Moot Defendant PDF

T
TEAM CODE: 008

Team Code: 008
2nd TNNLU – CCI NATIONAL MOOT COURT COMPETITION, MARCH 2019
Before
THE HONOURABLE SUPREME COURT OF KRATOS
Under53T of the Kratotian Competition Act, 2002and Article 136 of Constitution of Kratos.
CIVIL APPEAL NO. ______/2019

GANGA ……………….……………….……….....……………………………APPELANT-I
ORIGAMI…………….....…………...…………………………………………APPELANT-II
Versus
PREMIER …………………………………………………………...………RESPONDENT-I
BRAHMAPUTRA…………………..……………………………...………RESPONDENT-II
MONEYKART……………………………..……………………...………RESPONDENT-III
CHAPO……………………………………………..……………...………RESPONDENT-IV
MAHJONG………………………………….……………………...………RESPONDENT-V
Along with
SPECIAL LEAVE TO APPEAL NO. ______/2019
MADRASAPATNAM TRADERS UNION…….....………………..……………APPELANT

Versus
MONEYKART……………………………..……………………...………RESPONDENT-III
CHAPO……………………………………………..……………...………RESPONDENT-IV
MAHJONG………………………………….……………………...………RESPONDENT-V
Along with
CIVIL APPEAL NO. ______/2019
DAVID AND CO…….....…………………………….……………..……………APPELANT
Versus
CHAPO……………………...……………..……………………...………RESPONDENT-III
MEMORANDUM ON BEHALF OF THE RESPONDENTS
Page | i
2nd TNNLU – CCI National Moot Court Competition, March 2019
TABLE OF CONTENTS
INDEX OF AUTHORITIES………………………………………………………………….ii
STATEMENT OF JURISDICTION…………………………………………………….……xi
STATEMENT OF FACTS……………………………………………………......................xii
STATEMENT OF ISSUES…………………………………………………………………xiii
SUMMARY OF ARGUMENTS……………………………………………………………xiv
ARGUMENTS ADVANCED…………………………………………………………………1
1. THE RESPONDENTS ARE NOT INVOLVED IN CARTELISATION …………………1
1.1. Price parallelism is not per se anti-competitive………………………………………..1
1.1.1. Price parallelism is not conclusive proof of cartelization in an oligopolistic
market…………………………………….………………………….………...1
1.1.2. Legitimate justification for parallel pricing…………………………………....3
1.2. There was no agreement between the respondents……………………………………5
1.2.1. Using of pricing algorithm per se is not anti-competitive…………………......5
1.2.2. There is no evidence of an agreement…………………………………………6
1.2.3. Burden of proof………………………………………………………………..7
1.2.4. No structural links between the five companies……………………………….7
1.3. There was no appreciable adverse effect on competition……………………………..8
1.3.1. No evidence of adverse effect on competition………………………………...8
1.3.2. Pro-competitive effects of the algorithm………………………………………8
1.3.3. Consideration of factors mentioned in section 19(3)…………………………..9
2. THE RIGHTS OF TRADERS HAVE NOT BEEN VIOLATED…………………...……..9
2.1. News report is not admissible evidence……………………………………………….9
2.2. No violation of fundamental rights…………………………………………………...10
2.2.1. Fundamental rights cannot be enforced against private parties………………10
2.2.2. No violation of fundamental rights…………………………………………...11
2.3. Appellants no longer possess the cause of action…………………………………….13
2.4. Alternate remedy is available with the appellants……………………………………15
3. THE RESPONDENTS ARE NOT HOLDING COLLECTIVE DOMINANT POSITION
AND HAVE NOT VIOLATED THE PROVISIONS OF THE ACT………….…………16
3.1. No concept of collective dominance as per Kratos competition law………………...16
3.2. CCK has acted outside the scope of its power……………………………………….17
3.2.1. Judiciary cannot legislate…………………………………………………….17
3.2.2. Non enforcement of a law……………………………………………………18
3.2.3. Strict interpretation…………………………………………………………...19
3.3. No abuse of dominant position………………………………………….……………19
3.3.1. Relevant market………………………………………………………………20
3.3.2. No dominance in relevant market……………………………………………22
3.3.3. No abuse under provisions of the competition act……………………..…….23
3.4. Pro-competitive justification……………………………………………………..…..24
Prayer ……………………………………………………………………..…………………xv
MEMORANDUM ON BEHALF OF RESPONDENTS i

INDEX OF AUTHORITIES
BOOKS
 ABIR ROY AND JAYANT KUMAR, COMPETITION LAW IN INDIA (2nd edn, 2014).
 S.M. DUGAR, GUIDE TO COMPETITION LAW (6th edn, 2016).
 DP Mittal, Competition Law and Practice (3rd edn, 2011) 172.
CASES
Sr No. Case Name & Citation Pg No.
1. A.K. Jain (OP) v The Dwarkadhis Projects (P) Ltd. 2015 CompLR 487 20
(CompAT).
2. Aberdeen Journals v Director General of Fair Trading CAT 4 [2002] 21
Comp AR 167.
3. Accreditation Commission for Conformity Assessment Bodies Private 13
Limited v Quality Council of India/National Accreditation Board For
Certification Bodies and others 2012 Indlaw CCI 62.
4. Ahlstrom Oy v Commission (1993) 4 CMLR 407. 1, 2
5. Airtours Plc v. Commission, Case T-342/99, [2002] ECR II-2585. 20
6. Ajay Hasia v Khalid Mujib (1981) 1SCC 722. 10
7. Alkali & Chemical Corporation of India Ltd. And Bayer India Ltd RTPE 1
21 of 1981.
8. All India Footwear Manufacturers & Retailers Association v Union of 13, 14
India W.P. (C) 7479/2015.
9. All India Online Vendors Association v Flipkart India Private Limited 12
and Anr Case No. 20 of 2018(CCI).
10. All India Tyre Dealers' Federation v Tyre Manufacturers 2013 CompLR 2
92 (CCI).
11. ANI Technologies Pvt. Ltd. v. Fast Track Call Cab Pvt. Ltd. (2015) 131 22
SCL 240 (CCI).
12. Arshiya Rail Infrastructure Limited v Ministry of Railways 2012 Indlaw 21
CCI 25.
13. Ashish Ahuja v Snapdeal and Anr 2014 Indlaw CCI 42. 11
14. Babloo Chauhan @ Dabloo v State Govt. of NCT of Delhi 247 (2018) 11
DLT 31.
MEMORANDUM ON BEHALF OF RESPONDENTS ii

15. Bayer v Commission 2000 ECR II-3383 (UK). 7

16. Bela Rani Bhattcharyya v Union of India 2014 Indlaw DEL 3601; 2014 15
(213) DLT 1.
17. Belaire Owners’ Association v DLF Limited, HUDA & Ors. [2011] 104 23
CLA 398 (CCI).
18. Bell Atlantic Corporation v Twombly 550 US 544(2007). 1
19. Benilal v State of Maharashtra 1995 Supp (1) SCC 235. 13
20. Benzine en Petroleum Handelsmaatschappij BV v Commission (1978) 3
ECR 1513 (UK).
21. Bhavesh D Parish v Union of India (2000) 5 SCC 471. 13
22. Board of Control for Cricket in India v Competition Commission of India 10
and another 2015 Indlaw COMPAT 8.
23. British Airways v Commission [2003] ECR II-5917. 21
24. Brooke Group Ltd v Brown and Williamson Tobacco Corporation 509 US 1,3, 12,
209 (1993). 13
25. Builders' Association of India v Cement Manufacturers' Association & 8
Ors. 2016CompLR 983 (CCI).
26. Cantonment Board, Dinapore v Taramani AIR 1995 SC 61, 1992 Supp 18
(2) SCC 501.
27. Cargill, Inc. v Monfort of Colorado, Inc. 479 U. S. 104, 117 (1986). 3
28. Suiker Unie v Commission [1975] ECR 1663. 5
29. Imperial Chemical Industries (1972) ECR 619. 5
30. Gencor v Commission [1999] ECR II-753. 7
31. Chameli Singh v State of Uttar Pradesh AIR 1996 SC 1051, (1996) 2 SCC 11
549.
32. Clearstream v Commission General Court [2009] ECR II-3155. 21
33. Clorox Co. v Sterling Winthrop, Inc. 117 F.3d 50, 56 (2d Cir.1997). 24
34. Collector, C.E., Chandan Nagar v Dunlop India Limited AIR 1985 SC 15
330.
35. Commissioner of Income Tax and Ors. v Chhabil Dass Agarwal (2014) 1 15
SCC 603.
36. Consumer Online Foundation v Tata Sky Limited & Ors. 2011 Indlaw 17
CCI 12.
MEMORANDUM ON BEHALF OF RESPONDENTS iii

37. Delhi Development Horticulutre Employees’ Union v Delhi 13

Administration AIR 1992 SC 789
38. Dinesh Bulakhi Harijan v The State 2009 CriLJ 114. 13
39. Dish TV India Ltd v Hathway Cable & Datacom Ltd 2014 Indlaw CCI 17
20.
40. Dish TV v Prasar Bharti Case No. 44 of 2010(CCI). 13
41. Divisional Manager Aravali Golf Course v Chander Haas 2008 (3) JT 18
221.
42. Ekta Shakti Foundation v Govt. of NCT Delhi (2006) 10 SCC 337. 13
43. European Commission v Volkswagen [2006] ECR I-6585. 7
44. Explosives Manufacturers Welfare Association v. Coal India Limited, 25
2012 CompLR 525 (CCI).
45. Express Industry Council of India v Jet Airways (India) Ltd. 2016 1, 2
CompLR 102 (CCI).
46. Fast Track Call Cab Private Limited and another v ANI Technologies 12, 21
Private Limited 2017 Indlaw CCI 48.
47. Fx Enterprise Solutions India Pvt. Ltd. & Anr.v Hyundai Motor India 12
Limited 2017 Indlaw CCI 39.
48. Gilbarco, 127 F.3d at 1163. 24
49. Global Tax Free Traders v William Grant & Sons Limited 2015 CompLR 22
503 (CompAT).
50. Greek Telecommunications Organization (OTE) v National Commission 4
(2005) E.C.C. 2 (UK).
51. Hanuman v State of Madhya Pradesh AIR 1979 SC 798. 7
52. Haridas Exports v All India Float Glass Manufacturers Association 5
(2002) 111 Comp. Cas. 617 (SC).
53. Harla v The State Of Rajasthan 1951 AIR 467, 1952 SCR 110. 18
54. Hilti AG v Commission of the European Communities (1990) ECR II-163 3
(UK).
55. Hoffmann La Roche & Co. AG v Commission (1979) ECR 461 (UK). 3
56. Hugin v Commission [1979] E.C.R. 1869. 21
57. In re JFE Engineering (2004) ECR II-2501 (UK). 13
58. In re SACEM III 1989 ECR 2521 (UK). 7
MEMORANDUM ON BEHALF OF RESPONDENTS iv

