2014 (2) TMI 1398 - Commission - Indian Laws

Unfair and discriminatory conditions with respect to its Continuing Professional Education (CPE) scheme of OP - structured CPE credits and organization of the seminars/conferences/workshops for obtaining these credits - relevant product market - market for organizing recognised CPE Seminars/Workshops/Conferences - HELD THAT - There seems to be force in the allegations of the informant that the restriction put in by OP in not allowing any other organization to conduct the CPE seminars for CPE credits, createdan entry barrier for the other players in the relevant market. Further, the choice of the consumer (members of OP) in this case was being limited. The members of OP had no option, but to attend the seminars organized by OP (whatever be the quality of seminars) to get the requisite CPE credits.The restriction put on by OP does not meet the objectives sought to be achieved by the policy. There are hundreds of seminars and conferences organized every month across India by reputed chambers of commerce like CCI, FICCI, ASSOCHAM, NASSCOM, etc. However, these seminars/conferences are not recognised by OP for CPE credits. Prima facie, it appears to be an unreasonable restraint and the members CA of OP are left with no option but to compulsorily attend seminars organized by OP and its organs. Informant has pointed out in his information that the 64th Annual Report of OP for the Financial Year 2012-13 shows that the OP earned gross revenues of ₹ 45 crores from organizing seminars and conferences, which is around 8% of the OP s total revenue. Informant also pointed out there were no similar restrictions imposed by other accounting bodies of the world, i.e. in US, UK, Singapore, Australia, etc. The Commission directs the Director General (DG) to cause an investigation to be made into the matter and to complete the investigation within a period of 60 days from receipt of this order. If during the course of investigation, involvement of any other party is found, the DG shall investigate the conduct of such other parties including the conduct of group companies, if any, in terms of the proviso to section 27 of the Act - the DG is also directed to investigate the role (if any) of the persons who were in charge of, and were responsible to the companies for the conduct of the businesses of such companies, after giving due opportunity of hearing to such persons. Application disposed off.

Summary

Issues:
Alleged abuse of dominant position by the Opposite Party in imposing unfair and discriminatory conditions with respect to its Continuing Professional Education (CPE) scheme.

Analysis:

1. Enterprise and Service Definition:
The Commission analyzed whether the Opposite Party (OP) qualifies as an 'enterprise' under the Competition Act, 2002, and if it provides any 'service' as per the Act. Despite its regulatory functions, OP engages in commercial activities like conducting courses and publishing books, making it an 'enterprise.' The organization of CPE seminars is not a sovereign function exempt from the definition of 'enterprise.'

2. Market Definition:
The case focused on structured CPE credits and organizing seminars for obtaining these credits. The relevant product market was identified as "the market for organizing recognized CPE Seminars/Workshops/Conferences" with a pan India geographic market scope.

3. Dominant Position:
The Informant alleged that OP held a dominant position in the market for organizing CPE Seminars by only allowing its recognized units to conduct seminars, creating an entry barrier. OP's refusal to accredit external organizations limited consumer choice, indicating dominance in the market.

4. Competition Concerns:
The Commission found merit in the Informant's claim that OP's restriction on external organizations conducting CPE seminars created an unreasonable entry barrier. OP's exclusive control over seminar organization for CPE credits appeared to be an arbitrary exercise of power, potentially violating Section 4 of the Act.

5. Financial Aspects and International Practices:
The Commission noted the financial gains from organizing seminars and highlighted the absence of similar restrictions in accounting bodies worldwide. The revenue earned by OP from seminars raised concerns about the fairness and competition in the market.

6. Directive for Investigation:
The Commission directed the Director General (DG) to investigate the matter within 60 days, including examining the involvement of other parties and individuals responsible for the businesses. The order emphasized that the directive did not indicate a final opinion on the case's merits.

7. Final Order:
The Commission ordered the Secretary to provide a copy of the order to the DG for immediate action, ensuring a thorough investigation into the alleged abuse of dominant position by OP in its CPE scheme.

This detailed analysis of the judgment highlights the key legal considerations, market dynamics, competition concerns, and the subsequent directive for investigation issued by the Competition Commission of India.