2024 (2) TMI 1475 - CCI - Companies Law

Abuse of dominant position - Section 19(1) (a) of the Competition Act, 2002 - HELD THAT - From the perusal of the Information, subsequent submissions and material available on record, the Commission notes that the Informant is primarily aggrieved by the imposition of extra fees, including server costs, processing fees, gateway costs, and other convenience charges, without disclosing the complete details in the GST bill. For an analysis of the case under Section 4 of the Act, the first requirement is to delineate the relevant market as per Section 2(r) of the Act which comprises of relevant product market and relevant geographic market in terms of Section 2 (t) and 2(s) of the Act, respectively. The next step is to assess the dominance of OP in the relevant market so delineated, in terms of the factors enumerated under Section 19(4) of the Act. Once the dominance of an OP is established, the final step is to analyse the allegations pertaining to abuse of dominance in terms of Section 4 of the Act. The Commission notes that there are several players operating in the market for digital payment platforms in India which include several domestic and global players. In such a structure of the market, the Informant does not seem to be dependent on the OP. Furthermore, the Informant has not provided any evidence of OP being dominant. In the absence of the dominance of the OP in the relevant market, there is no occasion to examine the allegation of abusive conduct against it under the provisions of the Act. The Commission is of the considered opinion that no case of contravention of the provisions of Section 4 of the Act is made out against the OP for causing an investigation into the matter. Therefore, the matter is ordered to be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises and the prayer for the same also stands rejected.

Summary

Issues:
Alleged abuse of dominant position by a digital payment platform under the Competition Act, 2002.

Detailed Analysis:

1. Filing of Information and Allegations:
The Information was filed against the digital payment platform by Ayudha Foundation, alleging abuse of dominant position under Section 19(1)(a) of the Competition Act, 2002. The platform, OP, provides various services including online recharges and bill payments with cashback offers.

2. Imposition of Additional Charges:
The Informant claimed that OP started imposing 20% additional charges on using the digital wallet without providing complete details in the GST bill. The Informant also alleged that OP applied these charges arbitrarily.

3. Restrictions on Wallet Usage:
The Informant argued that OP's wallet functions as a closed wallet with limitations on bill payments, preventing full utilization of the wallet amount. This restriction was considered a violation of the Act by the Informant.

4. Prayers for Relief:
The Informant sought appropriate relief from the Commission if OP was found in violation of the Act. Additionally, interim relief was requested under Section 33 of the Act, urging for immediate financial sanctions against OP.

5. Subsequent Submissions:
The Informant made subsequent submissions highlighting OP's modifications to its cashback policy, wallet usage cap, and mandatory subscription service, demonstrating continued misuse of dominant market position.

6. Commission's Analysis:
The Commission noted the Informant's grievances regarding the imposition of extra fees without complete disclosure. It was observed that the Informant's concerns fell under the examination of Section 4 of the Act, related to abuse of dominance.

7. Relevant Market Determination:
The Commission delineated the relevant market as 'the market for digital payment platforms in India' despite the Informant not specifying it. However, OP's dominance in the market was not established, as the Informant failed to provide evidence of such dominance.

8. Conclusion and Decision:
As OP's dominance in the relevant market was not proven, the Commission concluded that no contravention of Section 4 of the Act was established. Consequently, the case was closed under Section 26(2) of the Act, and relief under Section 33 was denied. The Secretary was directed to communicate the decision to the Informant.