59. In re, Flat Glass 385 F.3d 360 (2004). 1

60. In re: Alleged cartelization by steel producers 2012 Indlaw CCI 45. 1, 6
61. In re: Domestic Air Lines 2012 CompLR 154 (CCI). 1
62. In Re: Johnson And Johnson Ltd. (1988) 64 Comp Cas 394 NULL. 12
63. In Re: Manufacturers of Asbestos Cement Products 2014 CompLR 272 3
(CCI).
64. In Re: Mr. Mohit Manglani v M/s Flipkart India Private Limited & Ors. 12, 13
Case No. 80 of 2014(CCI).
65. Indian Drugs & Pharmaceuticals Ltd. v The Workman of Indian Drugs & 13, 18
Pharmaceuticals Ltd. (2007) 1 SCC 408.
66. Indian Sugar Mills Association v Indian Jute Mills Association 2014 17
CompLR 225 (CCI) ).
67. Irish Sugar plc v Commission of the European Communities (1999) ECR 3
II-2969 (UK).
68. Jasper Infotech v Kaff Appliances 2019 Indlaw CCI 1. 12
69. Joined Cases C-68/94 and C-30/95 Kali & Salz [1998] ECR I-1375. 20
70. Joined cases T-68, 77 and 78/89 SocietaItalianaVietro [1992] ECR II- 7
1403.
71. Jyoti Swaroop Arora v. Tulip Infratech Ltd. 2015 CompLR 109 (CCI). 16
72. Kailash Suneja v Appropriate Authority (1998) 231 ITR 318 (Del). 20
73. Kanubhai Brahmbhatt v State of Gujarat AIR 1987 SC 1159. 15
74. Khilumal Topandas v Arjundas Tulsidas 1959 Indlaw RAJ 26. 10
75. Kish Glass v Commission [2000] ECR-II 1885. 21
76. Kochuni K.K. v State of Madras 1960 AIR SC 1080. 11
77. Laxmi Raj Shetty & Anr v State of Tamil Nadu 1988 Indlaw SC 69. 10
78. Lupin Limited others v Competition Commission of India and others 10
2016 Indlaw COMPAT 34.
79. M.C. Mehta v Union of India (1987) 1 SCC 395. 11
80. M/s HT Media v Super Cassettes Industries Limited 2014 Indlaw CCI 74. 23
81. M/s Royal Energy Ltd. v M/s Indian Oil Corporation Ltd. & Ors. 2012 17
CompLR 563 (CCI).
82. Magnus Graphics v Nilpeter India Pvt. Ltd. 2015 CompLR 93 (CCI). 21
83. Magor and St Mellons RDC v Newport Corporation [1951] 2 All ER 839. 18
MEMORANDUM ON BEHALF OF RESPONDENTS v

84. Mahabir Coke Industry v PCB AIR 1998 Gau 10. 18

85. Mahindra & Mahindra Ltd. v Union of India (1979) 2 SCC 529. 8
86. Manappuram Jewellers Pvt. Ltd. v Kerala Gold & Silver Dealers 17
Association 2012 CompLR 548 (CCI).
87. Manohar Lal Sharma v Union of India (2013) 6 SCC 616. 13
88. Maple Flooring Manufacturers association et al v United States 268 US 8
563 (1925).
89. Matsushita Electric Industrial Co. v Zenith Radio Corp. 475 US 574 3
(1986).
90. MCX Stock Exchange Ltd v National Stock Exchange of India Ltd. 2011 4, 12
SCC OnLine CCI 52, 2011 Comp LR 0129 (CCI).
91. Mina Perween v The State Of West Bengal & Ors MAT 515 of 2018. 15
92. Mr. Ramakant Kini v L.H. Hiranandani Hospital 2014 Indlaw CCI 79. 23
93. Municipal Council Customs v Shanti Lal AIR 1966 SC 197. 15
94. Naap Pharmaceuticals Holdings v Office of Communications (2002) CAT 4, 13
1.
95. Neeraj Malhotra v North Delhi Power Ltd. (2011) 3 SCC 436. 13
96. Nivedita Sharma v Cellular Operators Association of India 2011 14(SCC) 15, 16
337.
97. NVV v. Commission Case T-151/5, [2009] ECR II-1219. 20
98. Oommen Chandy v State of Kerala and others 2016 Indlaw KER 599. 10
99. P.D. Shamdasani v Central Bank Of India 1952 AIR 59, 1952 SCR 391. 11
100. P.V. Surender Babu v Prohibition & Excise Supdt. Chittoor 1998 (5) 16
ALD 549.
101. Peerless General Finance and Investment Company v Union of India 13
(1992)2 SCC 343.
102. PN Kumar v Municipal Corp of Delhi 1988 SCR (1) 732. 15
103. Polypropylene-Atochem 1991 ECR-II 1991 (UK). 7
104. Polypropylene-Petrofina 1991 ECR II-1087 (UK). 7
105. Quadrant EPP Surlon India Ltd. v INA Bearings India Pvt. Ltd. 2013 22
CompLR 664 (CCI).
106. R. Klayani v Janak C Mehta 2008 (14) SCALE 85. 19
107. R. P. Luthra v CBI 2014 Indlaw DEL 2951. 10
MEMORANDUM ON BEHALF OF RESPONDENTS vi

108. R. Ramkumar v Akshaya Private Limited 2017 Indlaw CCI 71. 20

109. RC Cooper v Union of India 1970 AIR SC 564. 13
110. Retailers Association of India v Union of India W.P. (C) 5034/2015. 13, 14
111. Rishi Keshwani v Kanti Traders 2017 Indlaw CCI 61. 20
112. Royal Energy Ltd v IOCL and others 2012 CompLR 563 (CCI). 17
113. S. Khushboo v Kanniammal AIR 2010 SC 3196. 19
114. S.C. Chandra and Ors. v State of Jharkhand and Ors. JT 2007 (10) 4 SC 18
272.
115. S.K. Mukherjee v Chemical Allied Products AIR 1962 Cal 10, 65 CWN 11
1172, 1961 (3) FLR 404.
116. SA & Grundig – Verkaufs – GmbH v Commission 1966 ECR 299 (UK). 7
117. Samant N. Balakrishna v George Fernandez (1969) 3 SCC 238 10
118. Sanjeev Rao v Andhra Pradesh Hire Purchase Association Case No. 49 of 16
2012(CCI)
119. Schott Glass India Pvt. Ltd. v CCI 2014 CompLR 295 (CompAT). 24
120. Shri Sonam Sharma v Apple, Vodafone, Airtel & Ors. 2013 CompLR 346 16
(CCI).
121. Southway Theatres Inc. v Georgia Theatre Company 672 F.2d485 (5th 1
Cir. 1982).
122. Standard Oil Co. of California and Standard Station Inc. v US 337 US 20
293.
123. State of Goa v A.H. Jaffar and Sons Asstt. AIR 1995 SC 333 15
124. State of Punjab v Rafiq Masih (2015) 4 SCC 334. 11
125. State of West Bengal v Swapan Kumar Guha AIR 1982 SC 949. 19
126. TATA Engineering & Locomotive Co. Ltd. v Registrar of Restrictive 24
Trade Practices [1977] 2 SCR 685.
127. Thansingh Nathumal v Supdt of Taxes AIR 1964 SC 1419. 15
128. The Executive Engineer (State Of Karnataka) v K. Somasetty & Ors. 11
1997 Indlaw SC 996, (1997) 5 SCC 434.
129. Theater enterprises Inc. v Paramount Film Distributing Corp. 346 U.S. 7
537 (1948).
130. Theatre Enterprises Inc v Paramount Film Distribution Corporation 346 1
US 537 (1954).
MEMORANDUM ON BEHALF OF RESPONDENTS vii

131. Trod Limited and GB Eye Ltd. Case 50223. 5

132. U.P v U.P Rajya Khanij Vikas Nigam S.S 2008 (9) Scale 1. 16
133. U.P. State Bridge Corporation Ltd And Others v U.P. RajyaSetu Nigam S. 15
KaramchariSangh (2004) 4 SCC 268.
134. Union of India v T.R.Varma AIR 1957 SC 882. 15
135. United Bank of India v Satyawati Tondon (2010) 8 SCC 110. 15
136. United Brands v Commission (1978) 3 C.M.L.R. 83 . 3, 4, 12
137. Unni Krishnan, J.P. & Ors. v State of Andhra Pradesh & Ors. 1993 AIR 11
217, 1993 SCR (1) 594.
138. US v Aluminum Co of America (Alcoa) 148 F.2d 416 (2d Cir. 1945). 12
139. US v David Topkins No. 15 Cr. 201 (N.D. Cal.). 6
140. Uttaranchal Forest Development Corporation v Jaba.r Singh (2007) 2 15
SCC 112
141. Vali Pero v Fernando Lopez (1989) 4 SCC 671. 15
142. Volkswagen AG v Commission of the European Communities [2000] 20
ECR II-2707.
143. Zee Telefilms Ltd. v Union of India (2005) 4 SCC 649. 11
144. Zuchner v Bayerische Vereinsbank (1981) ECR 2021. 1, 2
STATUTES
 Competition Act, 2002.
 Indian Evidence Act, 1872.
 Clayton’s Act, 1914.
 Constitution of India, 1950.
 Freedom in Pricing and Competition Act, 1992.
 Indian Evidence Act, 1872.
 Indian Penal Code, 1860.
 Monopolistic and Restrictive Trade practices Act, 1969.
 Sherman Act, 1890.
 Treaty for the functioning of the European Union, 1957.
MEMORANDUM ON BEHALF OF RESPONDENTS viii

DICTIONARIES
 Garner Bryan, Black's Law Dictionary (9th ed., 2009)

 P RamanathaAiyar, The Law Lexicon (3rd ed., 2012)
ONLINE DATABASE
 www.westlawindia.com
 www.scconline.com
 www.jstor.org
 www.manupatra.com
MEMORANDUM ON BEHALF OF RESPONDENTS ix

LIST OF ABBREVIATIONS
AIR All India Reporter
AVC Average Variable Cost
CCI Competition Commission of India
CCK Competition Commission of Kratos
Co. Company
CompLR Competition Law Journal
DG Director General
ECR European Commission Reporter
EU European Union
HUDA Haryana Urban Development Authority
In Re In Reference
L.J Law Journal
OP Opposite Party
SC Supreme Court
TFEU Treaty on Functioning Of European Union
u/s Under Section
MEMORANDUM ON BEHALF OF RESPONDENTS x

STATEMENT OF JURISDICTION
The Hon’ble Supreme Court of Kratos exercises jurisdiction to hear the appeal under “Order
LV Rule 5” of The Supreme Court Rules1which states that:
“Where there are two or more appeals arising out of the same matter, the Court may at any
time either on its own motion or on the application of any party, order that the appeals be
consolidated.”
APPEAL PROVISION
Appeal 1: Against order of 53T2. The Central Government or any State Government
National Company Law Appellate or the Commission or any statutory authority or any local
Tribunal (NCLAT) in Premier and authority or any enterprise or any person aggrieved by
Others. vs. Ganga and Another any decision or order of the Appellate Tribunal may file
an appeal to the Supreme Court within sixty days from
the date of communication of the decision or order of the
Appellate Tribunal to them.
Appeal 2: Against judgment of Article 1363. Special leave to appeal by the Supreme
High Court of Madrasapatnam in Court
MTU v. Premier and Others. (1) Notwithstanding anything in this Chapter, the
Supreme Court may, in its discretion, grant special leave
to appeal from any judgment, decree, determination,
sentence or order in any cause or matter passed or made
by any court or tribunal in the territory of India
Appeal 3: Against the order of 53T4. The Central Government or any State Government
National Company Law Appellate or the Commission or any statutory authority or any local
Tribunal (NCLAT) in Premier and authority or any enterprise or any person aggrieved by
Others. vs. David and Co. any decision or order of the Appellate Tribunal may file
an appeal to the Supreme Court within sixty days from
the date of communication of the decision or order of the
Appellate Tribunal to them.
1
The Supreme Court Rules, 2013.
2
Competition Act, 2002.
3
Constitution of Kratos, 1950.
4
MEMORANDUM ON BEHALF OF RESPONDENTS xi

