DR.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY, LUCKNOW
2021-2022

FINAL DRAFT: Corporate Law

Topic: MEMORIAL ON BEHALF OF INFORMANTS – COMPETITION LAW

SUBMITTED BY: SUBMITTED TO:

KARTIKAY AGARWAL Dr. Visalakshi Vegesna
ROLL NO. 190101079 (SECTION A, 2024) ASSOCIATE PROFESSOR
(LAW)
B.A. LLB (HONS.), SEMESTER VI Dr. RMLNLU, LUCKNOW
 MEMORIAL ON BEHALF OF INFORMANTS

TEAM CODE: 01P

5THANNUAL JINDAL MOOT COURT COMPETITION, 2022

Starfox Co-operative & Ors. v Celestial& Ors.

BEFORE THE COMPETITION CCOF ARISHEM

STARFOX CO-OPERATIVE…………………………………...…….INFORMANT

CELESTIAL……………………………………………….………OPPOSITE PARTY

AJAX PVT. LTD & 3 OTHERS……………………………………OPPOSITE PARTIES

ANONYMOUS……………………….…………………………....….…… INFORMANT

CELESTIAL……………………………………………………………OPPOSITE PARTY

AJAX PVT. LTD & 3 OTHERS…..…………………………….………OPPOSITE PARTIES

MEMORIAL FILED ON BEHALF OF INFORMANTS

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS..................................................................................................4

INDEX OF AUTHORITIES...................................................................................................5

STATEMENT OF FACTS....................................................................................................11

STATEMENT OF JURISDICTION....................................................................................14

ISSUES FOR CONSIDERATION.......................................................................................15

SUMMARY OF ARGUMENTS...........................................................................................16

ARGUMENTS ADVANCED................................................................................................18

ISSUE 1: WHETHER CL ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR

SERVICES PROVIDED BY RTLS FOR SELLING TOYS IN ARISHEM’ IN VIOLATION OF
SECTION 4(2)(A) AND 4(2)(C) OF THE ACT?.......................................................................18

1.1 THAT CLAS ENTERPRISE IS DOMINANT IN THE RELEVANT PRODUCT AND

GEOGRAPHICAL MARKET.........................................................................................................18

1.2 THAT CLAS AN E-COMMERCE MARKETPLACE IS AN ESSENTIAL FACILITY IN THE

RELEVANT MARKET.................................................................................................................22

1.3 THAT CLHAS VIOLATED SEC 4(2)(A) AND 4(2)(C) OF THE ACT....................................24

1.4 THAT CL VIOLATED SEC 4(2)(E) OF THE ACT.................................................................26

1.5 THAT THE AGREEMENT BETWEEN CLAND THE CARTEL WOULD BE VIOLATIVE OF SEC
3(4) OF THE ACT......................................................................................................................27

ISSUE II. WHETHER AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO
PVT. LTD. ARE IN VIOLATION OF SECTION 3(3)(A) OF THE COMPETITION ACT?..........28

2.1 THAT THESE 4 TOY MFS ENTERED INTO AN AGREEMENT TO FORM A CARTEL.............28

2.2 THAT THERE WAS ADVERSE APPRECIABLE EFFECT ON THE COMPETITION (AAEC)......33

ISSUE III. WHETHER BKANDCL HAVE FACILITATED THE CARTELISATION BETWEEN

AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITE PVT. LTD., AND KINGO PVT. LTD. IN
VIOLATION OF SECTION 3 (3) OF THE COMPETITION ACT?..............................................37

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3.1 AGREEMENT BETWEEN THE FACILITATORS AND THE CARTEL COMES UNDER THE
PROHIBITED AGREEMENTS OF SECTION 3(3) OF THE ACT......................................................37

3.2 CL HAD THE INTENT AND ACTIVE ROLE IN FACILITATING THE CARTEL........................39

3.3 BKHAD THE INTENTION AND IT ACTIVELY CONTRIBUTION IN FACILITATING THE

CARTEL.....................................................................................................................................40

PRAYER.................................................................................................................................43

