Can a person who has not suffered an invasion of his legal rights as a consumer move CCI for violation of Competition law? NCLAT answers

The National Company Law Appellate Tribunal (NCLAT) has held that a person who has not suffered an invasion of his legal rights as a consumer or as a beneficiary of healthy competitive practices has no locus standi to approach the Competition Commission of India (CCI) in terms of Section 19(1)(a) of the Competition Act, 2002. (Samir Agrawal vs CCI & ors).The judgment was passed by a three-member Bench of Justice Bansi Lal Bhat, Member (Judicial); Justice Venugopal M, Member (Judicial) and Shreesha Merla, Member (Technical) while dismissing an appeal against CCI's decision to close a complaint alleging violation of Competition Act by Ola and Uber. .An independent law practitioner, Samir Agrawal had filed Information with the CCI, alleging a contravention of the Competition Act, 2002..As per the Informant, cab aggregators Ola and Uber formed a “hub and spoke cartel” as they used their respective algorithm to facilitate price fixing between drivers. It was thus claimed that there was collusion between the drivers through the cab aggregators. .The Commission, however, refused to order an investigation in the matter after it opined that there existed no prima facie case..Aggrieved by the closure, the Informant filed an appeal..Before the NCLAT, ANI Technologies argued that Ola merely acted as an intermediary that connected two ends of the supply chain i.e. taxi driver and the commuter. It was further pointed out that pricing was impossible to be fixed as it depended on numerous variables such as distance, time, availability of cab, weather etc. .ANI Technologies also stated that there was no agreement between Ola and its taxi drivers, or between the taxi drivers themselves, on the issue of price fixation..Uber contended that its price structure was comparable to metered taxis as well as auto-rickshaws, which followed standard price mechanism at different points of the day. .It was said that the driver partners were free to charge any amount which was lower than the one recommended by the App. .Before deciding the appeal on merit, the NCLAT examined the issue of the Informant having no locus to initiate any action under the Act..The NCLAT noted that as per the Competition Act, CCI was empowered to take cognizance of any allegation of contravention of anti-trust laws on its own motion or on the basis of the complaint or on the basis of reference made to it by the appropriate Government or statutory authority..It noted that information into allegations of contravention could be filed by any person, consumer or their association or trade association in terms of Section 19(1)(a)..NCLAT stated, .“The question that arises for consideration is whether a ‘person’ would mean any natural person irrespective of he being a consumer who has suffered invasion of his legal rights or a person whose legal rights have been or are likely to be jeopardised by the alleged anti-competitive agreement or abuse of dominant position.”.The NCLAT said that although the concept of locus standi had been diluted to some extent by allowing PILs, class action etc, when a statute like the Competition Act specifically provided for the mode of taking cognizance of allegations in a particular manner, a reference to receipt of any information “from any person” was necessarily to be construed as a reference to "a person who has suffered an invasion of his legal rights as a consumer or beneficiary of healthy competitive practices"..“Any other interpretation would make room for unscrupulous people to rake issues of anti-competitive agreements or abuse of dominant position targeting some enterprises with oblique motives."NCLAT remarked..It observed in the instant case, the Informant, an independent law-practitioner, had nothing on the record to show that he suffered a legal injury at the hands of Ola and Uber as a consumer or as a member of any consumer or trade association..The NCLAT thus held that the Informant had no locus standi to maintain an action qua the alleged contravention of the Act..The NCLAT then proceeded to consider the case on merit and remarked that the business model of Ola and Uber did not support the allegation of Informant as regards price discrimination..It noted that as per the allegation, the cab aggregators used their respective algorithms to facilitate price-fixing between drivers but significantly, did not allege collusion between the cab aggregators. .The NCLAT opined that the allegation that price determination by cab aggregators amounted to price-fixing on behalf of drivers ought to be outrightly rejected as there was no collusion inter se the cab aggregators..Refusing to accept the allegation of the existence of a "hub and spoke" cartel, it said,.“The concept of hub and spoke cartel stated to be applicable to the business model of Ola and Uber as a hub with their platforms acting as a hub for collusion inter se the spokes i.e. drivers resting upon US Class Action Suit titled “Spencer Meyer v. Travis Kalanick” has no application as the business model of Ola and Uber (as it operates in India) does not manifest in restricting price competition among drivers to the detriment of its riders. The matter relates to foreign antitrust jurisdiction with different connotation and cannot be imported to operate within the ambit and scope of the mechanism dealing with redressal of competition concerns under the Act.”NCLAT.The NCLAT added that it was an admitted position that under the business model of Ola, there was no exchange of information amongst the drivers and the cab aggregators did not function as an association of its driver partners..“Thus, the allegation of their facilitating a cartel defies the logic and has to be repelled.", it said..As far as the allegation of abuse of dominant position was concerned, the NCLAT stated that none of the two enterprises independently held dominant positions in the relevant market..The NCLAT stated that to direct the Director-General to cause an investigation to be made into the matter, CCI must arrive at an opinion in regard to the existence or otherwise of a prima facie case qua alleged contravention..In the instant case, the NCLAT observed, the Commission dealt with the allegations and recorded its opinion. In view of the above discussion, the NCLAT concluded that the opinion of the Commission with respect to the non-existence of a prima facie case could not be faulted on any ground..Finding no legal infirmity in the CCI order, the appeal was dismissed by NCLAT..Informant appeared in person with Advocate Pranaynath Jha..Advocate Rajshekhar Rao argued for Ola with Trilegal Competition team including Partner Nisha Kaur Uberoi, Counsel Gautam Chawla, Senior Associates Shiv Johar and Rishabh Juneja and Associate Ankita Dhawan,.Uber was represented by Advocate Samar Bansal with Shardul Amarchand Mangaldas lawyers Rohan Arora, Aman Singh Sethi, Anjali Kumar and Devahuti Patha..Read the Judgement: