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TMI Blog2013 (5) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... ndue restrictions on mobility of players and on prospective private professional leagues leading to denial of entry to competing leagues. 2. Parties to the Case and related parties. 2.1. The Informants in this case are a group of former Olympians and professional Indian Hockey players namely Sh. Dhanraj Pillay, Sh. Gundeep Kumar, Sh. Gurbax Singh Grewal, Sh. Balbir Singh Grewal, Sh. Alloysius Edwards and Sh. V. Baskaran. 2.2. The Opposite Party, Hockey India, is the National Sports Federation of India for the sport of Hockey affiliated to the Indian Olympic Association (IOA), Asian Hockey Federation (AHF) and International Hockey Federation (FIH). 2.3. A related party to HI is FIH. FIH is the international governing body for the sport of Hockey recognized by the International Olympic Committee (IOC). FIH is responsible for integrity of the sport at the international level and to ensure the development of sport throughout the world. 2.4. Indian Hockey Federation (IHF) is the National Sports Federation for the sport of Hockey affiliated to Indian Olympic Association, but it is not affiliated to FIH or AHF. IHF is the co-organizer of World Series Hockey (WSH) League alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The informants made the following submissions in support of their allegations against HI 3.6. Jurisdiction issue 3.6.1. The informants submitted that HI, which is a society registered under Societies Registration Act 1860 qualifies to be a person as defined under Section 2(l)(v) of the Act. Also, the informant submitted that HI is engaged in activities related to conducting and governing of international hockey tournaments in India, facilitating sponsorship for the team, obtaining training facilities etc. According to the informants, these activities are commercial and HI is an enterprise under section 2(h) of the Act. 3.7. Abuse of dominance 3.7.1. Relevant Market The informants defined the relevant market as, the market for conducting and governing international hockey activities for both men and women in India . The definition given by informants covered in their view, both demand and supply side substitutability. 3.7.1.1. Demand Side substitutability The informants submitted that the hockey players are the consumers of services rendered by HI and the players do not consider the services of conducting and governing international hockey activities for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecognition. 3.7.1.4. On the issue of geographic market the informants submitted that uniformity in the conditions of CoC agreements with players implies the market is pan India. On the possibility of extending the market beyond the boundaries of India, the informants averred that that development of the game, requirement of players and factors relevant for team selection vary from country to country restricting the relevant market to India. 3.8. Assessment of Dominance In their submissions the informants have stated that HI is in a dominant position in the relevant market as defined on account of the following factors: i) Monopoly position of HI as a regulatory body for Hockey in India: Emphasis was laid on the monopoly of HI on account of the pyramid structure of sports governance and consequent endorsement from FIH as the National Association for Hockey in India. HI is the only body empowered to select the national team to represent India in international competition and to enter into CoC agreements with players. These powers enable HI to impose restrictive conditions on the players movements and impose sanctions on players on disciplinary grounds and is the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumer Commission) where it was noted that the power of IHA to expel or suspend members of the IHA for participating in unsanctioned events would not only restrict the number of leagues in the market and the overall consumer choice but would also affect the choices available to Ice Hockey players. 3.10. Anticompetitive agreements: Violation of Section 3(4) According to the informants, the CoC agreement which is entered into between HI and the players is a vertical agreement and is in the nature of an exclusive supply agreement as it exclusively ties down the player to HI and restricts their options to participate in other tournaments. 3.10.1. All Hockey players that sign the CoC agreement are entirely dependent on HI's approval to play in any event. HI is in a position to refuse permission even if there is no conflict in the schedule of such event when it is the duty of a player to represent India in an international tournament. Specific clauses of CoC Agreement related to seeking of NOC, disciplinary actions against the players were pointed out to bring out the alleged exclusivity. 3.10.2. The informants also submitted that this agreement causes appreciable advers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no irreparable or irretrievable harm to the players and the application filed by informants under section 33 was declined. 6. DG Investigation Report The DG investigated the following key issues pertaining to the case: i. jurisdiction of the Commission on HI and FIH and the application of competition laws. ii. delineation of the relevant market in the case iii. assessment of dominance in the relevant market. iv. allegations related to violation of Section 4 of the Act v. allegations related to anti-competitive agreements in violation of Section 3 of the Act. On the basis of investigation carried out, the findings of DG are as under: 6.1. Jurisdiction on HI and FIH and application of competition laws. 6.1.1. On the issue of jurisdiction of the Commission the DG in his report has observed that, while it is true that HI and FIH are non-profit organizations, however, the activities carried out by the HI as well as FIH such as grant of franchisee rights, media rights, television rights, sponsorship rights, and all other rights, involves generation of revenue and has a commercial component to it. Such activities have to be seen differently from the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mants that given the facts of the case, hockey players are the consumers of services rendered by HI. Accordingly, DG considered the supply side substitutability from the viewpoint of HI and demand side substitutability from the view point of Hockey players to define the relevant market. 6.2.2. The DG report recognizes that the conduct and governance of activities for a certain sport is a specialised area of service which involves important responsibilities and crucial functions by service provider. Conducting and governing international hockey activities in India constitute a separate and unique service market and the supply of such service cannot be considered substitutable or interchangeable with any other service. 6.2.3. The market for conducting and governing international hockey is different from market for conducting and governing domestic hockey activities because conducting international hockey activities require fulfilment of additional conditions in form of recognition by international sporting associations such as FIH etc. 6.2.4. The DG has observed in his report that the Indian hockey players who are the primary beneficiaries of the services rendered in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behaviour. 6.3.2. To DG, it was the pyramidal structure that leads to creation of regulatory barriers which constrain entry in the relevant market as defined. Equally important fallout of these regulatory powers of HI is that, the hockey players who are the consumers and constitute the demand side of the market, are not in any position to exert countervailing pressures on HI, primarily because of the sole mandate of HI to select the members of Indian National Hockey Team. On the aspect of position of strength of National Associations' vis a vis the players, DG referred to the judgment cited by the informants in the Snooker case, where WPBSA was the regulatory body for professional Snooker where it was held, From the point of view of the player, whether one considers him as seller (of his services) or as buyer (of the services of a tournament organizer), he is dependent on tournament organizers, since without tournaments he will have no opportunity to exercise his skills for profit. Equally a tournament organizer depends on players, since the players are the essential basic ingredient of the tournament. However, whereas a tournament organizer would have skills and resourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and forfeiting their right to play in a national hockey team for a period of 12 months is anticompetitive in violations of the provisions of the Act. 6.4.2.4. Based on the statement of Sh. Dhanraj Pillay and the information provided by the Ministry of Youth Affairs and Sports vide their letter dated 05.06.2012, the DG concluded that the Indian Hockey Team which went to London to play 4 nation test matches and 7 nation Azlan Shah hockey tournament in Malaysia, did not include any of the players who participated in WSH. Similarly the Junior team also have not taken any player, who had participated in the WSH. 6.4.2.5. In light of the above mentioned facts, DG concluded, that HI acting through FIH has abused its dominance to maintain their control over hockey sports in India. They have restricted players to participate in any match or event which is not sanctioned by them. Their conduct has also resulted in foreclosure of market for any other enterprise to organize hockey tournaments. It has not resulted in any benefit or advantage to the hockey and hockey players as well as consumers and spectators in any manner whatsoever. DG also noted that HI FIH had a plan of launching hoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd seven nations Azlan Shah Hockey tournament in Malaysia, none of the players who participated in the WSH, and junior players who had participated in WSH were included in the squad. 