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INDEX OF AUTHORITIES

CASES

Accessories World Car Audio Private Limited v Sony India Private Limited and Anr Case No
03 of 2020.............................................................................................................................33
Air Works India (Engineering) Private Limited v GMR Hyderabad International Airport
Limited and Ors Case No 30 of 2019...................................................................................21
All India Tyre Dealers Federation v Tyre Manufacturers 2012 SCC OnLine CCI 65............27
Arishem Competition Act 2002, s 19(3)(d).............................................................................35
Automobiles Dealers Association v Global Automobiles Limited and Anr Case No 33 of 2011
..............................................................................................................................................33
CCI v Coordination Committee AIR 2017 SC 1449................................................................32
CCI v Co-ordination Committee of Artists and Technicians of WB Film and Television AIR
2017 SC 1449.......................................................................................................................18
Competition CC of India v Bharti Airtel 2018 SCC OnLine SC 2678....................................29
Deepa Narula v Taneja Developers and Infrastructures Ltd 2012 SCC OnLine CCI 60.......18
Delhi Jal Board v Grasim Industries Ltd and Ors MANU/CO/0066/2017.............................29
Eros International Media Ltd v Central Circuit Cine Association Indore Film Distributors
Association Kerala 2012 SCC OnLine CCI 9......................................................................26
Jindal Steel & Power Ltd v Steel Authority of India Ltd (2010) 10 SCC 744.........................21
Prasar Bharati (Broadcasting Corp of India) v TAM Media Research Pvt Ltd 2016 Comp LR
595 (CCI)..............................................................................................................................19
Rajasthan Cylinders and Containers Ltd v Union of India 2018 SCC OnLine SC 1718........28
Re Aluminium Phosphide Tablets MFs Suo Motu Case No 02 of 2011..................................29
Re Delhi VyaparMahasangh v Flipkart & Amazon Case No 40 of 2019................................19
Re FHRAI v Make My Trip India Pvt Ltd and others Case No 14 of 2019.............................33
Re Seth & co Suo moto Case No 04 of 2013...........................................................................33
Samir Agarwal v CCI (2021) 3 SCC 136.................................................................................30
Satyendra Singh v Ghaziabad Development Authority (GDA)2017 SCC OnLine CCI 8........19
Shamsher Kataria v Honda Siel& Ors 2014 SCC OnLine CCI 95.........................................32
Shri Ghanshyam Das Vij v M/s Bajaj Corporation Limited and Ors Case No 68 of 2013.....33

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Shri Ramamurthy Rajagopal and Doctor’s Associates Inc v Subway International, and Anr
Case No 90 of 2014..............................................................................................................33
Tamil Nadu Consumer Products Distribution Association v Fangs Technology Private
Limited and Anr Case No 15 of 2018..................................................................................33
Vikrant Bhagi v M/s Media Video Limited2013 SCC OnLine CCI 58....................................18

STATUTES

Arishem Competition Act 2002 s 19(3)(f)...............................................................................35

Arishem Competition Act 2002, s 19(3)..................................................................................32
Arishem Competition Act 2002, s 19(4)..................................................................................20
Arishem Competition Act 2002, s 19.......................................................................................18
Arishem Competition Act 2002, s 2(b)....................................................................................27
Arishem Competition Act 2002, s 3(3)........................................................................36, 37, 39
Arishem Competition Act 2002, s 3(4)....................................................................................26
Arishem Competition Act 2002, s 3.........................................................................................31
Arishem Competition Act 2002, s 4(2)(a)..........................................................................17, 23
Arishem Competition Act 2002, s 4(2)(c)..........................................................................17, 23
Arishem Competition Act 2002, s 4(2)(e)..........................................................................17, 26
European Commission 1950, art 81(1)....................................................................................37

INTERNATIONAL CASES

Aalborg Portland and Others v Commission Case number C-204/00...............................36, 38

AC Treuhand v Commission [2008] ECR II-1501...................................................................40
AC Treuhand v Competition CC Case Case Number T-99/04................................................37
AC Treuhand v Competition Commission Case No T-99/04..................................................38
Brown Shoe Co v US 370 US 294 (1962)................................................................................18
Commercial Solvents Corporation v Commission [1974] ECR...............................................26
Commission v AnicPartecipazioni (1999) C-49/92.................................................................38
Commission v Anic Partecipazioni [1999] ECR I-4125..........................................................40
Dansk Rørindustri and Others v Commission Case number T-21/99......................................40
Hercules v CC [1991] ECR II-1711.........................................................................................40
Hilti AG v CC(1991) ECR II-1439...........................................................................................18
Hoffmann-La Roche v CC(1979) ECR 461..............................................................................18
Microsoft v CC ECLI EU T 2007 289- ¶421...........................................................................22
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P Commission v Anic Partecipazioni [1999] ECR I-4125.......................................................39

Port of Helsingborg CC Case COMP/36-570 [2004]..............................................................25
Telefónica and Telefónica de España v CC Case number T-336/07.......................................26
US v Grinnell Corp 384 US 563 (1966)...................................................................................18

OTHERS

European Commission, Competition policy for the digital era(2019) ch 2.............................32

OECD, Algorithms and Collusion: Competition Policy in the Digital Age, (2017) ch 4........39
Raghavan Committee Report, National Common Minimum Programme(2004) ch 5.............35

BOOKS

Abir Roy & Jayant Kumar, Competition Law In India (Eastern Law House, 2014)...............18
SM Duggar, Guide To Competition Act 2002, (9thedn, Lexis Nexus, 2019) 297.....................28