STATEMENT OF FACTS
The Republic of Kratos, a democratic country has laws pari materia with India. Their
Competition Act was enacted in 2002. The Kratotian Competition Act gives due regard to
precedents from India, EU and US. Kratos has 7 major e – commerce namely Premier Pvt.
Ltd., Brahmaputra Pvt. Ltd., Moneykart LLP, Chapo Pvt. Ltd., Mahjong Ltd., Ganga Pvt.
Ltd. and Origamy Pvt. Ltd. A new start-up, named as ‘Pablo’s Alogors’ had developed
algorithm called as ‘Rutta’ to promote easy flow of information and innovative price fixation
techniques in the e – commerce industry. All 7 e- commerce websites used Rutta for fixing
prices of its products. After a year Pablo’s Alogors came up with new version Rutta 2.0
which would consider the price of its competitors while determining the price of a product.
Ganga and Origamy did not switch to Rutta 2.0 while other five companies did. Premier
launched its e- wallet App called FastZapp. Subsequently, MoneyKart and Chapo also
launched their own e – wallet service applications known as ‘PayKing’ and ‘Heisenberg.
CASE NO. RELEVANT FACTS LEADING TO CAUSE OF ACTION

Case No. 1 DG observed from his market analysis that the price of similar products
(Alleged on their respective apps and websites would increase and decrease
Cartelization) simultaneously and remain almost similar at a given time frame. CCK
had penalized the five companies of driving the competition out of the
market. NCLT reversed the decision of CCK.
Case No. 2 Madrasapatnam Traders Union (MTU filed a case before the High
(Rights of Small Court alleging e – commerce companies’ virtual market is distorting the
Traders) physical market of small traders. The High Court summarily dismissed
the case on the ground that the matter is not justiciable before the High
Court and the alternative remedy lies elsewhere.
Case No. 3 David and Co., a small e – wallet service provider filed a complaint
( Alleged Abuse before the CCK alleging that Premier, MoneyKart, and Chapo are
of Dominance) abusing their dominant position in the market by entering into the
exclusivity agreements with the ISPs and thus creating hindrance for the
new and existing competitor to enter or survive in the market. CCK held
them to be collectively abusing their dominant position. NCLAT
reversed the finding of CCK.
The Supreme Court clubbed the cases together.
MEMORANDUM ON BEHALF OF RESPONDENTS xii

ISSUES RAISED
ISSUE 1: WHETHER RESPONDENTS ARE INVOLVED IN CARTELISATION?
ISSUE 2: WHETHER RIGHTS OF THE TRADERS HAVE BEEN VIOLATED?
ISSUE 3: WHETHER RESPONDENTS ARE LIABLE FOR ABUSE OF DOMINANT

POSITION?
MEMORANDUM ON BEHALF OF RESPONDENTS xiii

SUMMARY OF ARGUMENTS
It is humbly submitted before this Hon'ble Court that-
1. Respondents are not involved in cartelisation.

The Respondents humbly submit that Premier, Brahmaputra, Moneykart, Chapo and
Mahjong are not involved in cartelisation as parallel pricing if pursued independently as a
response to the foreseeable conduct of competitors is not a violation of Section 3. Moreover,
they had legitimate justification for parallel pricing. There was no agreement between the five
enterprises. Therefore, there was no Appreciable Adverse Effect on Competition.
2. Rights of traders have not been violated.
The Respondents humbly submit that the rights of the traders have not been violated as there
was no illegal conduct on the part of appellants moreover; present suit is not maintainable as
alternative remedy lies elsewhere. Moreover, the whole prosecution is based upon a news
report which is unreliable. And Press Note dated 26th December 2018 on Foreign Direct
Investment Policy in the e-commerce sector resolved any possible issue that may have been
faced by the appellants thus they no longer possess cause of action.
3. There was no abuse under section 4 of the Competition Act, 2002.
The Respondents humbly submitthat Premier, Moneykart and Chapo are not holding
collective dominant position, and thus, have not violated the provisions of the Competition
Act as there is no concept of collective dominance in Kratos Competition law, therefore, by
holding them liable CCK has acted outside its scope of power and respondents are not
holding collective dominant position in the relevant market as none of the factors stipulated
under 19(4) has been satisfied. In addition, the agreements between respondents and ISP’s
have pro-competitive justification.
MEMORANDUM ON BEHALF OF RESPONDENTS xiv

ARGUMENTS ADVANCED
1. THE RESPONDENTS ARE NOT INVOLVED IN CARTELISATION.

The Respondents humbly submit before the Hon’ble Court that the Premier, Brahmaputra,
Moneykart, Chapo and Mahjong did not partake in a price fixing agreement, which is
prohibited by Section 3(1) read with Section 3(3)(a) of the Competition Act, 2002 hereinafter
referred to as “the Act”.
Parallel pricing if pursued independently5 as a response to the foreseeable conduct of

competitors is [1.1.] not a violation of Section 36and there was [1.2.] no agreement between
the five enterprises. Also, there was no Appreciable Adverse Effect on Competition [1.3.].
1.1.PRICE PARALLELISM IS NOT PER SE ANTI-COMPETITIVE.

To invoke the provisions of section 3 of the Act, the existence of an ‘agreement’ is sine qua
non.7Mere price parallelism is not sufficient evidence in order to establish the presence of an
agreement. It is a tendency in a variety of jurisdictions8, including India9, to say that price
parallelism between parties is not enough to prove a claim for cartelisation.10 Indian law, like
the law of the European Union and the United States11, requires factors in addition to just
similarity in pricing to be punishable for cartelization. Reference can be drawn from a
popular American judgment12which said that in order to claim the benefits of the Sherman
Act, the facts must be enough to raise a right to relief above speculative level and be
sufficient to nudge the plaintiff’s claims from across the line of conceivable to plausible.
Price parallelism can be considered to be conclusive proof of cartelization if it constitutes the

only probable explanation for such conduct.13Similarity of prices charged does not alone
establish the existence of a conspiracy.14
5
Express Industry Council of India v Jet Airways Ltd. 2016 CompLR 102 (CCI).
6
Zuchner v Bayerische Vereinsbank (1981) ECR 2021.
7
In re: Alleged cartelization by steel producers 2012 Indlaw CCI 45.
8
Brooke Group v Williamson Tobacco Corp. 509 US 209 (1993).
9
In re: Domestic Air Lines 2012 CompLR 154 (CCI); Abir Roy and Jayant Kumar, Competition Law in India
(2nd edn, 2014) 111.
10
Alkali & Chemical Corporation of India Ltd. And Bayer India Ltd RTPE 21 of 1981.
11
Theatre Enterprises Inc v Paramount Film Distribution Corporation 346 US 537 (1954); In re, Flat Glass
385 F.3d 360 (2004).
12
Bell Atlantic Corporation v Twombly 550 US 544(2007).
13
Ahlstrom Oy v Commission (1993) 4 CMLR 407.
14
Southway Theatres Inc. v Georgia Theatre Company 672 F.2d485 (5th Cir. 1982).
MEMORENDUM ON BEHALF OF RESPONDENTS xv

1.1.1. PRICE PARALLELISM IS NOT CONCLUSIVE PROOF OF CARTELIZATION

IN AN OLIGOPOLISTIC MARKET.
Parallel prices may furnish proof of concerted practice only if the behaviour cannot be
explained by conditions of competition in the market.15 However, it is legal in case of market
conduct pursued independently16 considering the foreseeable conduct of competitors.17
Parallel pricing occurs if firms change their prices simultaneously, in the same direction, and
proportionally.18 It does not furnish proof of concerted practice if the behaviour can be
explained by conditions of competition in the market.19 It is legal when the adaptation to
market conditions was done independently and not based on information exchanged between
the competitors.20 Competition law only prohibits collusion. It does not deprive economic
operators of their right to adapt intelligently to the anticipated conduct of their competitors.21
Interdependence between firms is an important characteristic of an oligopolistic market22 and

parallel behaviour may simply be a case of intelligent market adaptation.23 In such a market,
it is more likely that each player is aware of, as well as influences the decisions of the
others.24 Firms consider the probable reactions of their competitors when they make
independent decisions, especially regarding price and output.25
It is therefore important to distinguish between rational, independent parallelism and that

arising out of concerted action.26 An oligopolistic market is one which essentially consists of
a few leading players controlling a majority of the market. In the instant case, Premier,
Brahmaputra, Moneykart, Chapo and Mahjong held a joint market share of 72.5%.27 In such a
market, competitors are interdependent.28 Firms consider the probable reactions of their
competitors when they make independent decisions, especially regarding price and output.29
15
16
Express Industry Council of India v Jet Airways (India) Ltd. 2016 CompLR 102 (CCI).
17
18
Abir Roy and Jayant Kumar, Competition Law in India (2nd edn, 2014) 103.
19
20
Express Industry Council of India v Jet Airways (India) Ltd. 2016 CompLR 102 (CCI).
21
22
All India Tyre Dealers' Federation v Tyre Manufacturers 2013 CompLR 92 (CCI).
23
Abir Roy and Jayant Kumar, Competition Law in India (2nd edn, 2014) 67.
24
25
Ibid.
26
Ibid.
27
¶4, Moot Proposition.
28
29
In Re: Manufacturers of Asbestos Cement Products 2014 CompLR 272 (CCI).

1.1.2. LEGITIMATE JUSTIFCATION FOR PARALLEL PRICING.

Objective justification
The present case, the respondents must be allowed to use the defence of “Objective
justification” that refers to three conceptual categories:30
a) Legitimate business behaviour, includes “competition on the merits”31 and “defence

of commercial interests”32;
b) Objective factors out of the control of the company33 ; and
c) Efficiency gains34
a. Legitimate business behaviour.

In case of Brooke Group Ltd. v. Brown & Williamson Tobacoo Corp.,35it was held that,
Cutting prices in order to increase business often is the very essence of competition.36 The
court further stated:
“Predatory pricing schemes are rarely tried, and even more rarely
successful,37 and the costs of an erroneous finding of liability are high. “The
mechanism by which a firm engages in predatory pricing-lowering prices-is
the same mechanism by which a firm stimulates competition; because 'cutting
prices in order to increase business often is the very essence of competition ...
[;] mistaken inferences ... are especially costly, because they chill the very
conduct the antitrust laws are designed to protect.''38 It would be ironic indeed
if the standards for predatory pricing liability were so low that antitrust suits
themselves became a tool for keeping prices high.”
“Meeting competition” defence is applicable when a lower price was made to meet an equally
low price of the competitor.39 It must comply with the principle of proportionality, i.e. the
30
Hilti AG v Commission of the European Communities (1990) ECR II-163 (UK).
31
Hoffmann La Roche & Co. AG v Commission (1979) ECR 461 (UK).
32
United Brands v Commission (1978) ECR 207 (UK).
33
Benzine en Petroleum Handelsmaatschappij BV v Commission (1978) ECR 1513 (UK).
34
Irish Sugar plc v Commission of the European Communities (1999) ECR II-2969 (UK).
35
Brooke Group Ltd. v Brown & Williamson Tobacoo Corp. 509 US 209 (1993).
36
Jonathan B Baker, ‘Predatory Pricing after Brooke Group: An Economic Perspective’ (1994) 62 Antitrust L.J.
585, 586.
37
Matsushita Electric Industrial Co. v Zenith Radio Corp. 475 US 574 (1986).
38
Cargill, Inc. v Monfort of Colorado, Inc. 479 U. S. 104, 117 (1986).
39
Richard Posner, Antitrust Laws, vol 3 (2nd edn, 2006) 2351.

conduct has to pursue a legitimate aim, be reasonable and proportionate to the threat posed by
its competitors.40
After the period of infancy comes the process of maturity and excuses for "promotional" or
"penetrative" pricing start veering.41 Several agencies stated that the discounts can be
anticompetitive if they effectively foreclose a large share of the relevant market42 and exclude
rivals as a substantial impediment to entry and/or expansion.43
b. Objective factors out of the control of the company.

