2017 (3) TMI 1692 - SC - Indian Laws

Jurisdiction of the Competition Commission of India - Section 3 of the Competition Act, 2002 - protection in the name of language - prohibition on telecasting dubbed serial Mahabharat . Held that - In the instant case, admittedly the Coordination Committee, which may be a person as per the definition contained in Section 2(l) of the Act, is not undertaking any economic activity by itself. Therefore, the agreement of such a person , i.e. Coordination Committee, it may not fall under Section 3(1) of the Act as it is not in respect of any production, supply, distribution, storage, acquisition or control of goods or provision of services. The Coordination Committee, which is a trade union acting by itself, and without conjunction with any other, would not be treated as an enterprise or the kind of association of persons described in Section 3. A trade union acts as on behalf of its members in collective bargaining and is not engaged in economic activity. In such circumstances, had the Coordination Committee acted only as trade unionists, things would have been different. Then, perhaps, the view taken by the Tribunal could be sustained. The Coordination Committee (or for that matter even EIMPA) are, in fact, association of enterprises (constituent members) and these members are engaged in production, distribution and exhibition of films. EIMPA is an association of film producers, distributors and exhibitors, operating mainly in the State of West Bengal. Likewise, the Coordination Committee is the joint platform of Federation of Senior Technician and Workers of Eastern India and West Bengal Motion Pictures Artistes Forum. Both EIMPA as well as the Coordination Committee acted in a concerted and coordinated manner. They joined together in giving call of boycott of competing members i.e. the informant in the instant case and, therefore, matter cannot be viewed narrowly by treating Coordination Committee as a trade union, ignoring the fact that it is backing the cause of those which are enterprises - When some of the members are found to be in the production, distribution or exhibition line, the matter could not have been brushed aside by merely giving it a cloak of trade unionism. For this reason, the argument predicated on the right of trade union under Article 19, as professed by the Coordination Committee, is also not available. When the lenses of the reasoning process are duly adjusted with their focus on the picture, the picture gets sharpened and haziness disappears. One can clearly view that prohibition on the exhibition of dubbed serial on the television prevented the competing parties in pursuing their commercial activities - the CCI rightly observed that the protection in the name of the language goes against the interest of the competition, depriving the consumers of exercising their choice. Acts of Coordination Committee definitely caused harm to consumers by depriving them from watching the dubbed serial on TV channel; albeit for a brief period. Appeal allowed.

Summary

Issues Involved:
1. Jurisdiction of the Competition Commission of India (CCI) under Section 3 of the Competition Act, 2002.
2. Definition and determination of 'relevant market.'
3. Whether the actions of the Coordination Committee and EIMPA constituted anti-competitive agreements under Section 3 of the Act.
4. The applicability of the Act to trade unions and their actions.
5. The impact of the actions on competition and consumers.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Competition Commission of India (CCI) under Section 3 of the Competition Act, 2002:
The judgment explores the scope of Section 3, which prohibits anti-competitive agreements affecting the production, supply, distribution, storage, acquisition, or control of goods or services. The CCI formed a prima facie opinion that the actions of EIMPA and the Coordination Committee were anti-competitive and assigned the matter to the Director General (DG) for detailed investigation. The DG concluded that the actions of the Coordination Committee and EIMPA violated Section 3(3)(b) by restricting and controlling the market and supply of dubbed versions of serials on TV channels.

2. Definition and determination of 'relevant market':
The DG identified the 'relevant market' as the 'film and television industry of West Bengal.' The Coordination Committee and EIMPA were found to be active in this market. The CCI's majority opinion concurred with this definition, while the minority view identified the 'relevant market' as the 'broadcast of TV serials.' The Tribunal upheld the minority view, defining the relevant market as 'telecasting of the dubbed serial on television in West Bengal.' The Supreme Court, however, concluded that the relevant market was the entire film and television industry of West Bengal, considering the broader impact of the Coordination Committee's actions.

3. Whether the actions of the Coordination Committee and EIMPA constituted anti-competitive agreements under Section 3 of the Act:
The CCI's majority held that the Coordination Committee's actions, including letters and demonstrations, exerted pressure on TV channels, leading to the stoppage of the dubbed serial's telecast. This was deemed an anti-competitive agreement under Section 3. The Tribunal, however, found that the Coordination Committee, as a trade union, was not engaged in economic activities and thus not subject to Section 3. The Supreme Court disagreed, noting that the Coordination Committee and EIMPA acted in concert and their actions affected the entire film and television industry, constituting an anti-competitive agreement.

4. The applicability of the Act to trade unions and their actions:
The Coordination Committee argued that it was a trade union and not an 'enterprise' under the Act, claiming protection under Article 19(1)(a) of the Constitution. The CCI's majority opinion rejected this, stating that the Coordination Committee's actions had an appreciable adverse effect on competition. The Tribunal accepted the trade union argument, but the Supreme Court held that the Coordination Committee, acting in concert with EIMPA, engaged in activities affecting competition, thus falling within the Act's purview.

5. The impact of the actions on competition and consumers:
The DG and CCI's majority found that the Coordination Committee's actions hindered competition by preventing the entry of dubbed serials into the market, limiting consumer choice, and creating barriers to new content. The Supreme Court concurred, stating that the actions deprived consumers of watching the dubbed serial and hindered competition in the market, violating Section 3(3)(b) of the Act.

Conclusion:
The Supreme Court allowed the appeal of the CCI, concluding that the Coordination Committee's actions constituted an anti-competitive agreement affecting the entire film and television industry of West Bengal, thereby violating Section 3 of the Competition Act, 2002. The relevant market was determined to be the entire film and television industry, and the actions of the Coordination Committee and EIMPA were found to have an appreciable adverse effect on competition.