ONLINE ARTICLES

Competition CCof India, ‘Market Study on E-Commerce in India’ (8th January

2020)<https://www.cci.gov.in/sites/default/files/whats_newdocument/Market-study-on-e-
Commerce-in-India.pdf> accessed on 1 March 2022..........................................................24
Cyril Shroff and Nisha Kaur Uberoi, ‘Cartel Enforcement in India: Standard and Burden of
Proof”, (CPI Antitrust Chronicle 1 February 2013) <
https://www.competitionpolicyinternational.com/cartel-enforcement-in-india-standard-and-
burden-of-proof/> accessed on 13th February 2022..............................................................27
European Union, ‘Antitrust: Commission fines Google €2.42 billion for abusing dominance
as search engineby giving illegal advantage to own comparison shopping service’ (EU,
2017), < https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1784> accessed on
3rd February 2022................................................................................................................34
Phillip Areeda, ‘Essential Facilities: An Epithet in Need of Limiting Principles’ (1989) 58(3)
American Bar Association <https://www.jstor.org/stable/40843140?
seq=1#metadata_info_tab_contents> accessed on 24 February 2022..................................22
Will Sparks, ‘The service provider as cartelfacilitator: assessing ‘third party’liability under
Article 101 TFEU’ ( Competition law and policy debate, May 2015)
<www.squirepattonboggs.com/~/media/files/insights/publications/2015/05/the-service-
provider-as-cartel-facilitator/article-hartnett-sparks.pdf> accessed on 23 February 2022...41

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ONLINE JOURNALS

Andrew Lipsman, ‘How The Pandemic Is Reshaping The Product Category Landscape’
(Insider Intelligence, US Ecommerce 6th July 2020) <
https://www.emarketer.com/content/us-ecommerce-by-category-2020> accessed 17th
January 2022.........................................................................................................................19
European Union, ‘Antitrust: CCfines Google €2.42 billion for abusing dominance as search
engineby giving illegal advantage to own comparison shopping service’ (EU, 2017), <
https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1784> accessed on 3rd
February 2022.......................................................................................................................25
Zhibin Chen, ‘Consumer E-Commerce Psychology’ (2010) <
https://www.researchgate.net/publication/251938127_Consumer_e-
commerce_psychology> accessed on 27 January 2021.......................................................34

MOOT PROPOSITION

Moot proposition 11................................................................................................................31

Moot Proposition ¶ 11..............................................................................................................30
Moot Proposition ¶ 5................................................................................................................32
Moot proposition ¶10.........................................................................................................19, 38
Moot proposition ¶11...............................................................................................................34
Moot Proposition ¶11.............................................................................................28, 30, 32, 40
Moot proposition ¶12...............................................................................................................23
Moot Proposition ¶14...............................................................................................................23
Moot Proposition ¶18...............................................................................................................18
Moot Proposition ¶19...............................................................................................................28
Moot Proposition ¶19(4)(b)......................................................................................................30
Moot proposition ¶19...................................................................................................25, 33, 34
Moot Proposition ¶19.........................................................................................................29, 39
Moot Proposition ¶5.................................................................................................................29
Moot Proposition ¶8...........................................................................................................19, 20
Moot proposition Clarification 2..............................................................................................19
Moot Proposition, ¶14..............................................................................................................22

JOURNALS

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Alan Devlin, ‘A Proposed Solution to the Problem of Parallel Pricing in Oligopolistic

Markets’ (2007) 59 SLR 1111..............................................................................................28
Inge Graef, ‘Rethinking the essential facilities doctrine for the EU digital economy’(Tilburg
University, April 2019).........................................................................................................22
Project on Big data and Cartels, ‘Impact of digitalization in cartel enforcement’, (Scoping
Paper April 2020).................................................................................................................30

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STATEMENT OF FACTS

INTRODUCTION

Arishem is a Republic in South Asia, whose laws are parimateria with the laws of India. It
saw a sharp rise in the number of internet users due to government intervention in the year
2015. It resulted in the increase in number of users of e-commerce platforms in the country.
Initially, the businesses in Arishem were cautious in adopting the e-commerce channels and
relied on traditional methods. Despite the slow adoption by the business, CL, an e-commerce
platform, gained significant market share due to its popularity amongst consumers.

FACTS CONCERNING THE TOY MF’S

There were 4 established toy MFs and RTLs in Arishem. Ajax Pvt. Ltd. is the largest
amongst them, enjoying a market share of 35%, other market players included Icarus Pvt.
Ltd. with 30%, KingoPvt. Ltd. with 10% and SpiritePvt. Ltd. with a share of 10%. The
remainder of the market was fragmented among the unorganised sector and imported toys.

Due to increase in internet penetration in the country, the 4 MFs set up there dedicated e-
commerce websites in 2018. In 2019, their websites were not generating profits and their
overall sales had declined. Thus, to identify the reasons for the decline, they funded a market
study which attributed 2 reasons for the decline. Firstly, customers preferred shopping from
e-commerce platforms (mainly CL), secondly, their independent price tracking algorithm did
not track the prices of CL and all their products were priced similarly.

FACTS CONCERNING USAGE OF BK

With the onset of pandemic in Arishem, businesses as well as the 4 MFs were forced to
adopt e-commerce platforms for survival. Mr. Harrington, MD of Ajax Pvt. Ltd. Called a
meeting with the 3 other MFs wherein he shared the findings of the market study. Thus, the 4
MFs decided to list their product on CL together as well as abandon their independent
algorithms from March 2020. Along with listing their products actively on CL, they adopted
a propriety algorithm created by ‘Black Knight’, purchased by Ajax Pvt. Ltd. It was decided
that parameters would be set in such a way that the prices of the products of one the company
will be lower than the other 3 for a period of 2 months.