Rutta 2.0 has fixed variables that could not be altered manually like in Rutta.
Since, all these 5 companies were using Rutta 2.0, which has certain fixed variables44. These
fixed variables could not be altered manually like in Rutta. Therefore there is a probability of
it leading to determine similar or parallel pricing. Therefore any synchrony in the prices
observed, can be arguably due to the Rutta 2.0 and not due to any collusion between the
parties.
Also, it is a necessity to use pricing algorithms like Rutta 2.0 in the today’s competitive
scenario as these algorithms provide benefits on both demand and supply side.
The rise of algorithms on the supply side can also promotes static efficiencies by reducing the
cost of production, improving quality and resource utilisation, as well as streamlining
business processes.45
On the demand side, they can assist in improving, refining or developing products and
services in a number of ways. Some e-commerce sites use past purchase information and
browsing history to make personalised shopping recommendations for users. 46
Similarly, the advanced version (Rutta 2.0) also had another special feature called as ‘Birds
Eye’ which is a web crawler software. Birds Eye program can analyse the traffic or searches
for a product on the leading world search engine ‘Jugaadu’. This would enable the e –
40
United Brands v Commission (1978) 3 C.M.L.R. 83.
41
MCX Stock Exchange Ltd. v National Stock Exchange of India Ltd. (2012) 2 CompLJ 473.
42
Greek Telecommunications Organization (OTE) v National Commission (2005) E.C.C. 2 (UK).
43
Napp Pharmaceutical Holdings L. v Director General of Fair Trading (2002) E.C.C. 13.
44
45
‘Algorithms and Collusion: Competition Policy in the Digital Age’ (Oecd.org, 2017)
<www.oecd.org/competition/algorithms-collusion-competition-policy-in-the-digital-age.htm.> accessed 19
January 2019.
46
Ibid.

commerce websites to understand the total market considerations before deciding the price
for a commodity.47
c. Efficiency gains.
Efficiency gains which has two aspects. Firstly, non-implication of some kind of inefficiency
i.e. socially undesirable wastes of economic resources,48 and Secondly, conformance with
public interest.49
In the Raghavan committee report50, it was stated that when the reduction in the prices of the
product is done with the intention of eliminating other firms, it should be prevented.
However, the restrictions should not prevent the firms capturing the larger market share due
to high efficiency and low prices. There should be a demarcating line between wilful
restrictions to eliminate competition and reduction in competition due to high-level efficiency
of the dominant firm.
In the instant case, all three categories are satisfied and the justification for reduced pricing is
to meet the competition.
1.2.THERE WAS NO AGREEMENT BETWEEN THE RESPONDENTS.

1.2.1. USING OF PRICING ALGORITHM PER SE IS NOT ANTI-COMPETITIVE.
Article 101 "does not deprive economic operators of the right to adapt themselves
intelligently to the existing and anticipated conduct of their competitors".51 "Every producer
is free to change his prices, taking into account in so doing the present or foreseeable conduct
of his competitors".52
Although algorithmic pricing is not illegal and is a common practice in many industries, it
was the existence of an agreement to jointly implement the algorithm that makes it
unlawful.53
In Trod Limited and GB Eye Ltd.54 the Competition and Markets Authority (the ‘CMA)
stated:
47
48
Weizsäcker, Barriers to Entry-A Theoretical Treatment (1st edn, Springer-Verlag Berlin Heidelberg 1980).
49
Haridas Exports v All India Float Glass Manufacturers Association (2002) 111 Comp. Cas. 617 (SC) .
50
Report of the High Level Committee on Competition Policy & Law, 2000.
51
Case 40/73 Suiker Unie v Commission [1975] ECR 1663.
52
Case 48/69 Imperial Chemical Industries (1972) ECR 619.
53
January 2019.

“5.47. Further, the CMA notes that repricing software used by the Parties to implement the
Infringing Agreement is normally used by online sellers to compete with other online sellers
by automatically adjusting the prices of their products in response to the live prices of
competitors’ products. However, in the present case the repricing software was configured by
the Parties to restrict price competition between them in order to give effect to the Infringing
Agreement”
In the case of U.S. v. David Topkins55, the US Department of Justice (DOJ) charged a seller
in the Amazon marketplace, David Topkins, of coordinating with other sellers for setting the
prices of posters through price algorithms. Although algorithmic pricing is not illegal and is a
common practice in many industries56, it was the existence of an agreement to jointly
implement the algorithm that made the case for the DOJ.
Therefore, in absence of any agreement between parties mere usage of pricing algorithm
between the parties is not per se anticompetitive.
1.2.2. THERE IS NO EVIDENCE OF AN‘AGREEMENT’.

The Respondents humbly contend that there is no evidence of concerted action or agreement
between the parties arising out of the investigation carried out by the Director General.57
Even the Director General has failed to put on record any other evidence of collusion apart
from the supposed price parallelism.
Even NCLAT came to conclusion that that DG’s report had appropriate conclusions and
“cartel cases cannot be prosecuted in the absence of direct evidence of anti-competitive
agreements between the parties.”58
To invoke the provisions of section 3 of the Act, the existence of an ‘agreement’ is sine qua
non.59It is therefore contended that the CCK has come to a conclusion after considering
merely one factor, namely, the parallelism in prices,60 which as mentioned above is
commonly acknowledged to be insufficient. In the absence of any other evidence in support
54
Trod Limited and GB Eye Ltd. Case 50223
55
US v David Topkins No. 15 Cr. 201 (N.D. Cal.).
56
January 2019.
57
58
59
In re: Alleged cartelization by steel producers 2012 Indlaw CCI 45.
60

of such an allegation, we humbly submit that the findings of the CCK were not in conformity
with legal standards and thereby erroneous.
1.2.3. BURDEN OF PROOF.

The term ‘agreement’, defined in § 2 (b) of the Act is any arrangement or understanding.61 In
the EU in some recent cases, like Bayer62 and Volkswagen63, the court disagreeing with the
EC’s expansive interpretation have effectively toughened the standards for proof.
Two main sources of evidence of concerted practice are: i. direct evidence of coordination64
ii. Indirect evidence of coordination which cannot be explained otherwise than by collision.65
Thus, an examination must always be made of whether the parallel conduct can be explained
by normal market conditions or must have been coordinated.66 It is submitted that the acts of
the respondents can very well be attributed to be a parallel behaviour which is not illegal per
se.67
A yardstick was laid down in the case of Hanuman v. State of Madhya Pradesh68 that;
“Circumstances should be of a nature such as to exclude every hypothesis but the one
proposed to be proved or to show that within all human probability they must have acted in
concert.” As was held in SA & Grundig,69 the probability and not merely possibility70 is
important. A cartel needs to be profitable since it is illegal and poses risks.71 Thus, the wider
the variations in the marginal gains, the less stable the cartel will be72 since the interest
diverges substantially and with the risk of cheating, it is effectively impossible.73
1.2.4. NO STRUCTURAL LINKS BETWEEN THE FIVE COMPANIES.

Economic links are prerequisite for proving existence of a cartelization agreement.74
Otherwise every firm in every market will be held to be cartelizing and such a reading would
61
Herbert Hovenkamp, Federal Antitrust Policy: The Law Of Competition (4th edn, 2011) 80.
62
Bayer v Commission 2000 ECR II-3383 (UK).
63
European Commission v Volkswagen [2006] ECR I-6585.
64
Polypropylene-Atochem 1991 ECR-II 1991 (UK).
65
In re SACEM III 1989 ECR 2521 (UK).
66
Polypropylene-Petrofina 1991 ECR II-1087 (UK).
67
Theater enterprises Inc. v Paramount Film Distributing Corp. 346 U.S. 537 (1948).
68
Hanuman v State of Madhya Pradesh AIR 1979 SC 798.
69
DP Mittal, Competition Law and Practice (3rd edn, 2011) 176.
70
SA & Grundig – Verkaufs – GmbH v Commission 1966 ECR 299 (UK).
71
Lennart Ritter and W David Braun, European Competition Law: A Practitioner’s Guide (3rd edn, 2005) 245.
72
Margret C. Levenstien, ‘What determines Cartel Success?’ (2006) 54 J. ECON. LIT. 43 86.
73
Herbert Hovenkamp, Federal Antitrust Policy: The Law Of Competition (4th edn, 2011) 80.
74
Joined cases T-68, 77 and 78/89 SocietaItalianaVietro [1992] ECR II-1403; Case T-102/96 Gencor v
Commission [1999] ECR II-753.

be against the interests of the economy and of the public. Economic links must be shown in
order to prove the joint nature of the companies implicated.75
It is submitted that there are no economic links between the companies which can help them
to enter into anti-competitive agreements. Trade associations do not ipso facto engage in an
unlawful restraint of commerce.76
1.3.THERE WAS NO APPRECIABLE ADVERSE EFFECT ON COMPETITION

1.3.1. NO EVIDENCE OF ADVERSE EFFECT ON COMPETITION
Appreciable Adverse Effect on Competition refers not to a particular list of agreements but to
a particular economic consequence77 that harms the competitors in the consumer welfare
sense of economies i.e. effect on price or output. It was held in the case of Mahindra &
Mahindra Ltd. v. Union of India78, that; “It is clear from the definition that it is only where a
trade practice has the effect, actual or probable, of restricting, lessening or destroying
competition that is liable to be regarded as a restrictive trade practice.” Further the “effect”
must be “appreciably” adverse79 as the principle of de minimis is the base. The word
appreciable has been defined in law lexicon as, “Capable of being estimated, weighted,
judged of, or recognized by the mind, perceptible but not a synonym of substantial.”80 There
are thus in this case, no Appreciable Adverse Effect on Competition but instead it has a
multitude of pro-competitive effects.
1.3.2. PRO-COMPETITIVE EFFECTS OF THE ALGORITHM.

