TRAI or CCI – Supreme Court settles the Jurisdictional Tussle
INTRODUCTION
The Supreme Court of
India has recently settled the jurisdictional tussle between the Competition
Commission of India (“CCI”) and
Telecom Regulatory Authority of India (“TRAI”)
in the case of cartelization by three major telecom operators namely Bharti
Airtel, Vodafone and Idea Cellular (hereinafter referred as “Incumbent Dominant Operators” or “IDO”).[1]
The apex court upheld the Bombay High Court’s judgment of setting aside the CCI
Order and opined that the matter pertains to interconnection agreement which is
governed under the TRAI Regulations therefore, TRAI being the sector regulator
has a better jurisdiction in the alleged matter than CCI. The allegation of
cartelization was brought by Reliance Jio who informed CCI that the IDO has
entered into an anti-competitive agreement for denying Point of Interconnection
(“POI”) services to Reliance Jio.
FACTUAL
MATRIX
In November 2016,
Reliance Jio filed an information under Section 19(1) of the Competition Act,
2002 (“Competition Act”) alleging
that the IDO has formed anti- competitive agreement and cartel so that they can
deny POI Services to Reliance Jio and without having sufficient POI it gets
difficult for users of one service provider to make calls to users of another
service provider, it was also alleged that IDO were denying mobile number
portability to the customers who wanted to switch to Reliance Jio. Under
section 26 of the Competition Act 2002, CCI on receipt of information has to
first find out whether there exists a prima facie case. CCI on ascertaining the
same passed an order that there existed a prima facie case and hence an
investigation shall be conducted by CCI. Against the order of CCI, the IDO filed
writ petition in the Bombay High Court praying to quash the CCI Order. The High
Court after hearing the matter vide its judgment quashed the CCI’s order for
investigation due to lack of jurisdiction. Aggrieved by the High Court’s
judgment, CCI filed a special leave petition with the Apex Court for its
determination.
CONTENTIONS
AND FINDINGS
The IDOs contended that
CCI’s order to conduct investigation was premature, TRAI has exclusive
jurisdiction on the matter as it regulates the telecom sector which shall also
include competition related issues. It was also contended that even if CCI has
jurisdiction but in this case TRAI’s jurisdiction must prevail and it is TRAI
who has to determine the facts related to jurisdiction and CCI should not have
proceeded with the matter and order for investigation. It was further emphasised
by the IDOs that Telecom Regulatory Authority of India Act, 1997 (“TRAI Act”) is a complete code and the
objective set out in the preamble of the TRAI Act makes it clear that it is
TRAI who shall make arrangements for protection and promotion of consumer
interest and ensuring fair competition in telecommunication industry. Reliance
was also placed in Section 11 of the TRAI Act which gives power to TRAI and
mandates it to take measures aimed at facilitating competition and promote
efficiency in the operation of telecommunication services. Thus, even though the
objective of the Competition Act and the TRAI Act are overlapping, being the
special law TRAI Act shall prevail.
CCI on the other hand
argued that both TRAI Act and the Competition Act are special Act therefore the
IDOs contention regarding the same is inapplicable. Further it was also argued
that both TRAI Act and Competition Act operates in their respective fields, CCI
has complete jurisdiction to look in to the matters of anti-competitive practices
whereas TRAI has jurisdiction to take care of matters pertaining to violation
of condition of licenses and regulations by the telecom companies.
The Bombay High Court
while passing its judgment opined that the questions regarding interconnection
agreements and clauses under the same, quality of services, obligations of the
service providers are governed under the TRAI Act and the rules and regulations
made thereunder. The Competition Act is insufficient to decide and deal with
the issues arising out of the provisions of the TRAI Act. Therefore, CCI has no
jurisdiction on the present matter.
The Apex Court reiterated
Bombay High Courts’ decision but it denied the contention that TRAI has the
sole jurisdiction to deal with the issue excluding CCI. The Apex Court further
in its judgment said that the matter pertains to violation of interconnection
agreement and the obligation to provide interconnectivity is the condition of
licenses provided to the telecommunication companies which is governed under the
TRAI Act. Therefore, not letting TRAI who is the domain expert here in this
case to deal with it shall be unjust. Further,
the Apex Court emphasised that once TRAI determines the jurisdictional facts in
the matter then question may arise whether denying POI by the IDOs was an
action in concert and it would be in this stage that CCI may intervene for
determining whether violation of TRAI Act and regulations thereunder has also
led to abuse of dominance and cartelization under Competition Act.
CONCLUSION
Indian telecom sector is among
the fastest emerging sector. On one hand the players in the sector have to
amass the market share and on the other hand they have to maintain a fair
competition in the market. In the
process there may arise legal issues such as cartelization and predatory
pricing along with issues of interconnection similar to the present case and
which calls for overlapping jurisdiction of the TRAI and the CCI. In such a
case the Apex Courts’ judgment has provided clarity to the ambiguity with
regards to jurisdictional tussles between the two authorities. In order to
avoid double jeopardy, Supreme Court has also clarified that both the
authorities have to act very carefully and in such matters it is necessary that
CCI act after TRAI, who is the specialised sectoral regulator.
[1] CompetitionCommission of India vs. Bharti Airtel Limited, Civil Appeal No(s). 11847-11851 of 2018
Contributed by – MohanaRoy
Associate – Corporate
King Stubb & Kasiva,
Advocates & Attorneys
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