FACTS CONCERNING MEETINGS WITH CL

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Following their meeting, they approached CL for an agreement to list their products on its
platform. On the issue of listing on the platform, they were informed that the listing was
based on a complex algorithm. But, CL charges higher than usual CCto assist sellers in
improving their ratings.

In January 2021, a Co-operative named ‘Starfox Co-operative’ was formed by association

of local toy MFs and RTLs in the unorganised sector to sell their products on CL. But after 2
months of listing, they noticed that none of its products were listing on initial page on any
search result and the more expensive toys of the 4 MFs were displayed preferably. Hence, the
it raised its concern with CL which was dismissed by it.

FACTS CONCERNING THE CCA

In May 2021, the co-operative approached the CCA alleging CL has resorted to preferential
treatment. CCA also received an anonymous information regarding the cartel of the 4 MFs.
Finding merit in the case, CCA passed a prima facie order directing an investigation by the
office of Director General. The DG in its report submitted the following:

1. CL was neither dominant nor it provided an essential facility in the relevant market as the
market was highly competitive. In any case, it did not abuse its dominant position.

2. The 4 MFs have formed a cartel and has been fixing prices since 2018. The said assertion
was based on the fact that, firstly, the MD of Ajax Pvt. Ltd. made a speech in the presence
of other 3 MFs calling for the MFs to provide unform discount to counter CL and
imported toys, secondly, following the meeting, the 4 MFs implemented individual price
tracking algorithms and priced their products similarly, thirdly, in 2020, they deployed
‘Black Knight’ algorithm for gains on rotational basis and 4thly, they paid 20%
Commission to CL instead of 15%.

3. CL has facilitated the cartel by giving them preferential treatment and in exchange it
charged higher than usual commission. It also denied the same services to Co-operative.

4. BKfacilitated the cartel by providing them software which allowed them to fix the prices.

CCA has called all the parties involved in the final hearing on 12th-13th of March, 2022 on
their comments and objection to the DG report.

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STATEMENT OF JURISDICTION

The Informant has invoked the jurisdiction of this Hon’ble CC under Sec 19(1)(a) of the
Arishem Competition Act, 2002.

THE PRESENT MEMORANDUM SETS FORTH THE FACTS, CONTENTIONS

AND ARGUMENTS ON BEHALF OF THE RESPONDENT IN THE PRESENT
CASE.

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ISSUES FOR CONSIDERATION

-ISSUE 1-

WHETHER CL ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR SERVICES

PROVIDED BY RTLS FOR SELLING TOYS IN ARISHEM’ IN VIOLATION OF SECTION 4 (2)
(A) AND 4 (2) (C) OF THE COMPETITION ACT?

-ISSUE 2-

WHETHER AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITEPVT. LTD., AND KINGOPVT. LTD.
ARE IN VIOLATION OF SECTION 3 (3)(A) OF THE COMPETITION ACT?

-ISSUE 3-

WHETHER BKANDCL HAVE FACILITATED THE CARTELISATION BETWEEN AJAX PVT.

LTD., ICARUS PVT. LTD., SPIRITEPVT. LTD., AND KINGOPVT. LTD. IN VIOLATION OF

SECTION 3 (3) OF THE COMPETITION ACT?

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SUMMARY OF ARGUMENTS

ISSUE I - WHETHER CL ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR

SERVICES PROVIDED BY RTLS FOR SELLING TOYS IN ARISHEM’ IN VIOLATION OF
SECTION 4 (2) (A) AND 4 (2) (C) OF THE COMPETITION ACT?

It is humbly submitted before this Hon’ble CCthatCL has abused its dominant position in the
‘market for services provided by RTLs for selling toys in Arishem’.CL is an enterprise as
envisaged in Sec 2(h) is dominant in the relevant geographical and product market. It is also
an essential facility in the relevant market. Additionally, the preferential treatment that CL
meted through its listing algorithm to the 4 MFs and RTLs is in violation of Sec 4(2)(a) and
Sec 4(2)(c) of the Act. It also leveraged its position in the primary market to gain advantage
in the secondary market and thus is in violation of Sec 4(2)(e) of the Act. Italso imposed a
vertical restrain on the non-preferred sellers in violation of Sec 3(4) of the Act.

ISSUE 2 - WHETHER AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITEPVT. LTD., AND

KINGOPVT. LTD. ARE IN VIOLATION OF SECTION 3 (3)(A) OF THE COMPETITION ACT?

It is humbly submitted before this Hon’ble CC thatAjax Pvt. Ltd., IarusPvt. Ltd., SpiritePvt.
Ltd. and KingoPvt. Ltd. are in violation of Sec 3(3)(a) of the Act since the 4 toy MFs and
RTLs entered into an agreement to form a cartel of the Hub and Spoke model. The agreement
between these enterprises had an AAEC in the relevant market as envisaged in Sec 3(3).

ISSUE 3- WHETHER BK AND CL HAVE FACILITATED THE CARTELISATION BETWEEN

AJAX PVT. LTD., ICARUS PVT. LTD., SPIRITEPVT. LTD., AND KINGOPVT. LTD. IN

VIOLATION OF SECTION 3 (3) OF THE COMPETITION ACT?