Dynamic pricing algorithms have been implemented, for instance, by airlines, hotel booking
services and transportation network companies to efficiently adjust supply to periods of lower
or higher demand, resulting in pro-competitive effects.81 Similarly in the instant case, even
before implementation of Rutta or Rutta 2.0, there was a tough competition between all e –
commerce companies and their market share kept fluctuating.82 Post implementation of the
software, in the year 2015, the competition between e – commerce websites reached
75
Builders' Association of India v Cement Manufacturers' Association & Ors. 2016CompLR 983 (CCI).
76
Maple Flooring Manufacturers association et al v United States 268 US 563 (1925).
77
78
Mahindra & Mahindra Ltd. v Union of India (1979) 2 SCC 529.
79
80
SM Duggar, Guide to Competition Law and Policy (5th edn, 2010) 68.
81
January 2019.
82

aggressive levels in Kratos.83 The above facts clearly leads to the conclusion that Rutta and
Rutta 2.0 helped in strengthening the competition between e-commerce websites in Kratos.
1.3.3. CONSIDERATION OF FACTORS MENTIONED IN SECTION 19 (3)84.

a. Accrual of benefits to consumers.85
The availability of products at cheaper prices86 leads to the indication that the consumers
were indeed benefitted.
b. Improvements in production or distribution of goods or provision of services.87

As already mentioned, algorithm helped in improving, refining or developing products and
services in a number of ways on both demand and supply side.
c. Promotion of technical, scientific and economic development by means of production

or distribution of goods or provision of services.88
As already stated algorithm pricing which is an advance in technical field has various pro-
competitive effects.
d. Driving existing competitors out of the market.89

There were 7 major e – commerce sellers90 competing in the market, therefore it cannot be
said that existing competitors were drove out of the market.
e. Creation of barriers to new entrants in the market.91

The fact that there was constant increase in the number of e-commerce traders92 in the market
shows that there was no entry barriers in the market.
2. THE RIGHTS OF TRADERS HAVE NOT BEEN VIOLATED.

The Respondents humbly submit that the present suit is based upon a news report which is
unreliable [2.1]. The Appellants’ fundamental rights have not been violated [2.2]. Press Note
dated 26th December 2018 on Foreign Direct Investment Policy in the e-commerce sector
resolved any possible issue that may have been faced by the appellants [2.3] Furthermore, an
alternative remedy is also available to appellants [2.4].
83
84
85
Competition Act, s 19(3)(d).
86
Annexure 8, Moot Proposition.
87
Competition Act, s19(3)(e).
88
Competition Act, s 19(3)(f).
89
Competition Act, s 19(3)(b).
90
91
Competition Act, s 19(3)(a).
92

2.1.NEWS REPORT IS NOT ADMISSIBLE EVIDENCE.

The Respondents humbly submits that the present suit is based upon news report presented by
‘Tongue 24’ and does not have any other material on record to substantiate the suit.93 News
reports are hearsay evidence and thus, are not admissible piece of evidence94 under Indian
Evidence Act.95
The Competition Appellate Tribunal (COMPAT) has denied the admissibility of news report
in Lupin Limited case96, where it observed that “the so called information available in the
public domain could not have been used by the Commission because no one had appeared in
the witness box to prove the same.”
A news report that has no further proof of what actually transpired has zero evidentiary
value.97 Judicial notice of news items can be taken by the court if they are proved by evidence
aliunde.98 The details provided in the report need to be proved by the news channel with help
of sufficient evidence on record.99
No substantial material was provided to strengthen the validity of the news report and hence
the same is not admissible in the court of law.
2.2. NO VIOLATION OF FUNDAMENTAL RIGHTS.

2.2.1. FUNDAMENTAL RIGHTS CANNOT BE ENFORCED AGAINST PRIVATE
ENTITIES.
Fundamental Rights can only be enforced against ‘State’100. The term ‘State’ has been given
a wide interpretation by the judiciary101 to include all those institutions that discharge the
functions of state irrespective of whether they are created by the legislature or not.102
To come with the definition of ‘State’, the entity in question must be declared as an
instrumentality of State.103 Instrumentality of state is an entity that discharges an essential
93
94
R. P. Luthra v CBI 2014 Indlaw DEL 2951.
95
Indian Evidence Act, 1872.
96
Lupin Limited others v Competition Commission of India and others 2016 Indlaw COMPAT 34; Board of
Control for Cricket in India v Competition Commission of India and another 2015 Indlaw COMPAT 8.
97
Samant N. Balakrishna v George Fernandez (1969) 3 SCC 238; Oommen Chandy v State of Kerala and others
2016 Indlaw KER 599.
98
Laxmi Raj Shetty & Anr v State of Tamil Nadu 1988 Indlaw SC 69.
99
Khilumal Topandas v Arjundas Tulsidas 1959 Indlaw RAJ 26.
100
Constitution of India, art 12.
101
Ajay Hasia v Khalid Mujib (1981) 1SCC 722.
102
Zee Telefilms Ltd. v Union of India (2005) 4 SCC 649.

public function.104It is a settled principle that company does not come under the definition of
company.105
In the present suit, the respondents are private entities that do not discharge any public
function nor do they hold any statutory power106 therefore Fundamental rights cannot be
enforced against them. Any violation of fundamental rights by private entities needs to be
dealt by the general laws.107
2.2.2. NO VIOLATION
The Respondents humbly submit that there exists no violation of fundamental right of
appellants in the instant suit and any injury suffered by them is one which is suffered due to
fair competition and not due to any illegal conduct on part of respondents.
To constitute violation of Fundamental rights in the present case it is necessary to prove some
illegal act or else it will amount to wrongful prosecution.108 Mere injury, no matter how
severe, suffered when the other party was acting in accordance with the relevant law, cannot
amount to violation of fundamental rights.109
In defining offline retail and online retail markets it has been observed that buyers weigh the
options available in both markets before making a purchase. Thus both markets are,
essentially, different distribution channels of the same product; hence, part of a single
market.110
It has been established that e-commerce enterprises form a small part of entire retail market111
thus any such player cannot create any adverse effect on the market structure prevalent in
Kratos.112 In the present case none of the respondent companies have sufficient market
103
The Executive Engineer (State Of Karnataka) v K. Somasetty & Ors. 1997 Indlaw SC 996, (1997) 5 SCC
434.
104
M.C. Mehta v Union of India (1987) 1 SCC 395; Unni Krishnan, J.P. & Ors. v State of Andhra Pradesh &
Ors. 1993 AIR 217, 1993 SCR (1) 594.
105
S.K. Mukherjee v Chemical Allied Products AIR 1962 Cal 10, 65 CWN 1172, 1961 (3) FLR 404.
106
Kochuni K.K. v State of Madras 1960 AIR SC 1080.
107
P.D. Shamdasani v Central Bank Of India 1952 AIR 59, 1952 SCR 391.
108
Babloo Chauhan @ Dabloo v State Govt. of NCT of Delhi 247 (2018) DLT 31.
109
State of Punjab v Rafiq Masih (2015) 4 SCC 334; Chameli Singh v State of Uttar Pradesh AIR 1996 SC
1051, (1996) 2 SCC 549.
110
Ashish Ahuja v Snapdeal and Anr 2014 Indlaw CCI 42.
111
'E-Commerce Share Of Total Retail Sales By Country 2017' (Statista, 2018)
<https://www.statista.com/statistics/255083/online-sales-as-share-of-total-retail-sales-in-selected-countries/>
accessed 23 February 2019.
112
In Re: Mr. Mohit Manglani v M/s Flipkart India Private Limited & Ors. Case No. 80 of 2014(CCI).

share.113The current market structure does not allow a particular market player to emerge as a
dominant enterprise due to high substitutability between products and countervailing buying
power of consumers.114 In absence of the ability to direct market in their favor, the
respondents cannot be abstained from providing discounts to their consumers.115
In present case even though the respondent companies were able to increase their respective
share but they compete amongst themselves and continue to do so till date. Any pricing
strategy to meet the competition in the market cannot be treated as illegal116 unless intention
to drive out competitors is proved.117 It has to be noted, if market share increases
substantially but profits increase by a small margin due to discounting policy of the party and
economies of scale, then such conduct cannot be held violative of fundamental rights simply
because goods are sold at a price lower than that of its competitors118, unless done in a
manner that directly affects the public at large.119
The law does not allow imposition of cap on discounts offered120 if adopted to meet the
competition.121 On the other hand, any agreement which imposes minimum price for products
not only hinders the ability of dealers to compete on price of product122 but also harms the
consumers resulting in adverse effect on competition.123 Imposition of minimum resale price
is per se illegal.124
Exclusivity agreements between the respondents and producers do not amount to any
appreciable adverse effect on competition (“AAEC”) in Kratos as most of the products sold
via such arrangement face stiff competitive constraints and substitutes for the same are
readily available.125 Various features offered by respondents allow the buyers to compare
various products and thus improve the competition.126 The basic structure of competition act
113
¶ 4, Moot Proposition; MCX Stock Exchange Ltd v National Stock Exchange of India Ltd. 2011 SCC OnLine
CCI 52, 2011 Comp LR 0129 (CCI).
114
All India Online Vendors Association v Flipkart India Private Limited and Anr. Case No. 20 of 2018(CCI).
115
All India Online Vendors Association v Flipkart India Private Limited and Anr. Case No. 20 of 2018(CCI);
Fast Track Call Cab Private Limited and another v ANI Technologies Private Limited 2017 Indlaw CCI 48.
116
United Brands v Commission (1978) 3 C.M.L.R. 83 (UK).
117
In Re: Johnson And Johnson Ltd. (1988) 64 Comp Case 394 NULL.
118
Notice under sub-section (2) of Section 6 of the Competition Act, 2002 filed by Wal-Mart International
Holdings, Inc. Combination Registration No. C-2018/05/571
119
US v Aluminum Co of America (Alcoa) 148 F.2d 416 (2d Cir. 1945).
120
Fx Enterprise Solutions India Pvt. Ltd. & Anr.v Hyundai Motor India Limited 2017 Indlaw CCI 39.
121
Competition act, 2002, s 4(2) (a) (ii).
122
Jasper Infotech v Kaff Appliances 2019 Indlaw CCI 1.
123
Brooke Group Ltd v Brown and Williamson Tobacco Corporation 509 US 209 (1993).
124
Competition act, 2002, s 3(4) (e).
125
126
In Re: Mr. Mohit Manglani v M/s Flipkart India Private Limited & Ors. Case No. 80 of 2014(CCI).

allows for survival of the most competent player in the market.127 If a competitor is able to
best his counterparts because of better strategies then it is not for the court to assume that his
actions have been illegal.128
Any infringement or illegal act needs to be proved with the help of clear and cogent
evidence.129 Benefit of doubt should be given to the respondents to the extent the doubt can
stand130 and no adverse inference should be drawn by the courts towards the pricing strategies
of the Respondent companies.
Article 21 provides for protection of livelihood and does not impose any positive obligation
on state to provide livelihood to such people who have lost the same as a result of lawful
conduct of some other party.131
The conduct of the respondents in the present case was lawful and in response to the market
forces prevalent in the market. Therefore no adverse inference with regards to violation of
fundamental rights should be drawn.132
2.3.APPELLANTS NO LONGER POSSESS THE CAUSE OF ACTION.