6.5.5. The DG further observes that the CoC signed by the hockey players required the HI approval to play in any event by way of NOC. As such the pre-condition of not allowing the top hockey players to play unsanctioned event on a threat of not taking them into the national hockey team selected to play international Olympic match is unfair and without any justification, places restrictive conditions on hockey players in India. Further, the action of the HI of not taking any player in the national team who had played WSH in 2012 substantiates the allegation of the IP. 6.5.6. The DG also concluded that, by virtue of the powers vested in the HI vis- -vis the selection of the national team, HI is able to determine the tournaments in which the players can participate and the tournaments in which they cannot. It is obvious that hockey tournaments are only possible when adequate numbers of players are willing to participate in them. Without the consent of HI, players are effectively prohibited from part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c 3(4) of the Act and the allegation of contravention of this section. Whether the decision of FIH HI to impose ban on WSH attracts provisions of section 3(3) of the Act? 6.6.2. The DG stated that the recommendations made by an association are deemed to be arrangement between the members of the association and are covered under the definition of agreement as contained in the Act. 6.6.2.1. It was found that the decision regarding sanctioned and unsanctioned events was taken during the meeting of its executive body during 4th-6th March 2011. Article 18 of the FIH Statute provides the method of amendment or modification in the bye-laws. Article 18 of Statues and Bye-laws of FIH says that. these statutes may be amended added to or rescinded by a resolution of the Congress passed by a special majority. no such resolution shall be submitted to the Congress unless the prior notice prescribed by the Bye-laws has been given to all NAs. any modification of the statutes must be proposed by a member or by the executive Board. the proposal must reach the CEO not later than three (3) months before the date fixed for the ordinary meeting of the Congress. 6.6.2.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mately impedes competition in the market. 6.6.2.6. As per the DG, the inquiries revealed that the opposite party and FIH has taken decisions as well as given directions to its members to not deal with WSH. The activities of any association should not be intended to restrain competition or to harm consumers. But, the purpose of the association should be to promote competition and to benefit consumers. Neither the association nor any of its committees or activities should be used for the purpose of bringing about or attempting to bring about any understanding or agreement, written or oral, formal or informal, express or implied, between and among competitors with regard to their prices, terms or conditions of sale, distribution, volume of production, territories, customers, or credit terms. Each member of the association is obligated and required to exercise its independent business judgment in pricing its services or products, dealing with its customers and suppliers, and choosing the markets in which it will compete. No activity or communication of the association or any of its members, in connection with their participation in the association, shall include any discussion or st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of sport which is a public good, promoting the public interest by organizing, governing and regulating the sport in the way that will allow it to flourish. It was also stated that sports governing bodies are not a commercial enterprise working for profit to generate a return for investors, and its organizational, governance and regulatory role is not an economic activity. 7.2.2. The issue of 'specificities of sport' recognized in number of cases by the European Court of Justice and European Commission was also raised. Emphasis was placed on the fact, that given the specificities of sport, the competition law must be applied with sufficient flexibility to take account of the unique features inherent in sports that distinguish it from other sectors. 7.2.3. The parties cited the decisions of EC in cases such as Walrave (Case 36/74 Walrave and Koch [1974] ECR 1405), Deliege (Case C-191/97 Deliege[2000] ECR), Meca Medina (Case C-519/04 P, David Meca Medina and Igor Majcen V. Commission of the European Communities), which have considered that competition laws should not stop sports Federations issuing regulations required for proper organization and conduct of the sport, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oadcast the event worldwide and therefore the relevant geographic market cannot be pan India. 7.4. Assessment of Dominance 7.4.1. HI submitted that the pyramid structure for regulation and organization of competitive sport is vital and in line with established sport structure. HI as the National Association of India, is entrusted with upholding the values enshrined in the Olympic Charter. The sole purpose and function of sports governing bodies such as HI is to act as custodian of the sport in promoting the public interest by organizing, governing and regulating the sport in the way that will allow it to flourish. It stated that regulatory functions cannot be assessed against the yardstick of market forces. 7.4.2. As regards DG's findings on regulatory powers being the source of dominance, HI submitted that the responsibility of sanctioning sports events being held in their country and involving players of that nationality comes from the unique nature of governance of organized sport and having and exercising such regulatory authority does not in itself result in abuse of dominant position. 7.4.3. Moreover, HI cannot be held to be in a position of dominance as it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to safeguard that integrity; and (ii) to ensure that due priority is given in the sporting calendar to international events (i.e. events between teams representing different nations). 7.5.3.1. FIH also clarified that the rules requiring participants in official ('sanctioned') events not to participate in unofficial ('unsanctioned') events are inherent in and indispensable to the proper organization and conduct of competitive sport. It was submitted that unsanctioned events threaten to undermine the sporting imperatives on account of: (a) Unsanctioned events are not developed as an integrated part of the official sporting calendar and thereby create potential conflicts between different stake holders that could be damaging to the sport. (b) Organizers, participants of unsanctioned events are not accountable for compliance with rules and regulations of the sport, and pose a significant risk to sport as the public is unlikely to appreciate the distinction between unsanctioned and sanctioned events. Any problem associated or arising in with the unsanctioned events would cause damage to the reputation of the entire sport. (c) Private entrepreneurs are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons that are anti-competitive in nature, without countervailing considerations, may be determined to be anti-competitive, but in the instant case, Nimbus never applied to FIH for sanction of WSH. FIH referred to the communications with WSH to highlight its position on the issue. (v) On the regulations being aimed to counter WSH 7.7.1. FIH defended its regulations by stating that even though the regulations were issued after the announcement of WSH, yet they were applied prospectively and the players/officials who entered into binding agreements with WSH before 31 March 2011 were not to be acted against. When FIH announced the regulations, it is stated that these are not to put off outside interest and investment, rather the aim is protecting the integrity and long term interest of the sport and to ensure that athletes give precedence to participation in national representative teams over other events. The regulations are not limited to India, they are applied to all 120+ countries where FIH has members. (vi) On the harm to WSH caused by regulations 7.8.1. FIH submitted that all the 160+ players who signed for Nimbus prior to 11 March 2011 were able to play in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am official must be entered by his NOC. It is therefore, essential for every National Association (NA) to comply with the rules of the concerned IF. In India, Hockey India is the NA affiliated to FIH. In order to maintain its affiliation to FIH, and consequently for India to field its team in international events, it is necessary for Hockey India to comply with all rules and regulations of FIH. Failure to comply with FIH rules by any NA could result in consequences that include suspension or expulsion, thereby precluding India from participating in international events, including events such as the Olympics, Asian Games and Commonwealth Games. 8.2.2. Article 5.4 of the FIH Bye laws (as on 31.03.2011) provides for sanctioned and unsanctioned events. Domestic Events have been defined as events that do not involve national representative teams, while International Events are events where national representative teams compete and include multi sport events such as the Olympics, Commonwealth Games and Asian Games. 8.2.3. The sanctioning authority for Domestic Events depends on whether the event involves athletes from other countries/continents. If a Domestic Event involves pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of change of dates of the training camps with WSH, HI submitted that the training calendar for the Indian team was prepared and submitted to Sports Authority of India almost a year in advance, well before the announcement of WSH. The schedule for the preparation camp of the Olympic qualifiers was submitted to the Sports Authority of India in early 2011 and was approved by Ministry of Youth and Sports on 07.03.2011. The dates for the preparatory camp were recorded in these minutes as 15th December 2011 to 06th January 2012 and from 16th January 2012 till the Olympics qualifier. On DG's findings of refusal of sanction to WSH 8.4.1. HI submitted that no sanction was sought by the organizers of WSH from HI, and therefore HI had no occasion to refuse such a sanction. It was further submitted that HI is not a sanctioning authority for such an event. Allegations of contravention of Section 3 of the Act. 8.5.1. On the aspect of DG Report, that the adoption of FIH Bye laws by HI amount to an anti-competitive agreement under section 3(3)(b) of the Act. The submissions of HI and FIH on this matter are given below. 8.5.2. HI submitted that it has not taken any action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of restrictive conditions by Hockey India, the National Association for the sport of Hockey, on players in un-sanctioned prospective private professional leagues resulting in denial of entry (permission) to competing leagues. Duality of roles assigned or appropriated by the designated National Association also raises concerns about the possible violation of the Competition Act, 2002. 9.1. The character of sports has evolved over a period of time and the organization of sports events generates significant revenues. The commercial dimension of sports is enormous and according to a recent A.T. Kearney study of sports teams, leagues and Federations, today's global sports industry is worth between ?350 billion and ?450 billion ($480-$620 billion).This includes infrastructure construction, sporting goods, licensed products and live sports events. 