It is humbly submitted before this Hon’ble Court that BKandCL have facilitated the
cartelisation between Ajax Pvt. Ltd., Icarus Pvt. Ltd., SpiritePvt. Ltd. and KingoPvt. Ltd. in
violation of Sec 3(3) of the Act. Since, any anti-competitive agreements between the
facilitator and the cartel comes within the ambit of prohibited agreements under Sec 3(3) of
the Act. CL and BKas the facilitator of the cartel had the intent and played an active role in
facilitating the cartel and its activities.
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ARGUMENTS ADVANCED

ISSUE 1: WHETHER CL ABUSED ITS DOMINANT POSITION IN THE ‘MARKET FOR

SERVICES PROVIDED BY RTLS FOR SELLING TOYS IN ARISHEM’ IN VIOLATION OF
SECTION 4(2)(A) AND 4(2)(C) OF THE ACT?

[¶I.1]The Respondents contends before this Hon’ble CC that CL has abused its dominant
position in the relevant market in violation of Sec 4(2)(a), 4(2)(c) and 4(2)(e) of the Act.
Additionally, it has imposed vertical restrain on the non-preferred sellers which is in violation
of Sec 3(4) of the Act.

[¶I.2]The aforesaid contention is based on 5 lines of argumentations, firstly, CL as an

enterprise as envisaged in Sec 2(h) is dominant in the relevant geographical and product
market. Secondly, it is an essential facility in the relevant market. Thirdly, the preferential
treatment meted by it is in violation of Sec 4(2)(a) and Sec 4(2)(c) of the Act. 4thly, it is in
violation of Sec 4(2)(e) of the Act and fifth, it has imposed a vertical restrain on the non-
preferred sellers in violation of Sec 3(4) of the Act.

1.1 THAT CLAS ENTERPRISE IS DOMINANT IN THE RELEVANT PRODUCT AND

GEOGRAPHICAL MARKET.

[¶I.3]It is pertinent to note that CL as an enterprise as defined in Sec 2(h) 1 is dominant in the
relevant product as well as geographical market as envisaged in Sec 19 2 of the Act. It is
relevant to delineate that the entity under consideration falls within the definition of
enterprise as envisaged in Sec 2(h)3 of the Act as only an enterprise would come within the
ambit of the statute. Also, In order to determine whether an enterprise is abusing its dominant
position or not, it is necessary to first determine the relevant market to identify the
boundaries4 within which that particular enterprise was alleged to be in a dominant position
in accordance with the provision of Sec 19.5
1
Arishem Competition Act 2002, s 4(2)(a).

2
Arishem Competition Act 2002, s 4(2)(c).

3
Arishem Competition Act 2002, s 4(2)(e).

4
CCI v Co-ordination Committee of Artists and Technicians of WB Film and Television AIR 2017 SC 1449.

5
Vikrant Bhagi v M/s Media Video Limited2013 SCC OnLine CCI 58; Brown Shoe Co v US 370 US 294 (1962);
US v Grinnell Corp 384 US 563 (1966).
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[¶I.5]In the present case, the conditions of competition are homogeneous pan-Arishem and as
such, the relevant geographic market in this case is ‘Republic of Arishem’. Also, the relevant
product market as has been identified in the DG report is ‘market for services provided by
RTLs for selling toys in Arishem’.6 The same ought to be considered as the enterprise under
consideration was providing market to the RTLs for the services provided by them. Thus, the
relevant product market would include any enterprise which provides market to the RTLs for
selling toys in Arishem.

[¶I.6]Further, to assess the dominance of CL in the relevant market 7, it needs to be delineated

that it is dominant in that relevant market. Accordingly, various factors in Sec 198should be
considered while determining its dominance in the relevant market.

A.That CL held a substantial market share in the relevant market.

[¶I.7]The existence of a dominant position is derived from several factors of which, the
existence of very large market shares is highly important 9 and is evidence of the existence of
a dominant position.10 In the impugned case, it can be inferred from the factual matrix that
CL held a substantial market share in the relevant market to be held dominant. 11CL already
had a significant market share in the e-commerce platform business12 and the 4 established
companies which held a market share of 85% 13 were forced to list on CL in the absence of a
viable alternative.14

[¶I.9]Thus, with the 4 MFs listing their products only on CL, the business of the 4 MF was
majorly shifted to the platform. Also, the COVID-19 pandemic further accelerated the shift to
online shopping15 as offline retailing was reduced to minimal which further establishes the

6
Moot Proposition ¶18.

7
Deepa Narula v Taneja Developers and Infrastructures Ltd 2012 SCC OnLine CCI 60.

8
Arishem Competition Act 2002, s 19.

9
Hoffmann-La Roche v CC(1979) ECR 461; Hilti AG v CC(1991) ECR II-1439.

10
Abir Roy & Jayant Kumar, Competition Law In India (Eastern Law House, 2014).

11
Moot Proposition ¶8.

12
Moot proposition Clarification 2.

13
Moot proposition ¶10.

14
Ibid.
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dominance of CL. Therefore, the factual matrix of the case clearly establishes the high market
share of CL in the relevant market.

