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TMI Blog2015 (4) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... the Informant which allegedly inflicted financial harm on it, prima facie does not raise any competition concern. Otherwise also, the Informant did not provide any correspondence sent to the Opposite Party No. 3 regarding the dead stock lying at its store between February, 2009 (when the last sale of the Opposite Party No. 3's products from the Informant's Franchise was being made) and 16 January, 2014 when allegedly a request was made to take back the dead stock. Based on the foregoing, the Commission is of the considered opinion that the conduct of the Adidas AG Group, prima facie, does not amount to any contravention of the provisions of Section 4 of the Act. Therefore, even though the Adidas AG Group appears to be a dominant group in the relevant market defined supra, the facts available on record show no violation of provisions of Section 4 of the Act in the present matter. - Case closed down. - CASE NO. 10 OF 2014 - - - Dated:- 13-5-2014 - ASHOK CHAWLA, ANURAG GOEL, M.L. TAYAL AND S.L. BUNKER, JJ. K.K. Sharma for the Informant. ORDER UNDER SECTION 26(2) OF THE COMPETITION ACT, 2002 1. Mr. Om Datt Sharma, the Managing Partner of M/s Kalpataru Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh. The duration of 'the Agreement' was three years, subject to renewal. 6. Following the expiry of the term of 'the Agreement', the Informant was orally assured by the Opposite Party No. 3 that 'the Agreement' shall be replaced by a new franchisee agreement with more favourable terms. Based on its assurance, the Informant continued to carry on the business as per 'the Agreement' and purchased goods numerous times from the authorized distributor of the Opposite Party No. 3 and sold its product till February, 2009. 7. The Informant averred that thereafter, the Opposite Party No. 3 had failed to fulfil its several obligations such as to pay the amount due under 'the Agreement', to collect the unsold stocks/goods etc., which caused financial loss to it which amounts to imposition of unfair terms and conditions in contravention of the provisions of Section 4(2) (a) (i) of the Act. In this regard the Informant had sent last email to the Opposite Party No. 3 on 16.01.2014 to remind it to collect the unsold goods from it. 8. The Informant alleged that the terms and conditions of 'the Agreement' are not only unfair but also discrimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is observed that the Opposite Party No. I acquired 100% equity in the Opposite Party No. 2 on 02.08.2005 and the Opposite Party No. 2, through its wholly owned subsidiary Reebok (Mauritius) Company Limited, owns 93.15% equity share in the Opposite Party No. 3. Thus, based on the above said provisions of 'the Act' all the Opposite Parties can be treated as 'a group' for the purpose of Section 4 of the Act. 14. For examining the alleged abusive conduct of the Adidas AG Group, the first essential requirement is to delineate the relevant market and then, to assess its dominance in the relevant market followed by the examination of its alleged abusive conduct. 15. On the issue of relevant product market, the Informant contended that the market for premium branded sports goods including footwear, sports apparel, protective equipment, and sport-specific equipment like cricket bat, football, hockey sticks and pucks etc., manufactured by the prominent and well-known brands such as Adidas AG (brand Adidas ), Reebok (brand Reebok ), Nike AG (brand Nike ) and Puma AG Rudolf Dassler Sport (brand Puma ) constitutes a separate product market. 16. The Commission n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the relevant market as defined above. In support of its contention the Informant placed reliance on the ICRIER study report (June, 2010) on 'Sports Retailing in India' which states that Reebok held 50% of the market and Adidas held between 20%-25% in the premium branded sportswear market in India. Though Nike and Puma seems to operate in the same market but the majority of the market is catered by the Adidas AG Group which runs thousands of stores across India. However, the Informant has not provided the market share data of the Adidas AG Group pertaining to the geographic area of Noida. Based on the all India market share figure submitted by the Informant, it seems that the same set of players operate in the market for sale of premium sports-goods across India and the market share distribution of the Adidas AG Group and its competitors in Noida is likely to follow the similar pattern. Considering the nature of distribution of relevant product market in India, the Commission feels that market share of the players in Noida will not be substantially different from their market shares in India. Accordingly, the Commission, in consonance with the Informant's contention, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Informant on 27.08.2003 when the Opposite Party No. 3 was not part of the Adidas AG Group alleged to be dominant in this case. In August, 2005, the Opposite Party No. 1 acquired the Opposite Party No. 2 (and also the Opposite Party No. 3) and the Adidas AG Group came into existence. 'The Agreement' expired on 26.08.2006 as per the terms stated therein. The Informant submitted that 'the Agreement' continued thereafter on oral understanding between the parties on the same terms and conditions. On 27.03.2006, another franchisee agreement between the Opposite Party No. 3 and its another franchisee M/s Neelkanth Traders was entered into which was alleged to be more favourable than the one entered into between the Informant and the Opposite Party No. 3 in 2003. 22. The Commission finds two fundamental flaws in the allegations made by the Informant. Firstly, 'the Agreement' which was termed as unfair and arbitrary was entered into in 2003 when the alleged dominant group had not even come into existence. Secondly, even if the submission of the Informant regarding dominance of the Adidas AG Group is accepted post the formation of group in 2005, the conduct of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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