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CCI dismisses Airtel’s complaint against RIL, Reliance Jio over free offers

LiveMint logoLiveMint 09-06-2017 PTI

New Delhi: Fair trade regulator Competition Commission of India (CCI) on Friday rejected Bharti Airtel’s complaint alleging anti-competitive practices by Reliance Industries Ltd (RIL) and Reliance Jio, saying no case could be made out against the Mukesh Ambani-led firms.

The CCI also said Bharti Airtel has made “contradictory submissions of the impugned free services” of Jio as being an outcome of leverage of dominant position by parent Reliance Industries Ltd (RIL) as well as an outcome of alleged anti-competitive agreement between the two group firms.

Dismissing Bharti Airtel’s complaint, the CCI said in a 17-page order that the company has not given any plausible explanation as to how Jio’s free services were an outcome of unilateral conduct of Reliance Industries as well as an anti-competitive agreement between RIL and Jio.

The order assumes significance as the CCI has already ordered a detailed probe into the conduct of leading telecom operators, including Bharti Airtel, for allegedly forming a cartel against Reliance Jio.

In Friday’s order, the CCI said Jio’s conduct “has not been found as prima facie contravening the provisions of the (Competition) Act prohibiting unfair pricing, including predatory pricing”.

It also said that in the absence of any finding of anti- competitive conduct by Jio, its parent RIL cannot be held to be in contravention of the competition laws just because it has made huge investments in its telecom venture.

“Mere investments cannot be regarded as leverage of dominant position, particularly when RIL itself is not engaged in business of providing telecom services or any activities incidental thereto,” the CCI said.

“If one were to construe such investment as anti- competitive, the same would deter entry and/or expansion and limit the growth of markets,” the CCI added while ruling that no prima facie case of contravention of the competition law is made out against the two Reliance firms.

In February, the Sunil Mittal-led telecom operator had moved the CCI against Jio.

The regulator observed that the gravamen of the allegations concerns free services provided by Jio since the latter’s inception in September 2016 under “one offer or the other”.

For the case, the CCI considered market for ‘provision of wireless telecommunication services to end users in each of the 22 circles in India’ as the relevant one.

According to the regulator, it would not be appropriate to hold Jio dominant in a scenario where its customers constitute less than 7% of the total subscriber base at a pan-India level.

Besides, various functions of telecom service providers are regulated and entrenched players have been in existence for over a decade with sound business presence, comparable financial position, technical capabilities and reputation, the regulator observed.

As per the watchdog, in a competitive market scenario, where there are already big players operating in the market, it would not be anti-competitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes.

“Such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation under the Act,” it added.

Bharti Airtel had also alleged that the two Reliance firms had entered into an agreement whereby RIL, being in position of holding unlimited fund and resources, had allowed unfettered access of its funds to Jio which would adversely impact competition.

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