B. Size and resources of CL created entry barriers for other players in the relevant
market.

[¶I.11]In the given scenario, superior financial strength in the market coupled with superior
resources is an important indicator of dominance of an enterprise. 16 Similarly, commercial
advantage of an enterprise in the form of size, capacity and technological superiority is also
an important consideration.17

[¶I.12]Also, it is an accepted position that strong “network effects” generate a source of

market power for such platforms.18Large traffic on an e-commerce platform makes it more
valuable, which further attracts more users and the platform benefits from a ‘positive
feedback loop’, which gives rise to market power.19

[¶I.13]In the present case, the size and resources of CLcreated an entry barrier in the relevant
market, thus contributing to its dominant position in the market. Thus, the 4 dominant MF in
the market couldn’t compete CL’s insurmountable scale advantage with strong network effect
and its commercial advantage due to its size and resources. Along with that, the market study
delineates that customer preferred CL over any other platform, thus clearly indicating that the
market was not highly competitive.

[¶I.14]So, it may be possible for new entrants to create online marketplace platforms, but the
advantage gained by CL due to network effects may be difficult to breach. Therefore, in lieu
of the financial risk involved, high capital cost of entry, marketing entry barrier, economics
of scale, etc, a clear barrier for new entrants is created.

C. That the buyers lacked the countervailing power against CL.

15
Andrew Lipsman, ‘How The Pandemic Is Reshaping The Product Category Landscape’ (Insider Intelligence,
US Ecommerce 6th July 2020) < https://www.emarketer.com/content/us-ecommerce-by-category-2020>
accessed 17th January 2022.
16
Satyendra Singh v Ghaziabad Development Authority (GDA)2017 SCC OnLine CCI 8

17
Prasar Bharati (Broadcasting Corp of India) v TAM Media Research Pvt Ltd 2016 Comp LR 595 (CCI)

18
Re Delhi VyaparMahasangh v Flipkart & Amazon Case No 40 of 2019.

19
Ibid.
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[¶I.16]An essential ingredient20 for proving dominance of an enterprise is the countervailing

buying power of the buyers against the enterprise in the presence of an easily available
alternative supplier.

[¶I.17] In the present case, it is an undisputed fact that the price point offered by CL on its
platform was near impossible to counter even by the 4 dominant MF in the relevant market. 21
Thus, in case a buyer or a group of buyers ought to negotiate with CL against the price point
offered by it, there is no substitutable supplier which can compete with CL as a supplier.

[¶I.18]Further, if there is a single consumer having great deal of economic power, the
countervailing buying power will be too big for the dominant enterprise to exercise its
dominance.22 That is why the Act provides the array of factors for ascertaining dominance.23

[¶I.19]In the present case, the users of CL were individually too small to countervail buying
power and this handicap is worsened in the light of comparative might of CL as compared
against its competitors. Therefore, CL held the supply side dominance due to no
countervailing buying power at the demand side.

1.2 THAT CLAS AN E-COMMERCE MARKETPLACE IS AN ESSENTIAL FACILITY IN THE

RELEVANT MARKET.

[¶I.21]It is pertinent to note that CL is an essential facility in the relevant market and its
alleged act amounts to abuse of dominance under the said doctrine.

[¶I.22]It was ruled by CCI in the GMR24 case, that:

“As per the existing jurisprudence, an asset is considered to be essential facility if it fulfils the
following main economic conditions:a. The dominant entity controls access to an essential
facility; b. The facility cannot reasonably be duplicated by the competitor; c. The dominant
entity denies access to the competitor; d. There should be no alternative means of entering

20
Arishem Competition Act 2002, s 19(4).

21
Moot Proposition ¶8.

22
Jindal Steel & Power Ltd v Steel Authority of India Ltd (2010) 10 SCC 744.

23
Ibid.

24
Air Works India (Engineering) Private Limited v GMR Hyderabad International Airport Limited and Ors Case
No 30 of 2019.
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 MEMORIAL ON BEHALF OF INFORMANTS

the relevant market at a reasonable cost without having access to the essential facility; e.
There must be spare capacity on the facility in question;”

[¶I.23]In the impugned case, CL satisfies all the parameters for satisfying the test of
essentiality as laid down in the aforementioned case.

i. CL controlled access to essential facility which cannot be replicated reasonably.

[¶I.24]CL controlled access to the essential facility offered by it and it cannot be duplicated
by its competitors economically25 “on an equal footing”26 due to its strong network effect,
insurmountable scale advantage, customer base, etc. Thus, any new competitor can establish
a new e-commerce market, it would require a huge capital for technology, tie-ups, and in the
establishment of a nationwide distribution network, thus making it economically unviable.

ii. There was no other reasonable means to enter the relevant market.

[¶I.25]In the present scenario, there was no alternative means of entering the relevant market
at a reasonable cost. The emphasis ought to be applied on ‘reasonable cost’. The factual
matrix clearly establishes that the dominant MFs as well as the Cooperatives were forced to
list on CL in the prevailing circumstances for survivalin the absence of a viable alternative at
a reasonable cost.

iii. The dominant entity denies access to the competitor.