9.2. Sports Federations across the world have opted for a non-profit institutional form, to highlight that revenue forms a secondary consideration and generation of important values such as team spirit, solidarity, tolerance and fair play are primary objectives of the sport. But with surge in revenues, there is every likelihoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts, such as uniform rules and a uniform timetable for competitions, are taken into account (Source: Opinion of Advocate-General in MOTOE case). ii) Pyramid structure is essential for organization of national championships and the selection of national athletes and national teams for international competitions. iii) Enforcement of rules that ensure proper organization and prioritisation of international competition as the international competition is recognized to be an essential and valuable feature of sport. (Source: Case 36/74 Walrave and Koch [1974] ECR 1405). iv) Enforcement of rules that protect integrity of the sport and maintain public confidence. What are the potential competition concerns that arise because of pyramid structure? 9.4.3. The structure implies that the organizations responsible for regulating the sport and committed to orderly development of the sport are also the organizers of sports or the commercial beneficiaries of sport. As the revenues have soared of late, a new dimension of pyramid structure has surfaced. There are now clear concerns that the pyramid structure can be used to engage into conducts such as infringing the free movements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sports organizations has brought a number of areas to the Commission's attention, which are addressed below. The Commission considers that most challenges can be addressed through self-regulation respectful of good governance principles, provided that EU law is respected, and is ready to play a facilitating role or take action if necessary. 9.5.3. In context of this case, while the Commission appreciates the relevance and requirement of pyramid structure with the consequence of one National Association per sport, per Member State, it is the duty of the Commission that their functioning and activities must not violate the objectives of the Act. The Commission affirms the right of self-regulation of sports bodies with regard to issues, which are purely sporting, such as selection of teams, formulation of rules of the sport etc. or, even the issues which have economic aspects such as grant of various rights related to sports events or organization of leagues etc. However, given the inherent overlap of regulation and economic gains, outright grant of immunity to the rules and method of application of the rules by the federations is not possible. 9.5.4. It is important to cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered it appropriate to examine the issue of jurisdiction in detail and considered the international jurisprudence and literature on sports sector to draw relevant broad principles, and also the provisions of the Competition Act. The general arguments of the opposite parties have centred on their non-profit institutional form and their so called non-economic activities. The pleas of sports federations not being subject to Competition laws, given their non-profit form was observed in a case against ELPA (Source-MotosykletistikiOmospondiaEllados NPID (MOTOE) v. Elliniko Dimosio, Case No. C-49/07, THE COURT (Grand Chamber)) (the authority participating in authorisation by a public body of motor cycling events and also responsible for organising motor sports competitions in Greece). It was held that: ...The fact that MOTOE, the applicant in the main proceedings, is itself a non-profit-making association has, from that point of view, no effect on the classification as an undertaking of a legal person such as ELPA. First, it is not inconceivable that, in Greece, there exist, in addition to the associations whose activities consist in organising and commercially exploiting motorc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s associations and International Sports Associations may be both undertakings under Articles 81 and 82 EC and associations of undertakings under Article 81 EC. Sports associations are undertakings where they themselves carry out economic activity, e.g., by commercially exploiting a sport event. Sports associations are associations of undertakings under Article 81 EC to the extent they constitute groupings of sport clubs/teams or athletes for which the practice of sport constitutes an economic activity. 9.7.4. The Commission also considered this issue in deciding on the BCCI case, (In Re BCCI Case No. 61/2010). The Commission noted that the Act focuses on the functional aspects of an entity rather than institutional aspects. The scope of the definition on the institutional front has been kept broad enough to include virtually all the entities as it includes 'person' as well as departments of the government. The specific exception has been provided only to the activities related to the sovereign functions of the government. It is in substance the nature of activity that would decide whether the entity is an enterprise for the purpose of the Act or not. The aspect of 'o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ams. 9.8.2. An International Event is defined as, an event in which National Representative Teams compete. It includes (without limitation) events staged as part of a multi-sport event such as the Olympic Games. FIH Bye laws in relation to sanctioning of events, provide. Where a proposed Domestic Event would be open only to teams in membership of or affiliated to one National Association, and would be staged entirely within that National Association's territory, then in order for that event to be recognised as a Sanctioned Event it must be organised or sanctioned by that National Association. Where a proposed Domestic Event would be open to more than one National Association's teams and/or Athletes, and/or would be staged by one National Association in another National Association's territory or in more than one National Association's territory, then in order for that event to be recognised as a Sanctioned Event: a. if the event is open only to teams and/or Athletes in membership of or affiliated to National Associations within one Continental Federation, and the event would be staged entirely within that continent, then it must be sanctioned by that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event which makes sports Federations themselves as consumers. In this multitude of relationships, defining the relevant consumer a priori would enable defining the relevant market. 9.8.8. In the instant case, there are two issues at broader level, the first relates to alleged practices of FIH/HI to foreclose the market for rival leagues by bringing in regulations related to sanctioned and unsanctioned events; the second relates to restrictive conditions imposed by HI on players through the CoC agreement. The allegations of foreclosure of rival leagues, grant of media rights and imposing restrictive conditions on movement of players form the crux of almost all the major antitrust inquiries in the sports sector. In order to properly evaluate the competition concerns, the Commission considered the relevant markets for the two allegations separately. The Commission opines that the concerns of abuse of dominance by an entity vis a vis its rivals can best be examined in the market for final product which is the event and whose consumer is the ultimate viewer of the sport. The second issue of restrictive conditions on the Hockey players however needs to be examined in context of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent entertainment forms as substitutes and therefore a case for broadening the market. The Commission also considered the substitutability of cricket with other entertainment forms in the BCCI case, but is of the opinion that the issue is of more relevance in examination of cases where allegations have an impact on media and broadcasting industry. For a live viewer of the sport, the entertainment from sport may not be regarded as substitutable with other general entertainment forms. 9.8.14. As regards the price factor or defining the relevant market, Considering the basic test of non-transitory relative price rise of 5% to 10% also known as SNNIP test and in considering consumer behaviour towards sport, it is unlikely and difficult to believe that a consumer would substitute hockey event with any other form of entertainment viz. Films, TV shows etc. or any other sporting event. 9.8.15. The Commission, after taking note of aforesaid factors concludes that the relevant product market, as regards the allegation of foreclosure of rival leagues is, the market for organization of private professional hockey leagues in India . This definition is neutral of the definitions of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the monetary consideration is in the form of match fees etc. which implies that HI is the consumer in this market. The arguments cited by DG and informants based on treatment of hockey players as consumers on the aspects of demand and supply side substitutability with HI being the consumer are valid in so far as delineating the relevant market market for services of hockey players 9.8.20. The definition of the informant and the DG pertain to Relevant Market which is significant for analysis of abuse of dominance vis a vis rival leagues only and as such fails to bring out the criticality of arguments which hinge on labour restrictions. More importantly, the governance aspect emphasized by DG and informant as a source of dominance cannot be part of definition of the market in understanding the scope of abuse of dominance vis a vis players and officials involved in sports of Hockey . Commission considers it appropriate to define a relevant market in the context of the specific allegation more so where there are multitude of consumers as in the case of sports as pointed out earlier. Assessment of Dominance in the market for organization of private professional hockey activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and to set the conditions in which those events are organized, thereby placing that entity at an obvious advantage over its competitors. Such a right may therefore lead the undertaking which possesses it to deny other operators access to the relevant market... [Source C-49/07, REFERENCE for a preliminary ruling under Article 234 EC, from the Diikitiko Efetio Athinon (Greece), made by decision of 21 November 2006, received at the Court on 5 February 2007, in the proceedings, MotosykletistikiOmospondiaEllados NPID (MOTOE) v. EllinikoDimosio, THE COURT (Grand Chamber)] 9.9.5. The Commission having due regard to the factors mentioned above and the decision in case of BCCI and of Grand Chamber of ECJ in ELPA case concludes that HI is in a dominant position in the market for organizing private professional hockey leagues in India. Assessment of Dominance in Market for services of hockey players. 