The respondents humbly submit that the appellants no longer have sufficient cause of action
to contest the present suit. The present suit arose primarily because of lack of legislative
mandate over the activities of Marketplace entities. According to the doctrine of separation of
powers, High Court is not competent to decide on policy matters.133
In All India Footwear Manufacturers & Retailers Association v. Union of India petition134 a
petition was presented before Delhi High Court where brick-and-mortar retailers have alleged
that e-commerce sites are offering heavy discounts which amounts to violation of
Fundamental Rights of such “brick and mortar” retailers. Before the matter could be decided
127
Brooke Group Ltd v Brown and Williamson Tobacco Corporation 509 US 209 (1993).
128
Accreditation Commission for Conformity Assessment Bodies Private Limited v Quality Council of
India/National Accreditation Board For Certification Bodies and others 2012 Indlaw CCI 62.
129
Neeraj Malhotra v North Delhi Power Ltd. (2011) 3 SCC 436; Naap Pharmaceuticals Holdings v Office of
Communications (2002) CAT 1; In re JFE Engineering (2004) ECR II-2501 (UK).
130
Dinesh Bulakhi Harijan v The State 2009 CriLJ 114.
131
Delhi Development Horticulutre Employees’ Union v Delhi Administration AIR 1992 SC 789; Benilal v State
of Maharashtra 1995 Supp (1) SCC 235; Indian Drugs & Pharmaceuticals Ltd. v Workmen, Indian Drugs &
Pharmaceuticals Ltd. (2007) 1 SCC 408.
132
Dish TV v Prasar Bharti Case No. 44 of 2010(CCI).
133
RC Cooper v Union of India 1970 AIR SC 564; Peerless General Finance and Investment Company v Union
of India (1992)2 SCC 343; Bhavesh D Parish v Union of India (2000) 5 SCC 471; Ekta Shakti Foundation v
Govt. of NCT Delhi (2006) 10 SCC 337; Manohar Lal Sharma v Union of India (2013) 6 SCC 616.
134
All India Footwear Manufacturers & Retailers Association v Union of India W.P. (C) 7479/2015; Retailers
Association of India v Union of India W.P. (C) 5034/2015.

the petitioners, due to clarification issued by the Government of India vide Press Note
3(2016)135, choose to withdraw from the petition.136
In the instant suit appellants have made similar allegations with regards to the pricing policy
of respondents.137 The Press Note dated 26th December 2018 dealing with Foreign Direct
Investment (FDI) policy is the same clarification that has been mentioned in the above
case.138
The FDI policy has amended paragraph 5.2.15.2 (e-commerce activities) of the current
'Consolidated FDI Policy' of the DIPP to incorporate the following:
1. Entities using Marketplace platform are not to exercise control over the inventory of
other enterprise or make more than 25% of the sales on the platform from such
enterprise or its ‘group companies’.139 Marketplace entities are further barred from
equity participation in any of the sellers on its platform.140 Marketplace entities used
to create/ invest in companies which in turn acted as wholesalers. They had huge
buying power therefore got better discounts from producers which reflected in the
prices offered by marketplace entities. New FDI policy prohibits this conduct. This
enables the brick and mortar retailers to attain equal footing in terms of disposable
resources.
2. Marketplace entities are barred from using unfair and discriminatory pricing. This
includes, but not limited to, restrictions on discounts and cashbacks offered on certain
products. Any discount offered on product of one seller also needs to be incorporated
in the products of other sellers as well.141
3. No marketplace entity is allowed to enter into exclusive agreements with any
enterprise for sale of products on marketplace platform.142 This enables the sellers to
list their product on more than one marketplace thereby allowing such products more
market exposure. This increases the sales of such vendors due to economies of scale.
135
Press Note 2 (2018) by DIPP.
136
137
138
139
¶5.2.15.2.4 (iv), Press Note 2 (2018) by DIPP.
140
¶5.2.15.2.4 (v), Press Note 2 (2018) by DIPP.
141
¶5.2.15.2.4 (ix), Press Note 2 (2018) by DIPP.
142
¶5.2.15.2.4 (xi), Press Note 2 (2018) by DIPP.

There exist no violation of fundamental rights in the existing case and any discrepancy
arising out of lack of legislative mandate has already been remedied by the Press Note No. 2
(2018). Due to the aforementioned reasons appellants have no cause of action left to contest
the present suit.
2.4.ALTERNATE REMEDY IS AVAILABLE WITH THE APPELLANTS.

The respondents humbly submit that there exists an alternative remedy in the present suit. It
is an established legal principle that to seek a relief under Article 226 of the Constitution of
India, the petitioner has to exhaust all the alternative remedies available to him143. The reason
for this is two-fold: first, to reduce the increasing pendency of cases144 and second, to inspire
faith in the hierarchy of Courts and the institution as a whole.145
In presence of a statutory redressal forum, High Court is not to entertain any petition
presented before it by-passing such statutory remedy.146 If a right or liability is created by a
statute, then it is essential to resort to the statutory remedy provided therein for the
enforcement of the right or the liability before invoking the extraordinary and prerogative
writ jurisdiction of the High Court.147
The Apex Court in Thansingh Nathumal v Supdt of Taxes148 held that “a High Court shall not
entertain a writ petition, where the petitioner has an alternative remedy, which without being
unduly onerous provides an equally efficacious remedy.”
It is the duty of High Court not to entertain the petition and relegate the petition to
appropriate form.149 Supreme Court has issued strict instructions to High Court to exercise
the extraordinary jurisdiction, vested in them by virtue of Article 226, with great caution.150
143
Union of India v T.R.Varma AIR 1957 SC 882; Municipal Council Customs v Shanti Lal AIR 1966 SC 197;
Vali Pero v Fernando Lopez (1989) 4 SCC 671.
144
PN Kumar v Municipal Corp of Delhi 1988 SCR (1) 732.
145
Kanubhai Brahmbhatt v State of Gujarat AIR 1987 SC 1159.
146
Commissioner of Income Tax v Chhabil Dass Agrawal (2014) 1 SCC 603; Nivedita Sharma v Cellular
Operators Association of India 2011 14(SCC) 337; Bela Rani Bhattcharyya v Union of India 2014 Indlaw DEL
3601; 2014 (213) DLT 1.
147
Commissioner of Income Tax and Ors. v Chhabil Dass Agarwal (2014) 1 SCC 603.
148
Thansingh Nathumal v Supdt of Taxes AIR 1964 SC 1419.
149
Mina Perween v The State Of West Bengal & Ors MAT 515 of 2018; U.P. State Bridge Corporation Ltd And
Others v U.P. RajyaSetu Nigam S. KaramchariSangh (2004) 4 SCC 268.
150
United Bank of India v Satyawati Tondon (2010) 8 SCC 110; State of Goa v A.H. Jaffar and Sons Asstt. AIR
1995 SC 333; Collector, C.E., Chandan Nagar v Dunlop India Limited AIR 1985 SC 330; Uttaranchal Forest
Development Corporation v Jabar Singh (2007) 2 SCC 112; U.P v U.P Rajya Khanij Vikas Nigam S.S 2008 (9)
Scale 1

Even During the final hearing, it is open to the Court to dismiss the Writ Petition on the
ground of alternative remedy, notwithstanding the issuing of Rule Nisi.151
In the present suit, the allegations put forth by the appellants do not invoke the extraordinary
jurisdiction vested within the High Courts.152 The present suit arises out of alleged anti-
competitive activities of respondents.153 The regulation of fair trade in the state of Kratos lies
with Competition Commission of Kratos154 which is also the competent tribunal in the
present case.
The respondents humbly submit before the honorable court that there exists no violation of
fundamental rights in the present suit. High Court or Supreme Court is not the appropriate
tribunal to deal with the issues at hand in presence of statutory remedy available with the
appellants.
3. THE RESPONDENTS ARE NOT HOLDING COLLECTIVE DOMINANT

POSITION AND HAVE NOT VIOLATED THE PROVISIONS OF THE ACT.
The Respondents humbly submit before the Hon’ble Court that the Premier, Moneykart and
Chapo are not holding collective dominant position, and thus, have not violated the
provisions of the Competition Act as there is no concept of collective dominance in Kratos
Competition law [3.1]therefore, by holding them liable CCK has acted outside its scope of
power[3.2]and Respondents are not holding collective dominant position in the relevant
market.[3.3].In addition, the agreements between respondents and ISP’s have pro-competitive
justification.[3.4]
3.1.NO CONCEPT OF COLLECTIVE DOMINANCE AS PER KRATOS

COMPETITON LAW
The Respondents humbly submit that two or more enterprises cannot hold dominant position
at the same time in a particular relevant market as per Kratos Law.155
151
Nivedita Sharma v Cellular Operators Association of India 2011 14(SCC) 337.
152
P.V. Surender Babu v Prohibition & Excise Supdt. Chittoor 1998 (5) ALD 549.
153
154
155
Jyoti Swaroop Arora v. Tulip Infratech Ltd. 2015 CompLR 109 (CCI); Sanjeev Rao v Andhra Pradesh Hire
Purchase Association Case No. 49 of 2012(CCI); Shri Sonam Sharma v Apple, Vodafone, Airtel & Ors. 2013
CompLR 346 (CCI).

Same was observed by the commission in Royal Energy Ltd v. IOCL156where it was held that
the concept of collective dominance is not envisaged under Section 4 of the Competition Act.
In In Re: Dish TV India Limited case157, the commission found out that appraisal of Section 4
and 5 makes is abundantly clear that Competition Act, 2002 covers dominance of one
enterprise or a group of enterprises. The word “group” as referred in section 4 of the Act does
not include or refer to a group of independent entities or enterprises.
The Commission in the case of Consumer Online Foundation Informant v. Tata Sky
Limited158 covered the aspect of ‘collective dominance’ and observed:
“It further observed that Indian law does not recognize collective abuse of
dominance as there is no concept of “collective dominance‟ which has
evolved in jurisdictions such as Europe.”
The Commission has on more than one instances found that the concept of collective
dominant position is not applicable to Indian cases.159
Therefore, DG has rightly concluded that collective dominance is neither present nor possible
according to Indian law.160
Therefore, as per Kratos Law, collective dominance is not possible.
3.2.CCK HAS ACTED OUTSIDE ITS SCOPE OF ITS POWER.