[¶I.26] CL although prima facie provided access of its platform to all the sellers, it
constructively denied access to the market to the non-preferred sellers by resorting to
preferential listing27 towards its preferred sellers without any pro-competitive justification.
Access to data or being ranked by an online platform is essential for businesses to compete in
the market.28 Regulatory scrutiny therefore needs to go beyond the question of an outright

25
Phillip Areeda, ‘Essential Facilities: An Epithet in Need of Limiting Principles’ (1989) 58(3) American Bar
Association <https://www.jstor.org/stable/40843140?seq=1#metadata_info_tab_contents> accessed on 24
February 2022.
26
Microsoft v CC ECLI EU T 2007 289- ¶421.

27
Moot Proposition, ¶14.

28
Inge Graef, ‘Rethinking the essential facilities doctrine for the EU digital economy’( Tilburg University, April
2019).
<https://www.researchgate.net/publication/332401208_Rethinking_the_essential_facilities_doctrine_for_the_E
U_digital_economy> accessed on 23rd January 2022.
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 MEMORIAL ON BEHALF OF INFORMANTS

denial of use and consider the conditions under which the use is offered along with the terms
of service of the platform.29

[¶I.27] Therefore, the DG in its report has failed to appreciate the aforesaid facts and CL
would qualify as an essential facility in the relevant market and its act would amounts to
abuse of dominance in that relevant market.

1.3 THAT CLHAS VIOLATED SEC 4(2)(A) AND 4(2)(C) OF THE ACT.

[¶I.28]It is pertinent to note that CL by resorting to anti-competitive activities has abused its
dominant position in the relevant market which is in violation of Sec 4(2)(a) 30 and 4(2)(c)31 of
the Act.

[¶I.29]In the impugned case, CL perpetuated the practice of listing its preferred sellers in the
first few pages of the search results, thereby creating a search bias. In number of search
results32, the products sold by the 4 MFs dominated the first few pages irrespective of the fact
that they were more expensive.

[¶I.30]Whereas, products which were sold by the cooperative was listed in later pages. It
created a defacto exclusivity to the detriment of cooperative.

[¶I.31]Thus, in substance, though CL claims that 'any person' can sell his product on its
platform, in fact, it promotes only selected few and do not maintain platform neutrality. Also,
CL charged higher than usual commission33 from the MFs which further signifies that the so
called organic listing on CL also effectively amounted to paid listing and it gave preferential
treatment to the 4 MFs in exchange of the extra commission.

[¶I.32]The aforesaid arrangement has far-reaching consequences as the non-preferred sellers

are relegated to sell only through traditional brick and mortar set-up which involves

29
Lee M Lao, ‘Search, Essential Facilities, and the Antitrust Duty to Deal’, (Northwestern Journal of
Technology and Intellectual Property, 2013), vol 11 no 5, p 272-319; Z. ABRAHAMSON, ‘Essential Data’
(The Yale Law Journal 2014), vol. 124 no. 3, ¶867-881
<https://yjolt.org/sites/default/files/23_yale_j.l_tech._301_essential_facilities_0.pdf>accessed on 1st February
2022.
30
Arishem Competition Act 2002, s 4(2)(a).

31
Arishem Competition Act 2002, s 4(2)(c).

32
Moot Proposition ¶14.

33
Moot proposition ¶12.
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 MEMORIAL ON BEHALF OF INFORMANTS

significant fixed costs and are devoid of wide pan-Arishem reach which CL offer. Thus, there
is an attempt by CL to limit and concentrate the number of sellers on its platform and stifle
the competition amongst the sellers based on preferential treatment.

[¶I.33]This is in violation of Sec 4(2)(a) and 4(2)(c) of the Act as the condition for listing is
discriminatory and creates a barrier for new entrants in the market.

A. In arguendo, the complex algorithm of CL was anti-competitive.

[¶I.34]In arguendo, in the absence of any preferential treatment, the complex algorithm 34
used by CL is anti-competitive as it created a barrier for the new entrants to the market.
Seller’s access to customers on online platforms depends inter alia on their ranking on the
platform’s website in response to related search queries.35

[¶I.35]Thus, any new seller listing on CL would not be ranked in the first few pages in
relation to the response to any search queries. Therefore, the lack of transparency vis-à-vis
the search ranking criteria results in constructive denial to market access which attracts the
violation under Sec 4(2)(c) of the Act. Therefore, this leads to other competitors being
excluded and foreclosed from the market, attracting the violations under Sec 4(2)(c) as well
as Sec 4(2)(a) of the Act.

1.4 THAT CL VIOLATED SEC 4(2)(E) OF THE ACT.

[¶I.37]It is pertinent to note that CL has leveraged its position in the primary market to gain
advantage in the secondary market and is thus in violation of Sec 4(2)(e) of the Act.