9.9.6. As emphasised having due regard to the complementarity of the consumer and the provider of services for delivering a final product, the Commission considered it appropriate to define the relevant market as that of services of hockey players. In such a market, assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DG in his report noted that the conditions relating to sanctioned and unsanctioned events were introduced by FIH and implemented in India by HI as an afterthought to the announcement of WSH. DG also pointed out to the actions of HI and FIH issuing warning letters to players from participation in WSH and non-selection of players who played in WSH in the Indian Hockey Team which went to London and Malaysia. According to DG, the restrictions imposed by HI resulted in foreclosure of market for any other enterprise to organize hockey tournaments in contravention of Section 4(2)(a)(i) and Section 4(2)(c) of the Act. 9.10.2. DG further noted the changes made in conditions of CoC Agreement relating to disciplinary action against players participating in unsanctioned events, and, requirement of NOC by players from HI before playing for any foreign team/club etc other than Hockey India or their registered Member Unit. According to DG, the pre-condition of not allowing the top hockey players to play unsanctioned event on a threat of not taking them into the national hockey team selected to play international Olympic match is unfair and without any justification, and places restrictive cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imacy of national representative competition, deter free riding on the investments by national associations, maintaining the calendar of activities in a cohesive manner not cutting across the interests of participating members, preserving the integrity of the sport, etc. are inherent to the orderly development of the sport, which is the prime objective of the sports associations. Moving further, on the proportionality aspect, the Commission opines that proportionality of the regulations can only be decided by considering the manner in which regulations are applied. 9.11.2. It is the manner of applying regulations that raise competition concerns as it may be used as a tool for foreclosing new entrants. The present allegations centre on foreclosure of market to rival leagues by sports associations in the garb of rules and Bye laws relating to sanctioned and unsanctioned events. In the present case, the Commission notes the following: 9.11.3. Firstly, no approval was sought by WSH. The rules contained in FIH Bye laws stated that, Where a proposed domestic event would be open only to teams in membership of or affiliated to one National Association, and would be staged entirely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay for WSH after the regulations related to unsanctioned events came in force. This implies that FIH was not advocating disciplinary action on those players/officials who entered into binding agreements with WSH before the regulations of FIH were notified. 9.11.7. Thirdly, based on the reply from Ministry of Youth and Sports Affair (MoYAS) on the selection of probables for the Indian team, DG had concluded that none of those players, who participated in the WSH series were included in the 48 core probable and subsequent tours to London and Malaysia. The Commission considered HI's submissions that, the reason behind the players not being selected was their non-participation in training camp, which otherwise was mandatory, and not owing to participation of players in WSH. HI had also clarified that the dates for training camp were as per schedule approved by Ministry almost a year in advance and HI also stated that the list of probables were issued before commencement of WSH. Thus, the Commission noted that the evidences are in sufficient to conclude that HI has indeed acted against the players who participated in WSH. 9.11.8. The Commission thus concludes that the allegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The standards applied to test the effect of vertical restraints on competition have already been spelt out in the Commission's Order in case no. 24 of 2011, Sonam Sharma vs. Apple Inc. and Ors. 9.12.3. There the Commission held that for concluding that a vertical agreement has caused an appreciable adverse effect on competition, the person imposing the vertical restriction should be in a dominant position and the intent behind the restriction should be foreclosure, without any obvious efficiency justifications. 9.12.4. Given, that the allegations in respect of violation of section 3(4) and 4(2)(c) are arising from the same instrument i.e. CoC agreement, the Commission considers it appropriate to examine the CoC Agreement in detail for contravention of Section 3(4) and 4(2)(c) of the Act. 9.12.5. At the outset it needs to be reiterated that the conditions contained in CoC agreement need to be analysed for their restrictive effects in conjunction with specificities of sports. The conditions relating to restrictions on participation (non-participation the phrase used) in unsanctioned events and players being subjected to requirement of obtaining NOC for participating in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antiated. 9.13. After evaluation of the primary issues which were the core of the case, the Commission also considers the findings of DG on the aspect of adoption of FIH bye laws by HI being in contravention of Section 3(3)(b) of the Act. Whether there is any contravention of Section 3(3)(b) of the Act? 9.13.1. The Commission notes and agrees with the submissions of HI on the aspect of hierarchy, and not being entitled to vote at the time of adoption of resolution. Accordingly, the Commission concludes that adoption of Bye laws does not amount to a horizontal agreement in contravention of Section 3(3)(b) of the Act. Order The Commission after considering all the aspects relating to the case concluded that there is no contravention of Section 3(3)(b), 3(4), 4(2)(a), 4(2)(c) and 4(2)(e) of the Act in this instance. However, the nature of the present system itself, with the possible conflict of interest between the 'regulatory' and 'organising of events' roles of Hockey India, has raised certain potential competition concerns in the mind of the Commission. The manner in which rules relating to sanctioned and unsanctioned events and restrictive conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th and after due diligence, to ensure that its regulatory powers are not used in any way in the process of considering and deciding on any matters relating to its commercial activities; and also set up a streamlined fair and transparent system of issuing NOCs to the players for participating in events organized by foreign teams/clubs. In view of the discussion above and the structure of the opposite party being akin to BCCI, having dual role of regulator as well as organizer; the possibility of transgression of the lines shall always remain there. The Commission is alive to this fact and as and when any new facts come to its notice, the Commission shall consider them in the light of responsibilities enjoined upon it by the Act and shall act accordingly. The Secretary is directed to inform the parties accordingly. R. Prasad (Member) (Dissenting) Order under Section 27 of the Competition Act 10. Six Olympians, who had represented Indian Hockey in various tournaments world over and who had brought laurels to the country have submitted information against Hockey India on 15.11.2011 for abusing its dominance in the field of hockey. 11. Hockey India (H.I.) is a society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their affiliates different state associations in India. Thus, hockey like sports is regulated from the grassroots level to international level. In hockey between the national federations and FIH, there are also continental federations. In the year 2010, IHF challenged the jurisdiction of FIH and HI in the Delhi High Court. On the other hand around the same time Ministry of Sports derecognised HI and recognised IHF. The Delhi High Court in its judgment held IHF to be the correct body to administer sports of hockey in India. Further against its derecognition by the Sports Ministry HI filed a writ in the Supreme Court. Both the writ and the SLP filed in the Supreme Court are pending disposal by the apex court. Meanwhile the Supreme Court finding that as FIH was not willing to recognise IHF concluded that if permission was not allowed to HI, no team from India would be able to participate in International tournaments. Therefore by interim orders it permitted HI to select teams for participation in international events. 13. In the year 2010, Indian Hockey Federation and Nimbus Communications Ltd. proposed to start a hockey league in India. In this league, 8 city based teams were to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air and transparent manner (vi) to organise and conduct the sporting calendar in order to promote sports (vii) further to ensure that the national bodies have their best players available for national duty and that the national bodies were in a position to have players for a preparatory period for international events (viii) players were required to give precedence to national competitions over other events. 17. Regarding unsanctioned events, the bye laws state that they are not developed as an integrated and coordinated part of the sporting calendar and that they may cut across the sporting calendar. The unsanctioned events are stated to undermine the primacy of the national hockey sports body and are not in the interest of hockey as sports. It was stated that unsanctioned events can be damaging to sports and that as they fall outside the jurisdiction of FIH, the organisers were not accountable to the rules and regulations of sports. It has been stated in the byelaws that public cannot distinguish between sanctioned and unsanctioned events and that if any problem occurs, public confidence in sports would suffer and the integrity of the sports would be undermined. 18. The bye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts had to take permission of the Continental Federation or the national association of the country where the person resides. It has been stated in the byelaws that they are to be followed by all the national associations or they can be penalised. 21. The informants have submitted a copy of the letter of FIH dated 1st June, 2011. In the said letter it is stated that FIH and Hockey India are in the process of organising a professional hockey league in India in 2013. It has also been stated in the said letter that a World Series Hockey was being organised by a private promoter namely Nimbus Sports in collaboration with the Indian Hockey Federation which was not a member of recognised by FIH. It was also stated that World Series Hockey did not have the support of FIH or Hockey India and therefore it was an unsanctioned event. It was stated that if a participant participated in an unsanctioned event then he cannot participate in a sanctioned event. It was also stated in the said letter that any official who participated in World Series Hockey would be excluded by his/her national federation from participation in sanctioned events for a period up to 12 months or more. FIH further sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no mention of unsanctioned events in the byelaws of FIH. It is therefore clear that in February 2011 FIH had decided not to approve the World Series Hockey though the byelaws were framed subsequently. Information providers also submitted a copy of FIH statutes. 