No coercive action against Star, Disney, Asianet Star under Competition Act: Bombay High Court to CCI

The Bombay High Court on Wednesday directed the Competition Commission of India (CCI) not to take any coercive action against three broadcasters and media and entertainment companies, Asianet Star Communications Pvt Ltd, Disney Broadcasting (India) Pvt Ltd and Star India Pvt Ltd. (petitioners) in furtherance of an order initiating investigation against such companies. [Asianet Star Communications Private Limited v. CCI and connected petitions].A Bench of Justices Gautam Patel and Madhav Jamdar ordered the CCI not to pass any orders in furtherance of its investigation based on a complaint by Asianet Digital Network Pvt Ltd (ADNPL)."The CCI is not to pass any further orders or to adjudicate further on the complaint (in which the order under challenge is passed) until further orders of the Court. The CCI is not to permit or direct any coercive actions against the petitioners until the next date" the order stated. The Court also directed the petitioners to furnish to the Director General of CCI the documentary material called for in response to the queries in furtherance of the order, on a without prejudice and no-equities basis.The Director General was also ordered to keep the information collected by him confidential as required by law until the next hearing date. .The Bench passed the order in writ petitions filed by the three petitioners challenging an order of CCI passed on February 28, 2022 directing its Director General to initiate investigation under Section 26 of the Competition Act based on a complaint by ADNPL.ADNPL, which is in the business of distribution of TV channels to customers through local cable operators predominantly in Kerala, had contended in its complaint that broadcasters such as the petitioners, must not have discriminatory pricing in commercial contracts with multi-service operators such as ADNPL.In the complain, ADNPL referred to the regulations of the Telecom Regulatory Authority of India (TRAI) and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). The regulations prohibits discriminatory pricing in commercial contracts with multi-service operators. ADNPL stated that the petitioners by abusing their position of dominance, provided significant discounts to a direct competitor through allied agreements that apparently offered a cashback system.The petitioners intended to bypass the TRAI/TDSAT set-caps or upper limits with an intend to provide unfair advantage to ADNPL's competitor.In view of this, CCI ordered the Director General to conduct an investigation and submit a report within 60 days. The same came to be challenged before the High Court..Senior Advocate Darius Khambata, appearing for Star India, submitted that the order was bad and cannot be sustained. Advocate Somsekhar Sundaresan appearing for CCI, however, opposed the petition on the point of jurisdiction stating that since the entire issue arose in Kerala, the challenge ought to have been in a court of Kerala. Supplementing Sundaresan's point, Senior Advocate Navroz Seervai for ADNPL supported the order passed. He submitted that ADNPL's contention was only that the petitioners were subverting the TRAI/TDSAT norms causing prejudice to it. They both contended that all that CCI intended to do was data collection. .The High Court opined that CCI ought to be given an opportunity to place its case before the Court along with the complainant. Accordingly it permitted the parties to file their affidavits in replies and rejoinders before June 3, 2022 and placed the matter for hearing on June 8, 2022. .Khambata alongwith Senior Advocate Dr Mustafa Doctor with Advocates Kunal Dwarkadas, Rajendra Barot, Nafisa Khandeparkar, Ambareen Mujawar, Nitin Nair, Varun Thakur, Akshay Agarwal briefed by AZB Partners appeared for Star and Asianet Star.Seervai along with Senior Advocate Dr Birendra Saraf with Advocates Pradeep Bakhru, Nikhil Gupta and Priyanka Chaddha briefed by Wadia Ghandy & Co. and Advocates Avinash Amaranat and Tarun Donadia from Chandhiok and Mahajan appeared for ADNPL. Sundaresan appeared with Advocates Abhishek Venkatraman, Viswajit Deb, Manu Chaturvedi, Malhar Desai Hafeez Patanwala briefed by Juris Corp for the CCI.Disney was represented by Advocates Vivek Menon, Siddharth Chopra, Thomas George, Ranjeet Sidhu and Mudit Tayal from Saikrishna Associates..[Read Order]