[¶I.38]In the Google36 case, wherein it was ruled that google abused its dominant position by
leveraged its position in the primary market to gain advantage in the secondary market, it was
held by the European CC that:

“This means that by giving prominent placement only to its own comparison shopping
service and by demoting competitors, Google has given its own comparison shopping service
a significant advantage compared to rivals.; Google's practices amount to an abuse of
34
Ibid.

35
Competition CCof India, ‘Market Study on E-Commerce in India’ (8th January
2020)<https://www.cci.gov.in/sites/default/files/whats_newdocument/Market-study-on-e-Commerce-in-
India.pdf> accessed on 1 March 2022.
36
European Union, ‘Antitrust: CCfines Google €2.42 billion for abusing dominance as search engineby giving
illegal advantage to own comparison shopping service’ (EU, 2017), <
https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1784> accessed on 3rd February 2022.
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 MEMORIAL ON BEHALF OF INFORMANTS

Google's dominant position in general internet search by stifling competition in comparison

shopping markets.”

[¶I.39]In the present case, CL has abused its dominant position in the e-commerce market
(primary market) to maximise its profit in the market for toy retailing (Secondary market). It
used its leveraging strategy by altering its business conduct in its primary market to gain
advantages in a distinct, but related, secondary market.37

[¶I.40]It had a substantive interest in the sale of the 4 MFs as it charged one-fifth of the total
revenue as CCfrom the cartel.38 Thus, although it was not directly involved in the market, it
used its position in the primary market to indirectly gain advantage in the secondary market
through the MFs. It resulted in an exclusionary effect in that secondary market by foreclosing
competitors without any objective justification for the conduct39 and thereby violative of Sec
4(2)(e)40 of the Act.

[¶I.41]Therefore, CL has abused its dominant position in the relevant market and the DG has
resultantly misconstrued the facts placed on record to reach an erroneous conclusion that CL
has not abused its dominant position.

1.5 THAT THE AGREEMENT BETWEEN CLAND THE CARTEL WOULD BE VIOLATIVE OF
SEC 3(4) OF THE ACT.

[¶I.42]It is pertinent to note that the vertical agreement between CL and the cartel is in
violation of Sec 3(4)41 of the Act.

[¶I.43]In the impugned case, CL’s act amounts to imposing vertical restrain on the non-
preferred sellers. It would be “constructive refusal to deal” as envisaged in Sec 3(4)(d) of the
Act because merely providing the platform does not relinquish the duty of CL to provide a
neutral platform.

37
Port of Helsingborg CC Case COMP/36-570 [2004].

38
Moot proposition ¶19.

39
Commercial Solvents Corporation v Commission [1974] ECR; Telefónica and Telefónica de España v CC
Case number T-336/07.
40
Arishem Competition Act 2002, s 4(2)(e).

41
Arishem Competition Act 2002, s 3(4).
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 MEMORIAL ON BEHALF OF INFORMANTS

[¶I.44]The refusal to deal as per the provision of Sec 3(4) would involve agreement between
players operating at different level of production or supply chain. 42 The preferential treatment
by CL to a class of sellers at a different level of supply chain amounts to exclusivity through
preferential listings and leads to non-preferred sellers from being excluded and foreclosed
from the market. This practice attract the violations under Section 3(4) of the Act.

[¶I.45]Also, as already stated in the aforementioned line of argumentation wherein the abuse
of dominance of CL has been established, there was AAEC in terms of Sec 19(3) of the Act
in the market of toy retailing owning to the anti-competitive practices adopted by CL. Thus,
CL has violated Sec 3(4) of the Act.

42
Eros International Media Ltd v Central Circuit Cine Association Indore Film Distributors Association Kerala
2012 SCC OnLine CCI 9.
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PRAYER

Wherefore, in light of the facts of the case, issues raised, arguments advanced and authorities
cited, this Hon’ble Commission may be pleased to adjudge and declare that:

In Starfox Co operative and Anr.v Celestial:

 Celestial is a dominant enterprise and was providing an essential facility in the
relevant market place which has abused its dominant position and are in violation of
Section 4(2)(a), 4(2)(c) and 4(2)(e) of the Act.

In Starfox Co operative and Anr. v Ajax Pvt. Ltd., Spirite Pvt. Ltd., Kingo Pvt. Ltd. and
Icarus Pvt. Ltd.:
 Ajax Pvt. Ltd., Spirite Pvt. Ltd., Kingo Pvt. Ltd. and Icarus Pvt. Ltd. had entered into
an agreement which had an Adverse Appreciable Effect on the Competition.

 The acts of Ajax Pvt. Ltd., Spirite Pvt. Ltd., Kingo Pvt. Ltd. and Icarus Pvt. Ltd
caused AAEC and hence, are in violation of Sec 3(3)(a) of the Act.

In Starfox Co operative and Anr. v Black Knight and Celestial:

 Black Knight and Celestial have facilitated the cartelisation between Ajax Pvt. Ltd.,
Icarus Pvt. Ltd., SpiritePvt. Ltd., and KingoPvt. Ltd.
 The acts of Black Knight and Celestial are in violation of Section 3(3) of the Act.

A LL OF WHICH IS RESPECTFULLY
SUBMITTED

COUNSELS FOR THE STARFOX CO

OPERATIVE & ANR.

24