3.2.1. JUDICIARY CANNOT LEGISLATE
Since, the Competition Act161 talks about abuse of dominance by single firm then, by holding
the companies liable for abuse of collective dominance , CCK has acted outside its scope of
power of judiciary, ‘interpretation of Statute’ and has encroached upon the territory of
legislature.
Classical positivist jurisprudence created by the 19th century English jurists Bentham and
Austin, and developed in the 20th century by Hart, Kelsen and others, taught that law making
156
Royal Energy Ltd v IOCL and others 2012 CompLR 563 (CCI).
157
Dish TV India Ltd v Hathway Cable & Datacom Ltd 2014 Indlaw CCI 20.
158
Consumer Online Foundation v Tata Sky Limited & Ors. 2011 Indlaw CCI 12.
159
Indian Sugar Mills Association v Indian Jute Mills Association 2014 CompLR 225 (CCI); M/s Royal Energy
Ltd. v M/s Indian Oil Corporation Ltd. & Ors. 2012 CompLR 563 (CCI); Manappuram Jewellers Pvt. Ltd. v
Kerala Gold & Silver Dealers Association 2012 CompLR 548 (CCI).
160
161
Competition Act, 2002, s 4.

is the task of the legislature, not the judiciary.162 The latter’s job is only to interpret the law
made by the legislature, and direct its enforcement.163In England, this principle was strictly
enforced because there was no written constitution, and parliament was supreme. Hence law
making by judges would violate the principle of parliamentary supremacy.164
In the case of Divisional Manager Aravali Golf Course v. Chander Haas165, a bench of
Justice A.K. Mathur and Justice Markandey Katju wrote a detailed judgment saying that there
is separation of powers in the constitution between the three organs of the state, and one
organ should not ordinarily encroach into the domain of another, otherwise there will be
chaos. If there is no law judges cannot enforce it.166
3.2.2. NON ENFORCEMENT OF A LAW

An Act cannot be said to be passed unless it is passed by both the houses of parliament and
signed by the president. In order to enforce an Act a further step of its publication has to be
taken167. The concept of promulgation revolves around two principles. Firstly, it is to provide
the parties which are going to be affected by the said legislation an opportunity of being
heard as provided by the Principle of Natural Justice, Secondly, according to the maxim
ignorantia juris non excusat‘(i.e. ignorance of law is no excuse) and according to this rule no
person can claim the ignorance or him not knowing the law as an excuse. But this can be
applied only when the public were made aware of the existence of such law and this can be
done by the means of publication hence Publication of Legislation has evolved and is
regarded as a mandatory rule168.
In Mahabir Coke Industry v. PCB169, an order was passed by Pollution control board to close
down the industries. Appellant contended that no standards for emission were prescribed by
the boards and in absence of such standards the order for closure is illegal. The court found
that no standards were prescribed under Section 17(1)(g) of the act thus no fault can be found
on part of the industry.
162
Jeremy Waldron, ‘Separation of Powers in Thought and Practice’ (2013) 54 B.C.L. Rev. 433
<http://lawdigitalcommons.bc.edu/bclr/vol54/iss2/2> accessed 12 January 2019.
163
Markandey Katju, 'Can Judges Legislate? The Supreme Court Sets The Record Straight.' (The Wire, 2018)
<https://thewire.in/law/can-judges-legislate-the-supreme-court-sets-the-record-straight> accessed 12 January
2019.
164
Magor and St Mellons RDC v Newport Corporation [1951] 2 All ER 839.
165
Divisional Manager Aravali Golf Course v Chander Haas 2008 (3) JT 221.
166
Indian Drugs & Pharmaceuticals Ltd. v The Workman of Indian Drugs & Pharmaceuticals Ltd. (2007) 1
SCC 408; S.C. Chandra and Ors. v State of Jharkhand and Ors. JT 2007 (10) 4 SC 272.
167
Harla v The State Of Rajasthan 1951 AIR 467, 1952 SCR 110.
168
Cantonment Board, Dinapore v Taramani AIR 1995 SC 61, 1992 Supp (2) SCC 501.
169
Mahabir Coke Industry v PCB AIR 1998 Gau 10.

In S. Khushboo v. Kanniammal170 Supreme court has held that a person cannot be tried for an
alleged offence unless the legislature has made it punishable by law and it falls within
definition of offence. Similarly, When Act171 does not provide for abuse of collective
dominance as an offence, Respondents should not be held liable.
Moreover, The Competition (Amendment) Bill, 2012172 was introduced to include the
concept of collective dominance by amending section 4(1)173 to include words "jointly or
singly". The bill has not been passed in the either of the house of parliament, therefore it
cannot be enforced.
3.2.3. STRICT INTERPRETATION.

Maxwell in The Interpretation of Statutes (12th Edn) says: “The strict construction of penal
statutes seems to manifest itself in four ways: in the requirement of express language for the
creation of an offence; in interpreting strictly words setting out the elements of an offence; in
requiring the fulfillment to the letter of statutory conditions precedent to the infliction of
punishment; and in insisting on the strict observance of technical provisions concerning
criminal procedure and jurisdiction."174
Relying upon the landmark case of State of West Bengal v. Swapan Kumar Guha175 where the
court observed that a penal statute should be constructed strictly and in case of doubt, the
construction favorable to the subject should be preferred.The Competition Act talks about
abuse of dominance by single firm then, by holding the companies liable for abuse of
collective dominance is against the rules of interpretation.
3.3. NO ABUSE OF DOMINANT POSITION.

Respondents do not hold a dominant position in the relevant market of e-wallets, credit
card/debit card payment options, net banking and cash on delivery and thus have not
abused its position.
170
S. Khushboo v Kanniammal AIR 2010 SC 3196.
171
172
The Competition (Amendment) Bill, 2012.
173
174
R. Klayani v Janak C Mehta 2008 (14) SCALE 85.
175
State of West Bengal v Swapan Kumar Guha AIR 1982 SC 949.

3.3.1. RELEVANT MARKET

DG was right in applying the SSNIP test for determining relevant market as market for e-
wallets, credit card/debit card payment options, net banking and cash on delivery in Kratos.176
The respondents humbly submit that they are included in the relevant market of ‘market for
e-wallets, credit card/debit card payment options, net banking and cash on delivery in
Kratos.’
Market place is the place of operation between the parties in trade with each other.177 The
relevant market is the area of effective competition.178 In Kali & Salz179 it was held that to
access whether the alleged market player has a dominant position or not the primary
requirement is to define the relevant market. Section 19(5)180 provides that to define relevant
market, its two facets need to be established- Relevant Product Market and Relevant
Geographical Market. In A.K. Jain (OP) v. The Dwarkadhis Projects (P) Ltd.181 The plaintiff
was alleged with abusing its dominant position but the commission was of the view that the
plaintiff was not holding dominant position182 in the established relevant market and hence
was not liable.183
a) Substitutability
While defining the relevant product market under Section 2(t)184 of the Act, all those products
or services which are regarded as interchangeable or substitutable by the consumer, by reason
of characteristics of the products or services185, their prices186 and intended use187, need to be
included in the realm of relevant product market. The products, to be a part of the same
176
177
Kailash Suneja v Appropriate Authority (1998) 231 ITR 318 (Del).
178
Standard Oil Co. of California and Standard Station Inc. v US 337 US 293.
179
Joined Cases C-68/94 and C-30/95 Kali & Salz [1998] ECR I-1375; Airtours Plc v. Commission, Case T-
342/99, [2002] ECR II-2585, ¶19; NVV v. Commission Case T-151/5, [2009] ECR II-1219; Volkswagen AG v
Commission of the European Communities [2000] ECR II-2707.
180
Competition Act, 2002, s 19(5).
181
A.K. Jain (OP) v The Dwarkadhis Projects (P) Ltd. 2015 CompLR 487 (CompAT).
182
R. Ramkumar v Akshaya Private Limited 2017 Indlaw CCI 71.
183
Rishi Keshwani v Kanti Traders 2017 Indlaw CCI 61.
184
Competition Act, 2002, s 2(t).
185
Competition Act, 2002, s 19(7)(a).
186
Competition Act, 2002, s 19(7)(b).
187
Commission Notice on the definition of the Relevant Market for the purposes of Community Competition
Law OJ 1997 C372.

market, need not be perfect substitutes.188It is also necessary to determine the category of
clients who require such goods/services.189
Further, Telefonica case190held that “from a demand-side perspective, P2P payments services
through a digital wallet are interchangeable with traditional online banking or off-line
transactions. In particular, the market investigation provided indications that in Spain there
are already a number of mobile/online P2P payment applications which are offered to
consumers to carry out transactions with end-users, and which are substitutable with
traditional online payments, such as money transfers, or direct debit.” Therefore E –wallets
is substitutable with traditional online payment system.
E-wallets can be used to buy goods and services online based on value of money that is
stored on each such instrument.191 They need to be loaded with money before
usage.192However, the nature of service remains same as that of mode of payment on e-
commerce market193 and moreover, consumers perceive it as an alternative to other modes of
payment on e-commerce website.194 Moreover, in a market where there is substitutability
between e – wallets, credit card/debit card payment options, net banking and cash on
delivery, each can effectively present a competitive constraint since they have a lot of the
same characteristics as others such as ease of payment and carrying out transaction etc.195
The presence of these characteristics means that credit card/debit card payment options, net
banking and cash on delivery are capable of being substituted with e – wallets.196
b) Similar Physical characteristics & end use of goods

As can be observed from the case of Magnus Graphics197the commission observed that both
the parties used label printers that appeared comparable to each other but market cannot be
188
Arshiya Rail Infrastructure Limited v Ministry of Railways 2012 Indlaw CCI 25; British Airways v
Commission [2003] ECR II-5917; Kish Glass v Commission [2000] ECR-II 1885; Clearstream v Commission
General Court [2009] ECR II-3155.
189
Hugin v Commission [1979] E.C.R. 1869.
190
Case No COMP/M.6956 - TELEFONICA/ CAIXABANK/ BANCO SANTANDER / JV.
191
Master Direction on Issuance and Operation of Prepaid Payment Instruments, Art 2.3.
192
Master Direction on Issuance and Operation of Prepaid Payment Instruments, Art 7.
193
Guidance on the Commission’s Enforcement Priorities in applying (Article 102 TFEU) to Abusive
Exclusionary conduct by Dominant Undertaking. [2009] OJ C45/7; Fast Track Call Cab Private Limited and
another v ANI Technologies Private Limited 2017 Indlaw CCI 48.
194
Aberdeen Journals v Director General of Fair Trading CAT 4 [2002] Comp AR 167.
195
Robert Pitofsky, ‘New Definitions of Relevant Market and the Assault on Antitrust’ (1990) 87 COLOMBIA
LAW REVIEW 1805,1807.
196
B A K, ‘The Role of Supply Substitutability in Defining the Relevant Product Market’ (1979) 65 VIRGINIA
LAW REVIEW 129, 132.
197
Magnus Graphics v Nilpeter India Pvt. Ltd. 2015 CompLR 93 (CCI).

confined to a specific model only, though they used different technologies198 the end-use of
goods was the same. E-wallet services are perceived as substitutes by the common customers
intending to purchase products from e-retailers thereby placing it in the same relevant product
market.199 If two enterprises produce differentiated products but such products are perceived
by the consumers as close substitutes then both of such products will constitute same relevant
product market.200
The relevant geographic market is the area in which the undertakings concerned is involved
in the supply of relevant products or services where the conditions are homogenous.201
Relevant Geographical Market is the specific area in which conditions of competition are the
same. Section 19(6) lays down the factors for determining “relevant geographical market”
such as regulatory trade barriers202, local specification requirements203, language204, consumer
preferences205 etc. The Act provides that “all or any of the following factors” can be taken
into regard while determining the relevant geographical market. In the present suit all the
payment methods are operable across Kratos; hence the relevant geographic market stands as
Kratos.
The respondents humbly submit that the relevant market in the present case is ‘market for e-
wallets, credit card/debit card payment options, net banking and cash on delivery in Kratos.’
3.3.2. NO DOMINANCE IN THE RELEVANT MARKET

The Respondents humbly submit that Premier, Moneykart and Chapo are not in dominant
position as, none of the factors stipulated under Section 19(4) conclude dominant position in
the instant case.
a) Less Market Share under 19(4)(a)
198
Quadrant EPP Surlon India Ltd. v INA Bearings India Pvt. Ltd. 2013 CompLR 664 (CCI).
199
Willy Alexander, 'Europemballage Corporation and Continental Can Co. Inc. v. Commission of the European
Communities. Case 6/72. Decision of February 21, 1973' (1973) 10 Common Market Law Review, Issue 3, pp.
311–318
200
Global Tax Free Traders v William Grant & Sons Limited 2015 CompLR 503 (CompAT).
201
ANI Technologies Pvt. Ltd. v. Fast Track Call Cab Pvt. Ltd. (2015) 131 SCL 240 (CCI).
202
Competition Act, 2002, s 19(6)(a).
203
Competition Act, 2002, s 19(6)(b).
204
Competition Act, 2002, s 19(6)(f).
205
Competition Act, 2002, s 19(6)(g).