24. In the backdrop of the material submitted, the information providers stated that Hockey India and FIH wanted to suppress competition for other organisers of hockey in India including WSH and that they were using their monopoly of conducting international events in India to ensure that hockey players were forced to participate in the league that it planned to conduct in 2013. The complaint was submitted before the start of the WSH hockey league. The information providers have stated that the behaviour of Hockey India was anticompetitive and that Hockey India had entered into anticompetitive agreements with hockey players and abused its position of strength in a monopoly market to foreclose the market for conducting domestic events in India. 25. It has been stated that the relevant market for hockey in India was the market for conducting in governing international hockey activities for both men and women ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave no opportunity to show his skills for profit. It was again stated that the players who constituted consumers do not consider domestic activities in sports as interchangeable and substitutable international sport activities. As far as the geographical market was concerned it was argued that it was a pan India market. 27. It was argued that in the market for conducting of hockey activities the players were consumers. Hockey activities also decide the remuneration of the players as well as the expenditure involved on the training and equipments for the training of players. It was stated that different countries would constitute different relevant geographic markets. Further it was argued that the competitions for supply and demand of conducting all activities in India are homogeneous in the whole of India. 28. The information providers then took into account the Code of Conduct agreements entered into by Hockey India with the players. It was argued that the agreements entered into by the players and Hockey India were vertical agreements which led to an exclusive supply agreement and therefore it falls under Section 3(4) of the Competition Act. It was stated that the Code of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge a particular event (ii) the maintenance and promotion of health (iii) safety and welfare of players (iv) prevention of calendar clashes with existing events and (v) a meaningful role in the in the promotion and development of the sport. It was thus stated that the COC agreement was an exclusive supply agreement for playing hockey by both men and women in India. 30. It has also been mentioned in the complaint that each COC agreement causes AAEC in India in violation of section 3(4) of the Competition Act. To strengthen the arguments the informants have led stress on the conditions laid down in section 19(3) of the Competition Act. It was stated that an exclusive supply agreement which restricts the choices for the end consumers contravene Section 3(4) of the Competition Act. 31. It was stated that according to the COC agreement entry barrier is created for new players into the relevant market for conducting hockey events. According to the COC agreement each time a player wishes to participate in a foreign team or a club he has to take NOC from HI. This results in the following three barriers to entry namely (i) it has the effect of imposing a blanket prohibition on players ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as a result of the restrictions imposed under the COC agreement if a hockey player played in unsanctioned events he was likely to suffer severe disciplinary actions including being barred from representing the Indian team in any international event. It was stated that in economic terms imposing restrictions on players would cause severe adverse affects in the market for providing hockey playing services. By the COC agreement HI had denied the following benefits for players (i) important source of remuneration (ii) important source of additional support for players (iii) important source of practice and training and (iv) development of infrastructure such as stadiums etc. Thus the COC agreement would adversely affect the players who play hockey in India. 34. It has also been stated in the information that HI was a dominant player in the market for conducting and governing international hockey activities for men and women in India. It was stated that the monopoly power was obtained due to its regulatory powers especially as HI was the national association for running hockey in India. It was also stated that HI was affiliated to FIH and became the sole body for the conduct and go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining permission to play hockey events, a hockey player would have no opportunity to exercise his skills for profit as well as pride. In this connection reliance was placed on the decision in the Snooker Case (supra). 37. It was then argued that HI was abusing its dominant position in the market of regulating international hockey activities for men and women in India and that this abuse was hit by the provisions of Section 4(2)(e) of the Competition Act. Section 4(2)(e) is applicable only if an enterprise is dominant in one market and tries to enter into, or protect, other relevant markets. It was argued that international hockey activities in India were separate from the market for conducting and governing domestic hockey activities in India. It was argued that if the power conferred upon HI was used to promote its own hockey event, it amounts to an abuse of dominance as under Section 4(2)(e) of the Competition Act. It was stated that the HI had abused its dominant position in the relevant market of regulating international hockey in order to conduct and govern domestic hockey activities. The power to take action against players participating in unsanctioned event along with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in 2013. It was stated that by sanctioning tournaments in order to protect its rights, HI made it virtually impossible for competing tournament organisers to stage an event. Such action by HI also denied many hockey players to participate and show their skills. They acted as a barrier for the entry of many players in the field of hockey. The informants have stated that this had foreclosed the market for the conduct of domestic hockey tournaments in India. In this manner market access was not allowed to (i) Indian hockey players for not competing in other tournaments (ii) for other tournament organisers for conducting world class hockey tournaments and (iii) to sponsors and broadcasting from other platforms on which they could advertise their products. This in effect constituted a denial of market access under Section 4(2)(e) of the Act. 39. To support these arguments the informants have relied on the case involving Federation International de 1' Automobile (FIA) which was the regulator for motor racing the world over. FIA was also engaged in commercial promotion activities of motor racing. This case came up before the European Commission and the Commission held that FIA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y players to don the national colours in the international arena. But by introducing the concept of sanctioned/unsanctioned events, HI had barred players from participating in such tournaments. 41. The information providers have stated that with the economic development in India, sports industry was growing fast and having larger exposure to broadcast media, television and internet. Hockey is the national sports of India but there has not been much investment in hockey especially in training, infrastructure and equipments. It was stated that HI would be causing a loss to the promotion and development of sports in the country. If such anticompetitive practices were to be allowed, no event organiser not affiliated with HI or FIH would be able to conduct hockey activities. 42. It was further stated in the information that the revenue generated from broadcasting and sponsorship can be significant and is vital for the sports and players. Sponsors/broadcasters were interested in wider public viewership. It was stated that by restricting the market, the sponsorship and broadcasting would suffer and less money would be ploughed in hockey. Such restrictions not only cause loss to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;governing and conducting international hockey events in India' in contravention of Section 4(1) read with Section 4(2)(c) and (e) of the competition Act, by engaging in conduct which includes: a. Warning hockey players with non-selection into the Indian national team if they participate in the WSH and/or if they sign the Players Contract; b. Warning hockey players with disciplinary action if they participate in the WSH and/or if they sign the Players Contract; (iv) Direct HI and FIH acting through HI to public a scheduled calendar of international events including training in preparatory camps thereof, one year in advance and having published the same, direct that they do not amend it without giving at least a minimum of 180 days notice that is duly published. (v) Impose the highest penalty on HI for contravening Sections 3 and 4 of the Competition Act; and (vi) Any other order that the CCI deems fit. 44. The Commission took up the issue and came to the conclusion that there existed a prima facie case. The Commission therefore by its order dated 9.2.2012 directed the Director General (DG) to investigate the case. 45. Regarding interim orders under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e performing public functions for public good so that hockey as sports could flourish all over the world. FIH was stated to be not a commercial body and its activities were not economic. For this proposition reliance was placed on the decision of the Supreme Court in the case of Cricket Association of Bengal 2 SCC 161. 50. The representative of FIH also argued that as the Indian Competition Law was based on European Competition Law and therefore the guidelines laid down by the European Commission would apply. In this connection, reliance was placed on 2007 White Paper of EC on sport. In this white paper, the European Commission had accepted that sports organizations were arranged in the form of a pyramid and that it was a monopoly because for one game there can be only one regulatory body. Further the sports body required freedom of internal organization. As a consequence the sports bodies were entitled to issue regulations which may have significant restrictions on economic freedom. Such regulations could be integrity requirements, restriction on clubs to buy players and broadcasting rights. To support these arguments, reliance was placed on European case laws. It was stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess to their players and complete freedom for national representative competition. 