. The app only shows a particular customer, the cabs available in a particular area and he is free to choose whether or not to travel with them. Customers also have the option of installing both Ola and Uber on their phones..No dominant position.Referring to statistics relating to market share by revenue, number of cabs and number of trips, Sibal submitted,.“Is it possible, when the market is in an ever-evolving, but nascent stage, to say that a particular service provider is in a dominant position?”.He went on to cite examples such as Google and Microsoft (in certain products and services), which could be said to have a dominant share in the market. Contrasted with that, Uber was merely “doing well”, and not controlling the market by any standard. Pricing to generate competition was not a violation of Section 4 of the Competition Act 2002..Jurisdictional Flaw.Sibal attacked the order of COMPAT stating that there was no evidence on the basis of which enquiry could have been ordered except a TechSci Report received under Section 19, which was originally rejected by the CCI..He, therefore, argued that in the absence of a prima facie case, an enquiry could not be directed..Meru’s counter.Dr. Singhvi quoted the judgment by the COMPAT, noting that it had explicitly mentioned that “the size of discounts and incentives show that 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.”.Additionally, in view of the TechSci Report’s statistics, which were relied upon by the CCI, a prima facie case was made out, and an enquiry could have been ordered..He also argued that the COMPAT was well within its rights to ‘modify’ the order of the CCI, pursuant to the power granted to it under Section 53B (3) of the 2002 Act..The case is now posted for March 8.
Even as legal troubles hound cab aggregator Uber, it put up a brave fight in the Supreme Court yesterday..A Bench of Justices Dipak Misra, R Banumathi and Mohan M Shantanagoudar yesterday heard Uber India’s grievances against the Competition Commission of India (CCI)..The Story So Far.The matter has its genesis in an information filed by Meru in 2015 alleging that Uber was indulging in anti-competitive trade practices by giving discounts thus leading to lower fares. Meru alleged that it was predatory pricing in a bid to oust competitors..The CCI refused to interfere saying there was no prima facie case made out. Meru chose to file an appeal against the decision of CCI in COMPAT..One important aspect which came up for COMPAT’s consideration was the scope of ‘market’. CCI had ruled that the relevant market was Delhi alone and not Delhi-NCR. COMPAT, however, over ruled this aspect of CCI’s decision and ordered an investigation by the DG. This order has now been challenged by Uber..On January 27, the Supreme Court had ordered a stay on the probe by the CCI and had issued notice, seeking CCI’s response in the matter..The Lawyers.Senior Advocate Kapil Sibal is representing Uber. He was briefed by Shardul Amarchand Mangaldas. Abhishek Manu Singhvi appeared for Meru..Uber’s Standpoint.Uber is an aggregator.Taking over the reins from Senior Advocate Harish Salve, who appeared in the last hearing, Kapil Sibal contended that the app-based cab service has a unique and innovative way of creating and operating an app for customers to call cabs. Meaning therefore, that Uber was a mere ‘aggregator’ and had no direct role to play in promoting or retarding competition in the market. Several factors, such as the availability of cabs and the drivers themselves determined the pricing..No exclusivity.It was also submitted that Uber enjoys no exclusivity amongst customers. The app only shows a particular customer, the cabs available in a particular area and he is free to choose whether or not to travel with them. Customers also have the option of installing both Ola and Uber on their phones..No dominant position.Referring to statistics relating to market share by revenue, number of cabs and number of trips, Sibal submitted,.“Is it possible, when the market is in an ever-evolving, but nascent stage, to say that a particular service provider is in a dominant position?”.He went on to cite examples such as Google and Microsoft (in certain products and services), which could be said to have a dominant share in the market. Contrasted with that, Uber was merely “doing well”, and not controlling the market by any standard. Pricing to generate competition was not a violation of Section 4 of the Competition Act 2002..Jurisdictional Flaw.Sibal attacked the order of COMPAT stating that there was no evidence on the basis of which enquiry could have been ordered except a TechSci Report received under Section 19, which was originally rejected by the CCI..He, therefore, argued that in the absence of a prima facie case, an enquiry could not be directed..Meru’s counter.Dr. Singhvi quoted the judgment by the COMPAT, noting that it had explicitly mentioned that “the size of discounts and incentives show that 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.”.Additionally, in view of the TechSci Report’s statistics, which were relied upon by the CCI, a prima facie case was made out, and an enquiry could have been ordered..He also argued that the COMPAT was well within its rights to ‘modify’ the order of the CCI, pursuant to the power granted to it under Section 53B (3) of the 2002 Act..The case is now posted for March 8.
