No resources to fight in court: Meru withdraws predatory pricing case against Ola, Uber

Cab company Meru Travel Solutions has withdrawn its competition case against Ola and Uber before the National Company Law Appellate Tribunal (NCLAT) citing resource crunch [Meru Vs CCI]

The company told the NCLAT that it was no longer in a position to pursue the 7-year-old appeal filed against Ola and Uber in the case concerning predatory pricing.

A Bench of judicial member Justice Yogesh Khanna and technical member Ajai Das Mehrotra allowed Meru to withdraw the appeal unconditionally.

The NCLAT recorded that Meru has been “struggling with severe impact on its operations and revenues” for a long time which has affected its ability to pursue the case.

“It is not viable for the appellant to continue with the same any longer and as such the management of the appellant has decided to withdraw the appeal,” the NCLAT noted

Ola and Uber did not oppose the request. Therefore, the NCLAT allowed the application and allowed the appeal to be withdrawn.

The appeal arose from a June 20, 2018 order of the Competition Commission of India (CCI), which had closed four information cases filed by Meru against Ola, Uber India Systems, Uber BV and Uber Technologies Inc. The cases concerned allegations under Sections 3 and 4 of the Competition Act, 2002.

Meru had moved the CCI in 2017 alleging anti-competitive practices by Ola and Uber in the radio taxi markets of Hyderabad, Mumbai, Kolkata and Chennai.

Its case was that Ola and Uber used deep pockets to offer unrealistic driver incentives and customer discounts, creating entry barriers and foreclosing competition. Meru alleged that the incentive policies were not based on sound business rationale but were meant to induce driver partners to remain loyal to their networks.

Meru claimed that Ola and Uber had collectively burnt around ₹13,000 crore in India on driver incentives. It also alleged that the companies were indulging in below-variable-cost pricing for over two years to reduce competition and oust rivals from the market.

The CCI rejected the allegations at the prima facie stage. It held that driver incentives could not by themselves be treated as anti-competitive agreements, particularly when drivers and riders could use multiple aggregator apps and switch platforms.

Meru appealed against this order before NCLAT.

With Meru now withdrawing the appeal, the CCI’s closure of the case remains undisturbed.

Meru was represented by advocates Udayan Jain, Abir Roy, Kajal Sharma, Vivek Pandey, Ranjan Mishra, Sasthibrata Panda, Harsh J and Biyanka Bhatia.

The respondents were represented by advocates Nisha Kaur Uberoi, Sarthak Pande, Akrathi Shetty, Rohan Bhargava, Sriharsh Peechera, Shruti Aggarwala, Samar Bansal, Rohan Arora, Aman Singh Sethi, Shivek Endlaw and Saachi Keile.

[Read Order]