54. Speaking again of the pyramid structure it was stated that such a structure was necessary for the uniform application of rules and comparable playing conditions. It was stated that having a system of sanctioned and non sanctioned events was necessary for the objectives of the game. It was stated that the concept of sanctioned/unsanctioned event arose from the concept of pyramid structure. It was stated that a governing body would be simply unable to exercise authority and oversight over those events which were essential for the proper running of sports. It was stated that a regulator has to protect the integrity of sports which it regulates. To illustrate the point further it was stated that anti-dope code had to be enforced which a private operator would not do. 55. It was stated that in many countries including India national sports associations do not have the exclusive right to organize events in sports. The national associations thus do not have a right to protect the integrity of sports. It was therefore considered necessary by FIH to have a system of sanctioned and unsanctioned event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er freedom to play in unsanctioned events. It was stated that it was necessary to protect an investment in the training of players, to protect the commercial terms which financed that investment and to ensure that those revenues were distributed in a manner that benefited not only professional players but sports as a whole. Reliance was also placed on another decision rendered by the High Court in England, the case Hall vs. English Cricket Board. It was stated that in this case the High Court held that for a country player playing for Indian Cricket League in India was detrimental to the integrity of the game of cricket. Incidentally the Indian Cricket League was organised by a private body. Reliance was also placed in the case of Asian Tower, Pilkadaris vs. Asian Tour [2010] SGHC 294 (choo han teckj) where also the issue of unsanctioned tournaments came up. In this case some golfers had played in an unsanctioned tournament for which the Golfers' Association fined them $5000 before they were allowed to play in a sanctioned event. The players challenged issue in the Singapore High Court but the Singapore High Court confirmed the fines levied on the golfers. 59. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regulatory requirements for playing in the league. FIH also stated that Hockey India was taking permission for organizing various events in India. 62. The DG also examined Indian Hockey Federation (IHF). It was stated on behalf of IHF that it was original national association which was running hockey in India and that various associations and institutions were affiliated with it. It was stated that in 2008 FIH disaffiliated IHF though IHF was still recognised by IOA. It was stated that the domestic tournaments were sanctioned by IHF whereas the international tournaments were sanctioned by HI and FIH. It was also stated that IHF does not have a Code of Conduct for its players. The tournaments run by IHF requires no permission as IHF organized and sanctioned only domestic tournaments. It was also stated that the WSH league was not sanctioned by FIH, and that the tournament was not an international one but was domestic one in which some international players participated. It was stated that no sanction from FIH was necessary for the conduct of WSH because the running of WSH was a domestic tournament which led to better exposure for the Indian players. 63. The DG also sent a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Thus the economic activities carried out by HI and FIH bring it within the ambit of the definition of enterprise as defined in the Act. To further support his findings the DG relied on the decision of the Delhi High Court in the case of Hemant Sharma Ors. vs. Union of India Ors. Therefore the DG held that both HI and FIH were enterprises. As far as FIH is concerned it was a society registered outside India but it was a person under the Competition Act and the DG held that in view of the provisions of Section 32 of the Competition Act. The Commission had the authority under the Act to examine the conduct of FIH, if it had an effect in India. Therefore the DG was of the view that it could be examined whether the acts of FIH were anti-competitive within the provisions of the Competition Act 2002. 67. The DG then took into account as to what would be the relevant market. In his view the market for conducting international hockey activities for men and women in India was different from the market for conducting domestic hockey. After considering all the aspects of the case, the DG came to the conclusion that the relevant market in this case would be the market for cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure of sports and because FIH had granted recognition to HI. Thus HI was in a position to make itself a dominant player in the field of hockey mainly because of the pyramidical structure. 71. The DG then took up the role of FIH. According to the materials available with the DG, FIH was a non-profit association in Switzerland and its main aim was to encourage, promote and develop and control hockey at all levels throughout the world. In accordance with Olympic Charter, as national governments did not have any role to play in the regulatory process in sports, FIH had a total monopoly over the field of hockey. It framed the rules and regulations of the game and enforced them through the national associations who were members of FIH. Though the rules were framed by FIH for the sports of hockey, it was the sole and exclusive national association which controlled hockey in India. The rights relating to media, television etc. vest with the national associations. The DG held that the rules in respect of sanctioned/unsanctioned events had led to a situation where no event in hockey can be organised by any other enterprise. No player or technical staff could play in unsanctioned event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of India should recognise Hockey India and allow it exclusive authority to govern men's and women's hockey in India in respect of both national and international competitions. FIH also dictated to the Indian Government that it should not fund or support any hockey event which was not sanctioned by FIH or Hockey India. It also wanted the Government for the withdrawal of all the lawsuits and ensure HI was the only national body to run hockey in India. 74. Though in July 2011 the Secretary General of Hockey India had no difficulty in allowing staging of the WSH hockey tournament, Hockey India subsequently warned the Indian players that they should not participate in the tournament run by WSH. Some of the leading players of Indian hockey were not selected for the Olympic trials because they had entered into agreements with WSH. WSH postponed the running of the league from 17.12.2011 to 29.02.2012. The matter went to the Delhi High Court and the Delhi High Court directed that the WSH series should be held. On 04.05.2012 FIH issued a warning to the 13 different national associations stating that if their players participated in the WSH tournament they would forfeit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prived of regular competitive hockey tournaments. Therefore in the opinion of the DG, FIH and Hockey India restricted the development of hockey by not allowing a league like WSH. He found that efforts were made by FIH and Hockey India to stall the league. This was done by not allowing the players to participate in the WSH league. The DG also found that in other sports like football or cricket players from different countries participate in the domestic leagues organised at national level but in the case of WSH league, FIH did not permit such a procedure. 77. The Code of Conduct (COC) was issued in September 2011. It is the view of the DG that the concept of sanctioned and unsanctioned event was made with the primary aim to prevent IHF from organising a domestic hockey league in India. According to the DG the action of FIH and Hockey India resulted in preventing national hockey players from playing WSH series. In his view if a player played in WSH league he forfeited the right to play for his country and he could also be banned from international hockey for 12 months. This according to the DG was an anticompetitive action by HI FIH. In fact many players who played in the league ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ching or management staff, and other individuals under its jurisdiction who fails to comply with the prohibition, (iv) Recognized and give effect within its own jurisdiction to any restriction, exclusion or ineligibility imposed on an organization or individual by another national association for failure to comply with that prohibition, and (v) Make it a condition of eligibility to participate in events played under its jurisdiction that the organization or individual in question has not participate in any unsanctioned events in the previous 12 months. According to this regulation, the national associations were barred from permitting their players from participation in any unsanctioned event on the threat of banning the players from international competitions. In view of the regulation, the Pakistan Hockey Federation issued show cause notices to 8 players who had participated in World Series hockey. Further according to the COC entered into by HI with the players and officials they were required to obtain a no objection certificate from Hockey India before playing for any foreign team or a club. For issue of the no objection certificate from Hockey India no timeframe had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on a decision of the European Competition Commission. In this case the issue was of FIA Formula One World Championship. In the Commission press release IP/99/434 dated 30.06.1999 it was stated the Commission had ordered that there should be a complete separation of commercial and regulatory functions in relation to FIA Formula One World championship. Incidentally in this case also FIH and Hockey India being the regulators had a conflict of interest because they proposed to have their own league by banning other leagues. The DG also relied on the Snooker case (supra) and he has also reproduced an extract of the report from the order of Australian Commission in the Ice Hockey case (supra). The DG therefore concluded that it amounted to a denial of market access to other enterprises and this was therefore a violation of Section 4(2)(c) of the Competition Act. 82. The DG was a view that the decision of Hockey India not to sanction an event was not in the interest of sport but was mainly to protect its own event and its commercial viability. To sum up the DG was of the view that Hockey India had contravened Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act. 83. The DG then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e executive body comprises of the representatives of various national associations. Thus the FIH is basically the Association of different national associations/federations who are engaged in the activity of governing and controlling the sports of Hockey in their respective country. 