Since In the instant case, Premier, Moneykart and Chapo were collectively holding 75% of
the market share only in Kratoian e-wallet segment.206 But relevant market would also
include credit card/debit card payment options, net banking and cash on delivery. Thus, their
share as considered in the whole relevant market of e-wallets, credit card/debit card payment
options, net banking and cash on delivery would be much less taking into consideration that
respondents did not/ have any other product in the relevant market except e –wallets.
Moreover, market shares of an entity is ‘only one of the factors that decides whether an
enterprise is dominant or not, but that factor alone cannot be decisive proof of
dominance.207Therefore, that respondent’s insignificant market share in the relevant market
for e-wallets, credit card/debit card payment options, net banking and cash on delivery in
Kratos concludes their weak market strength.
b) Size and resources of the enterprise208, under Section 19 (4) (b)

Financial Strength of an enterprise can be calculated on the basis of its Assets and
Liabilities.209 In order to establish dominant position, superior financial strength of an
enterprise should be shown. In M/s HT Media v. Super Cassettes Industries Limited210, The
Commission, held that “the superior financial strength in the market coupled with superior
resources as in this case is an important indicator of dominance of an enterprise”. In the
instant case there was no indication of financial strength of Respondent companies, and in
that case there cannot be presumption of any superior financial strength.
c) No Entry barrier under 19(4)(h)

A vertical integrated firm may have assured access to scarce inputs or distribution system,
which entrants would have difficulty obtaining. Vertical integration may be potentially pro-
competitive. It may be anti-competitive only if brought about by a refusal to deal with
independent distributors.211 Since in the instant case, there were many other ISPs in the
market leading to ample amount of internet supply thus, there was no hindrance for the new
or existing competitor to enter or survive in the market.
3.3.3. NO ABUSE UNDER THE PROVISIONS OF COMPETITION ACT

a) No Abuse under 4(2)(c) & 4(2)(d) of the Competition Act
206
207
Mr. Ramakant Kini v L.H. Hiranandani Hospital 2014 Indlaw CCI 79.
208
Competition Act, 2002, s. 19(4)(b).
209
Belaire Owners’ Association v DLF Limited, HUDA & Ors. [2011] 104 CLA 398 (CCI).
210
M/s HT Media v Super Cassettes Industries Limited 2014 Indlaw CCI 74.
211
SM Duggar, Guide To Competition Law and Policy (5th edn, 2010).

When the agreement did not suggest any clause of exclusive dealing with the appellant nor
did it spell out any loyalty clause, - restricting choice, access to competing suppliers212, It
cannot be treated as an infringement of provisions of 4(2)(c).213 Similarly in the instant case,
when there is no such exclusivity clause mentioned in their respective special agreements. No
allegation of hindering the competitors to enter or survive into market by denial of market
access can be sustained.
Furthermore, COMPAT in the Schott Glass case214 has concluded that merely because the
NGC and NGA were product from common tank and because same were being marketed by
same appellant, did not mean that the appellant was insisting on any tying-in arrangement in
respect of NGC and NGB tubes. Thereby exonerating Schott glass of sec. 4(2)(d) charges.
Similarly no such presumption of tie-in agreements could be adopted in the instant case
solely on the basis that e-commerce website and its e- wallets belong to the Respondents.
3.4.PRO-COMPETITIVE JUSTIFICATION215
Assuming but not conceding that, there was an exclusive agreement between the Respondents
and ISP’s, yet it’s not an abuse as it has Pro-competitive justification.
There are various pro-competitive effects of these agreements.216 Any adverse effects on
competition are outweighed by the substantial procompetitive benefits of
exclusivity.217According to EC law, the dominant firm must prove that likely efficiencies
outweigh the likely negative effect and, that the conduct does not eliminate effective
competition.
Further, in the TELCO218 dispute, the SC had emphasized on efficiency of such agreements
and held:
“The exclusive dealings of the appellant do not impede competition but promote it. Such
dealings lead to specialization and improvement in after-sales service. The exclusive
dealership agreements do not restrict distribution in any area or prevent competition. By
making its dealers exclusive, it cannot be said that there is prevention, distortion or
restriction of competition in the territory in which the dealer operates. Any manufacturer of
212
Schott Glass India Pvt. Ltd. v CCI 2014 CompLR 295 (CompAT).
213
214
Schott Glass India Pvt. Ltd. v CCI 2014 CompLR 295 (CompAT).
215
Clorox Co. v Sterling Winthrop, Inc. 117 F.3d 50, 56 (2d Cir.1997).
216
Abir Roy and Jayant Kumar, Competition Law in India (2nd edn, 2014).
217
Gilbarco, 127 F.3d at 1163.
218
TATA Engineering & Locomotive Co. Ltd. v Registrar of Restrictive Trade Practices [1977] 2 SCR 685.

vehicle similar to those of the appellant is also free to appoint dealers of its choice in the
same territory covered by the appellant’s dealers.”
Moreover, when an enterprise enters into any contract to avoid disruptions in supplies219 and
to ensure continuance of its operations. It is not considered an abuse.
Applying the above mentioned precedents in the instant case, Even if Respondents have
entered into special agreements with ISPs . It was for priority bandwidth and uninterrupted
supply of internet. Which is not an abuse. Moreover, these arrangement do not restrict
competition in the market, as there are many other ISPs in the market. Thus, other e-wallets
are free to get into such special agreements.
In addition, it may lead to incentives for exclusive distributors to focus their sale efforts on a
particular brand, thereby leading to increased investments and an enhanced brand image.220
The application of exclusive distribution helps create and maintain a brand image by
imposing a certain measure of uniformity and quality standardization, thereby increasing
attractiveness of the product to the final consumer and increasing its sale
potential.221Exclusive agreements also ensure a steady, reliable outlet of supply for a
manufacturer to enable him to make investments thereby increasing product’s efficiency and
ensure scale economies.222
Similarly, in the instant case, Respondents by good intention had entered into special
agreements for priority bandwidth and uniform internet supply to maintain its brand
reputation. Hence, it is obvious that the special agreement entered with ISPs has pro-
competitive justification leaving no room for any doubt.
Therefore, it can be deduced that the respondents are not involved in cartelisation as neither
any agreement nor appreciable adverse effect on competition is there. Further, the stand of
MTU in the high court is not sustainable as their fundamental rights were not violated and in
that case an alternative remedy is also available. Moreover FDI policy has also resolved any
possible issue. Furthermore, CCK’s decision in holding respondents liable for abuse of
collective dominant position is erroneous as Kratos Competition Act does not provide this
conduct to be an offence In addition, the agreements between respondents and ISP’s have
pro-competitive justification.
219
Explosives Manufacturers Welfare Association v. Coal India Limited, 2012 CompLR 525 (CCI).
220
Guidelines on Vertical Restraints OJ C 130.
221
Guidelines on Vertical Restraints OJ C 130.
222
Ibid.

PRAYER
WHEREFORE, in the lights of, issues raised, arguments advanced and authorities cited, it is
most humbly and respectfully prayed that this Hon'ble court may be pleased to adjudge and
declare that:
1. Appeals should be dismissed.

2. There is no cartel between Premier, Brahmaputra, Moneykart, Chapo and Mahjong.
3. Rights of small traders have not been violated.
4. There was no abuse under Section 4.
The court may also be please to pass any other order, which this Hon'ble Court may deem fit
in the light of justice, equity and good Conscience.
All of which is most humbly prayed.
Sd/-
Counsel for the Respondents.

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TEAM CODE: 008

2nd TNNLU – CCI NATIONAL MOOT COURT COMPETITION, MARCH 2019

CIVIL APPEAL NO. ______/2019

MADRASAPATNAM TRADERS UNION…….....………………..……………APPELANT

MEMORANDUM ON BEHALF OF THE RESPONDENTS

MEMORANDUM ON BEHALF OF RESPONDENTS i

MEMORANDUM ON BEHALF OF RESPONDENTS ii

15. Bayer v Commission 2000 ECR II-3383 (UK). 7

MEMORANDUM ON BEHALF OF RESPONDENTS iii

37. Delhi Development Horticulutre Employees’ Union v Delhi 13

MEMORANDUM ON BEHALF OF RESPONDENTS iv

59. In re, Flat Glass 385 F.3d 360 (2004). 1

MEMORANDUM ON BEHALF OF RESPONDENTS v

84. Mahabir Coke Industry v PCB AIR 1998 Gau 10. 18

MEMORANDUM ON BEHALF OF RESPONDENTS vi

108. R. Ramkumar v Akshaya Private Limited 2017 Indlaw CCI 71. 20

MEMORANDUM ON BEHALF OF RESPONDENTS vii

131. Trod Limited and GB Eye Ltd. Case 50223. 5

MEMORANDUM ON BEHALF OF RESPONDENTS viii

 Garner Bryan, Black's Law Dictionary (9th ed., 2009)

MEMORANDUM ON BEHALF OF RESPONDENTS ix

AIR All India Reporter

AVC Average Variable Cost

CCI Competition Commission of India

CCK Competition Commission of Kratos

CompLR Competition Law Journal

ECR European Commission Reporter

HUDA Haryana Urban Development Authority

L.J Law Journal

TFEU Treaty on Functioning Of European Union

u/s Under Section

MEMORANDUM ON BEHALF OF RESPONDENTS x

MEMORANDUM ON BEHALF OF RESPONDENTS xi

CASE NO. RELEVANT FACTS LEADING TO CAUSE OF ACTION

MEMORANDUM ON BEHALF OF RESPONDENTS xii

ISSUE 1: WHETHER RESPONDENTS ARE INVOLVED IN CARTELISATION?

ISSUE 2: WHETHER RIGHTS OF THE TRADERS HAVE BEEN VIOLATED?

ISSUE 3: WHETHER RESPONDENTS ARE LIABLE FOR ABUSE OF DOMINANT

MEMORANDUM ON BEHALF OF RESPONDENTS xiii

It is humbly submitted before this Hon'ble Court that-

1. Respondents are not involved in cartelisation.

2. Rights of traders have not been violated.

3. There was no abuse under section 4 of the Competition Act, 2002.

MEMORANDUM ON BEHALF OF RESPONDENTS xiv

1. THE RESPONDENTS ARE NOT INVOLVED IN CARTELISATION.

Parallel pricing if pursued independently5 as a response to the foreseeable conduct of

1.1.PRICE PARALLELISM IS NOT PER SE ANTI-COMPETITIVE.

Price parallelism can be considered to be conclusive proof of cartelization if it constitutes the

MEMORENDUM ON BEHALF OF RESPONDENTS xv

1.1.1. PRICE PARALLELISM IS NOT CONCLUSIVE PROOF OF CARTELIZATION

Interdependence between firms is an important characteristic of an oligopolistic market22 and

It is therefore important to distinguish between rational, independent parallelism and that

MEMORENDUM ON BEHALF OF RESPONDENTS xv

1.1.2. LEGITIMATE JUSTIFCATION FOR PARALLEL PRICING.

a) Legitimate business behaviour, includes “competition on the merits”31 and “defence

a. Legitimate business behaviour.

MEMORENDUM ON BEHALF OF RESPONDENTS xv

b. Objective factors out of the control of the company.