85. The DG also examined the Olympic Charter and found that the Olympic Charter did not suggest that the control of the domestic league should be with the national association. According to the DG, FIH had assumed the role of a single body controlling all the aspects of governing hockey such as control over domestic and international hockey. 86. The DG then examined the applicability of section 3(3) of the Act. FIH is an Association having 127 members who represent the different national associations of different countries governing hockey. The executive body of FIH was elected from its members. According to the DG the regulations and the decisions of FIH governing its members has to be treated as horizontal agreement under section 3(3) of the Act. The decision taken by FIH on 11.03.2011 were made binding on all the national associations. The DG was of the view that the issue of the byelaws that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Olympic body (IOC). It was argued that FIH was recognised as the international body governing hockey world over and is recognised by the IOC under the pyramidical structure which exists in all sports. It was stated HI works within the regulations framed by FIH and that it was the only association which was recognised for hockey in India. Its main function was selecting teams for international events and selection of teams cannot fall within the ambit of competition law. It was argued that HI was not an enterprise under section 2(h) of the Competition Act and sports is not a service under Section 2(u) of the Act. It was also stated Delhi High Court's order in the case Chess Federation does not lay down a precedence. It was also stated that in view of Supreme Court's decision in the case of Bangalore Sewage Board sports cannot be regarded as an industry. It was argued that Section 3 of the Competition Act had no application because HI had not entered into an agreement with anyone. It was further argued that WSH was a commercial venture for the benefit of a private body and that the informants in this case were put up at the behest of Nimbus Communications and were the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regulation would fall foul of the competition law if it was for illegitimate purposes or were not proportionate to the pursuit of the objectives. To support this proposition reliance was placed on the decision of the European Court of Justice in the Mecca Medina case (supra). It was stated that the European Court had accepted that restrictions on athletes were necessary in the regulations for sporting events. It was stated agreements and decisions taken which restrict freedom has to be seen with reference to law laid down in the Act. 91. It was argued that it was due to the pyramid regulatory structure that rules of the game were applied to whenever and wherever it is played. This was stated to be in the interest of sports lovers and sportsmen as it leads to proper regulation of sports. These rules also lead to proper organisation and prioritisation of international competition. This objective was stated to be legitimate as competition between nations is an essential feature of each sport. The regulations also protect the integrity of the game and maintain public confidence in sports. Regulations help in the maintenance of uniform rules. It was stated that pyramid structure h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayers owe something to sports in turn. It was stated that no player/athlete could participate in sanctioned tournaments if he had played in unsanctioned events. It was also stated that no competition regulator had held the regulations framed by FIH to be anticompetitive. It was also argued that IHF had exactly the same rules in its agreements with the players. In the said agreements IHF had contended that during the course of the agreement, the players would not participate in any tournament not organised by IHF. 95. Regarding the findings of the D.G. that FIH had assumed the rule of single body to all the spheres of governance of sports of hockey, it was argued on behalf of FIH that different facts and levels of sport are inextricably linked and interdependent. It was stated that the different aspects cannot be compartelised and the development of the sports has to start from the grassroot level. Further uniformity in the rules and regulations have to be maintained at all levels and therefore FIH has to do what it has done. 96. Regarding the findings of the D.G. that there was no need to restrict the players from participation in the WSH league when it did clash with the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanctity of the game of hockey. It was further stated that the regulations did not have retrospective applications and they were to apply to events happening after 31st March 2011. It was conceded that the regulations applied to both sanctioned and unsanctioned events as far as the restrictions were concerned. It was also argued that events were organised in one country with the sanction of the said national association. It was stated that FIH wanted the organisers to work with HI and not any other association primarily because HI was the national association which was recognised by FIH. 101. It was also argued that the DG had erred in holding that the regulations were issued without going through Article 18 of the FIH statutes which required that the statutes can be amended by the Congress by a resolution of the Congress passed by a simple majority. It was stated that the regulations issued on 11.03.2011 were not part of the regulations but were byelaws. It was stated that the FIH Executive Board was competent to issue such byelaws in accordance with Article 9.3(b) of the statutes. 102. Regarding the findings of the DG that FIH had rejected the settlement between IHF and HI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst him under any other regulations that it did have in effect at the time). It was stated that if a player participated in WSH league he was ineligible to represent his country in international events but was eligible to play in domestic events. It was argued that no action was taken against any player who participated in WSH and but had signed the contract with WSH prior to 31.03.2011. 104. It was also argued that the DG had erred in his analysis by not considering the provisions of Section 19(3) of the Competition Act. It was further stated that by the issue of the byelaws some freedom of the hockey players was curbed, there was nothing to hold that the byelaws were anticompetitive. 105. It was also argued that FIH had jurisdiction over national tournaments and a person aggrieved against the decision of FIH can go in appeal to the Judicial Committee and ultimately to an arbitrator at Lausanne. It was further stated that private investments in sports was not banned and that byelaws promote competition in sports. It was also stated that FIH being a regulator also needs money for the development of sports. It was thus stated as FIH was not an enterprise under the Competi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of the relevant market by the DG it was stated that the commercial activities involved in this sport of hockey had been appreciated by the DG and that it forms an indispensable part of any sporting activity including but not limited to hockey. 108. Regarding the application of Section 3(4) of the Act it was held by the DG that as no commercial relationship existed between HI and the players, Section 3(4) was not applicable to the facts of the case. The information providers did not agree with these finding of the DG and it was stated by them that the terms of COC agreement were in contravention of the provisions of Section 3(4) of the Act. It was stated that HI was an enterprise and in such a position anti-competitive exclusive supply agreement was thrust upon the hockey players as understood in Section 3(4) of the Act. It was stated that such an agreement between two unequal hockey parties results in AAEC in the market while conducting the hockey activities in India. It was also stated that the provisions mentioned in Section 19(3) of the Act were applicable in this case. 109. Regarding the fact that HI was an enterprise, it was stated that HI qualified as a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of players to participate as multiple levels of permissions were required even for the domestic tournament. It was further stated that this COC agreements drive existing competitors out of the market. It was again stated that the hockey league organised by FIH and HI proposed to wipe out the existing competition. It was stated that HI had not provided any valid reason for not sanctioning the league of WSH in India. It was also argued that the whole system of sanctioned tournaments was made in order to target WSH. 111. The information providers then argued regarding the structure under the Olympic Charter. It was stated that both HI and FIH had gone beyond all rationality and proportionality and had lost sight of the cornerstone of the Olympic Charter which is: The practice of sport is a human right. Every individual must have the possibility of practicing sport, without discrimination of any kind an in the Olympic spirit, which requires mutual understanding with the a spirit of friendship, solidarity and fair play. In addition to its three main constituents, the Olympic Movement also encompasses the Organizing Committees of the Olympic Games ( OCOGs ), the national as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions reliance was placed on the decision of the Australian Commission the case of Ice Hockey (supra). 113. Regarding the finding of the DG that FIH and HI had entered into an agreement in violation of Section 3(3)(b) of the Act, it was stated that the findings of the DG were correct. Similarly restriction imposed on the technical staff by FIH was also stated to be anti-competitive. It was stated that the draconian rules and regulations framed by FIH interfered with the right of players to carry on their profession and trade. It was stated that the hockey players offer their skills in the field of hockey whereas FIH and HI only provided the right infrastructure and facilities. It was argued that it was the duty of the organisers to support the hockey players. It was therefore stated that the aim of the regulators cannot be creation of hurdles and restrictions in the development of the sports of hockey in the name of the preservation of the Olympic Charter. Regarding the regulation and the rules of play as well as anti-doping, it was stated that WSH league organisers followed the rules laid by FIH and were also had anti-doping controls as mandated. It was therefore stated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to obtain dominance in the field of domestic hockey activities in India and for this reason the provisions of Section 4(2)(e) were applicable. This was done in order to ensure that the league promoted by FIH and HI was successful from the commercial angle. It was argued that HI was using its powers with the object of promoting its league in collaboration with FIH. It was therefore stated that the action of HI was totally abusive. 115. It was therefore requested that the COC agreement be directed to be modified and that HI should discontinue the practice of abusing its dominant position. It was also stated that hockey players should not be warned with disciplinary action if they participated in a non-sanctioned tournament. It was therefore argued that HI should be penalised for contravening the provisions of Section 3 and 4 of the Competition Act. 116. No analysis in this case would be possible without considering the duties and functions of FIH in the field of hockey. According to the FIH statutes, the object of FIH was to encourage, promote, develop and control hockey at all levels throughout the world. The statute also gave power to the FIH in all matters concerning hoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers by a sports governing body. Procedure has been laid down in the byelaws for the issue of a no objection certificate. If the national association has taken a stand on some issue then FIH could overrule the national association. The byelaws also prescribe that the national associations should not participate in any unsanctioned event and it should also prohibit participation by organisations athletes, technical officials, umpires, coaching staff etc. in such events. The national association was also required to take the disciplinary action against any organisation, athlete, technical official, umpire, or other individual under its jurisdiction who did not comply with the prohibition laid down under the byelaws. A person who played in an unsanctioned tournament was directed not to be selected for the National representative team. If the national association did not comply with the regulations then the national association could be reprimanded, fined, suspended or expelled by FIH. 117. A perusal of the statutes and bylaws shows that FIH had taken the control of hockey at all levels in each country from grassroot to international hockey. A player or an organisation which does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he implementation of Olympic Solidarity program. There is also a concept of National Olympic Committees who could recognise only one national federation for each sport in their jurisdiction. Thus the Olympic Charter has laid down the guideline as to how the sports entities should run sports all over the world and how the interests of the athletes were to be protected. 119. It is also necessary to examine hockey as a game before proceeding with the competition analysis. Hockey has been played in different countries for centuries but modern hockey started in the U.K. in the 19th century and the first rules were framed in 1874. The British Army popularised the sport in the British Empire and an organisation known as International Rules Board was formed in 1895. Hockey became an Olympic sport in 1908 but it became a permanent Olympic fixture in 1928. Though FIH was formed in 1924 in Paris but men's hockey united in 1970 after the International Rules Board became a part of FIH. Women's hockey also started in England in the late 19th century and was run by various associations. These associations merged together in FIH only in 1982 but women's hockey became an Olympic Spor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had seen to it that ICL as a league flopped so that its league IPL was a success. 123. In the sport of hockey, Nimbus another T.V. broadcaster with the blessings of IHF which is also a national association of hockey in India but not recognised by FIH thought of starting a league known as WSH. The announcement was made in December 2010. Nimbus signed 160 players for its league but found that many of the international hockey players would not come if FIH did not approve of their participation through their national association. But when Nimbus approached FIH, it asked Nimbus that it should have gone through the process through HI and not IHF. FIH refused to approve of the WSH tournament and came out the byelaws dated 11.03.2011. Nimbus is of the view that FIH did not approve of WSH because FIH and HI wanted to start their own tournament with HI in January 2013. There is no conclusive element to come to this conclusion but there is a possibility of the allegations made by Nimbus. But as FIH and Nimbus were going to earn their revenues from India, it was necessary for FIH to remove the competitor from the scene. 124. This could be done only by having a system of sanctioned and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diate consumers, the regulators and the organisers are necessary for running a league. The other persons involved are the radio/TV broadcasters, sponsors, advertisers etc. without whom the league cannot be successful. 128. For the ultimate consumers, it is entertainment which is necessary and the entertainment increases when famous national and international stars perform. If such stars play in the hockey league, the gate money can increase. If more matches are held, then due to availability of matches, there is an enhancement of their satisfaction level. 129. The intermediate consumers are the athletes and players. Without them no tournament or league can be held. They have a very short life in sports where they can show their skills. In majority of sports, playing the game and earning money has become their profession. The more they play in their short professional life increases their earning and increases their welfare. This is one of the aims of the Olympic Charter. Further freedom to carry out their profession is a freedom guaranteed under Article 19(1)(g) of the Constitution of India. The level of the satisfaction of the players increase when they play for their countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the development of the game. The players say that they have not got proper remuneration and there is no evidence that any amount was spent by FIH, IHF or HI in the development of the game. In fact, Govt. of India is funding the development of hockey. 134. There is nothing wrong in having a system of sanctioned/unsanctioned events. But what has to be seen whether it causes any economic harm to the others in the game of hockey. There is no doubt that the hockey calendar as proposed by FIH was required to be followed. Primacy has to be allowed to international events and the athletes should be mandated to play for the national team and not for private tournaments. But for following the hockey calendar, it is not necessary to have a system of sanctioned/unsanctioned events which denies market access to others. 135. In the background of these facts, a proper analysis has to be carried out. Hockey provides entertainment to the persons who watch the sports. It is thus a service by the regulators, organisers and the players to the person who had to be entered. Thus, it is a service under the provisions of Section 2(u) of the Act. 136. The next question is whether FIH and HI are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to take action against an enterprise located outside India. Thus the arguments of FIH on this issue is without any basis. 138. No analysis would be complete without reference to Section 18 of the Act which read as follows- 18. Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country. Thus, it is the duty of the Commission to eliminate practices which have adverse effect on competition (the expression used is not appreciable adverse effect on competition) and to promote and sustain competition. Thus it is the duty of the Commission not only to eliminate anticompetitive practices but by its action to promote and sustain competition. In this particular case or any other case, the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market of hockey. 141. In view of Section 18 of the Act it has to be seen whether the agreements entered into by HI with the players as code of conduct amounted to a violation of Section 3 or Section 4 of the Act. The DG has held that it amounts to a denial of market access under Section 4(2)(c) of the Act as it results in the denial of the market access. There is no doubt that the Code of Conduct (COC) agreements entered into by HI and the players were agreements. There is also no doubt that these agreements the players had to sign or they would have been barred from playing hockey. It has been held that the COC agreements cause appreciable adverse effect on competition in India. Even the factors mentioned in Section 19(3) are applicable as discussed above. The market in this case is that of hockey services and in this market, the regulator HI and the players both operate. Section 3(4) would not be applicable because under Section 3(4), the parties to an agreement should operate in different markets. As the players and HI operate in the market in the same market, the provisions of Section 3(1) would be applicable to this case. It has already been held that the agreements cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abroad. There is no other player in this market. As a consequence HI was able to act independently of the market forces and affect the consumers in its favour. Thus HI was able to enforce the code of conduct for the players. It made HI dominant in the field of international hockey market in India. The dominance is also established by considering the factors (f) and (g) of Section 19(4) of the Act. 145. The opposite parties have taken the plea that the Olympic Charter and the sanctity of sports of hockey required the opposite parties to frame a system of sanctioned/unsanctioned events. But this is only an explanation for acquiring monopoly and achieve total control of the sports of hockey. There is nothing in the Olympic Charter which supports this view. In fact the Olympic Charter specifically mentions that welfare of the athletes have to be enhanced. In this case on the contrary by having guidelines and issues of the code of conduct there is an infringement of freedom to carry out trade and unfair conditions have been created in which there is infringement of the freedom of trade and denial of access of the market. Therefore the DG's action in holding that FIH and HI had c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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