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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 ..... tive conditions by HI, on players for participation in un-sanctioned prospective private professional leagues resulting in undue 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 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he restrictive conditions included thereunder, constitute a violation of Section 3(4) of the Act. 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... domestic events cannot shift to international events in the absence of such recognition. 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 im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Public Register No. C2009/1391, Australian Competition and Consumer 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commission was of the opinion that there 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 see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of delineation of relevant market, DG agreed with the informants 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 pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of proof of market power does not justify" anti-competitive 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... players to play WSH series by issuing a warning letter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... went to London to play four nation test matches and 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-à-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 consen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayers nullified the application of Sec 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3(3)(b) of the Act. Its conduct ultimately 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 associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re acting as a custodian 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to broadcast 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegrity; 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 concerned with generating retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature, 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 inaugural edition of WSH with impunity. Furtherm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, 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 participation of more than one National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 against players who participated in WSH. All players that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation 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 likelihood that preferences and priorities in practice may be different from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t (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 players by the Federations/Clubs, discrimination and foreclosure of entry of the rival leagues, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low. 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 consider and evaluate the efficiency arguments behind the allegedly restrictive anti-competitive regulations/practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 motorcycling events without seeking to make a profit, associations which are engaged in that activity and do seek to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 'organization' brings in activities contributing to the revenues of sports federations such as grant of me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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 Continental Federation; while b. if the event is open to teams and/or Athletes in membership of or affiliat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant 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 market for services of Hockey players where Hockey India is the consumer and Hockey players, the service providers. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 domestic event and international events contained in Bye laws of FIH and HI. 9.8.16. On the issue of relevant geographic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 activities in India. 9.9.1. At the time of submission of the case, HI was not a part of the relevant market. WSH was the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dominance can be made in terms of weight of the parties and the countervailing power asserted on each other. Interestingly, the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conditions on hockey players in India. Note was also taken of MoYAS statement as per which, none of those players, who participated in the WSH series were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Asso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto 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 allegation against HI/FIH for causing denial of market access under Section 4(2)(c), to WSH is not substantiated, considering the provisions of Bye laws as well as the manner of application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 events involving foreign teams/clubs has to be in the opinion of the Commission examined in the given perspective. The Commission noted- a. The CoC mandates non-participation in unsanctioned events ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 conditions included in CoC agreement are applied becomes critical in this context. The Commission observes that the lack of parameters that define and demarcate the scope afforded by the term 'organization of events' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 registered under Societies Registration Act with headquarters at Delhi. It is responsible for conducting, governing international hockey in which the Indian team participates all over the world and India. Hockey India is affiliated to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 participate and that the players who participated in the league were entitled to fees. The reason for Nimbus Communications Ltd. to take the permission and partner with IHF was the fact that IHF was regarded as the national federation repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition 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 byelaws state that a national association cannot participate in any unsanctioned event. Further the athletes, individuals and other organisations under the jurisdiction of national association are prohibited from participating in unsanctioned events. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 stated that such officials cannot participate in future FIH events for at least a similar period. This letter was addressed to umpires managers and technical officials in the sport of hockey. On this 17th October, 2011 Hockey India issued a press release stati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H 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 in India". It was argued that this service provided in the market could not be regarded as substitutable or interchangeable with any other service either from the demand or the supply side. It was stated that the relevant market had to be decided on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned 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 Conduct was an agreement which prevented a player from participating in unsanctioned events. If this Code of Conduct was read with the intention of starting a rival hockey tournament by that FIH it was clear that the Code of Conduct agreements were an anticompetitive as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement 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 from participating in any event which has been not sanctioned by HI. (ii) staging the tournament becomes commercially unviable because it becomes difficult for an adequate number of players to participate. (iii) as fewer top-class players are able to participate in the tourname ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 governance of all hockey activities in India. This affiliation to FIH also conferred upon HI certain regulatory powers which enabled it to influence hockey players in its favour. As no hockey player could play in an unsanctioned event which are not approved by HI, it enabled HI to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 the power to participate in international events allowed HI to have a monopolistic position in the domestic events of hockey in India. It was argued that the sequence of events shows that HI acting under the umbrella of the FIH had abused its power in the relevant market in the domestic hock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 had used its regulatory powers to force a competing series out of the market. In this particular case, the European Commission ordered a complete separation of the commercial and regulatory functions in relation to the FIA formula One World Championship and FIA World Rally Championship. Relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 players but it also restricts choices for broadcasters and sponsors. It was therefore stated that by restricting the market and denying market access, HI had abused its dominant position under Section 4(2)(c) of the Companies Act. 43. The information providers thus asked for investigation to be car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 33 of the Competition Act, the Commission gave a hearing to the information providers and HI but did not grant any interim relief. In the said proceedings the representative of HI stated that HI was acting at the behest of FIH. 46. The D.G. took up the investigation in this case by issuing letters and summons to FIH, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that regulations can be made for the proper conduct and organization of sports even if they were anticompetitive. But it was conceded that if the regulations were for ulterior purposes such as stifling competition for official events or for restriction on players freedom, then there are competition concerns. But it was stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 events. This in turn means that FIH was trying to discipline sports run by private operators by having a system of sanction of the game to be played. By allowing players to play in only sanctioned events with the added threat of banning them from donning national colours, FIH wanted to see that the private organizers exit the sphere of hockey. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced 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 argued that some restriction on the players was actually necessary for running sports. The structure was also necessary to protect the sanctity of the game. It was also stated that national associations were required to give precedence to international competition compared to other events and that there was no distinction between national associa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions 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 questionnaire to Ministry of Youth Affairs & Sports. The Ministry informed the DG about the various litigation proceedings pending between HI and FIH. The Ministry was not aware of the regulation issued by FIH in respect of sanctioned and unsanctioned events. The Ministry also informed the DG that no player who participated in World Series hockey was select ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conducting governing and domestic hockey activities for both men and women in India and that this would be the relevant product market. In the analysis as far as the geographic market was concerned the DG took India as the pan Indian market. This view was the same as propounded by the Information Providers. 68. The DG then took up the assessment in respect of dominant posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 events and if they wanted to represent their country. Thus the monopoly enjoyed by FIH had been transferred to HI and HI operated independently of any competitive force in the relevant market and all the stakeholders in the relevant market were fully dependent on HI. 72. The DG then took up the examination of the abuse of dominance by the OP under the provision of Section 4 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 their eligibility to participate in international events. 75. The DG then started the analysis of the abuse of dominance. The information providers have stated that Hockey India being the national association had the exclusive mandate to select the team for international hockey. It was stated that HI had regulatory powers and was recognised as a national association by FIH, Asian Hocke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icket 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 were not selected for representing India at the international level. The DG then relied on a statement of one of the informants who stated that both IHF and HI had done nothing for the development of hockey in India and that hockey players hardly earned any money from playing hockey in India. For this reason, WSH series was important for the hockey players. The DG also relied on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 been fixed in the COC. FIH argued that such a system of sanctioned/unsanctioned events and obtaining NOC existed in other sports like cricket, basketball, football and rugby. FIH was also concerned with the fact that if a private body organizes and enters the field of sports it would be concerned with generating revenues as quickly as possible rather than following the rules of the game and for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 examined the applicability of Section 3 of the Act especially with reference to the code of conduct agreements entered into by the players and Hockey India. According to DG the COC agreement operated as complete and unreasonable restriction on the ability of the hockey players to participate in tournaments. In the view of the DG this amounted to an exclusive supply agreement within the meaning of section 3(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 no sanctioned tournament whether domestic or international could be organized at any level by any enterprise who was not a member of FIH, the members of FIH had entered into an agreement. The rules laid down by FIH for the national associations have been reproduced by the DG in his report. (i) Not participate in anyway in any Unsanctioned Event; (ii) Prohibit the participation by organizations, Athletes, technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ams 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 alter ego of WSH. It was stated that the code of conduct entered into by HI and the players was not anticompetitive under the Competition Act as it had nothing to do with production, service, storage etc. as mentioned under the Competition Act. Further such code of conducts governed sports in the cases of cricket, basketball, soccer and rugby. Further it was the choice of players to play in sanctioned or unsanctioned events b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eements 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 helps in the organisation and conduct of the sporting calendar which was absolutely necessary for the development of the sport. FIH also recognised the right of each national federation to give primacy to the national and international events because the reputation of the country depends on it. 92. It was argued that the unsanctioned events threaten to undermine the fundamental sporting imperatives because they do not figure in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, 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 international team obligations, it was stated that DG could not arrive at a conclusion that there could not be a conflict. It was stated the organisers of WSH may agree at a particular time and there may not be a conflict but there was no guarantee that there would not be a clash in future. It was therefore considered necessary by FIH to have regulations and control in respect of sanctioned tournaments. 97. It was further argued that keeping a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 because it amounted to the joint administration of hockey in India by FIH and HI and this went against the Olympic Charter. It was therefore stated that this finding of the DG was erroneous. 103. Arguments were also raised against the findings of the DG that FIH and HI foreclosed the market for the IPs and other hockey players and also shut out the market for other organisers of hockey in India. It was stated that FIH had not prevented the hockey play ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Competition Act and as the Competition Act did not apply to it, the findings of the DG were erroneous and for this reason, the case should be closed. 106. On behalf of the information providers it was argued that the DG had correctly treated HI to be an enterprise within the meaning of the Competition Act. It was also argued that the DG had correctly treated HI to be in a dominant position and that it was abusing its dominance and under the provisions of Section 4(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation 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 under Section 2(l) of the Act and was also an enterprise for the purposes of Section 2(h) of the Act. It was stated that HI was engaged in the conduct of international hockey tournaments in India, facilitating sponsorship for the team, obtaining training facilities and equipment for players in collaboration with Sports Authority of India. Thus HI was engaged in the activity of providing hockey services for mens and womens hockey in India and that this service rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 associations, clubs and persons bellowing to the Ifs and NOCs, particularly the athletes, whose interest constitute a fundamental element of the Olympic Movement's actions, as well as the judges, referees, coaches and the other sports officials and technicians. It also includes other organisations and institutions as recognized by the IOC. To oppose any political or commercial abuse of sport and athletes; To encourage and support the efforts of sports organisations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the system of sanctioned/unsanctioned events created anticompetitive concerns and restricted the freedom of trade in the market. Further the decisions of boycotts or non-cooperation cannot be justified in the garb of maintaining the integrity of the sports of hockey. It was therefore for stated that the DG was correct in holding that FIH and HI had violated section 3(3)(b) of the Act. 114. The information providers agreed with the finding of the DG that Sections 4( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 hockey without the intervention of any outside authority. It was also stated that anti-doping regulations and procedures for the implementation had to be enforced by FIH and that the statutes were binding on the members. Subject to the byelaws the continental federations would be responsible for the administration, promotion and development of hockey for men and women as well as the organisation of tournaments, events and matches. The statute mentions that the congress of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not toe the line of FIH would not be allowed to participate in an international event. As far as an organiser whose event was an unsanctioned event, majority of the players would not be playing in such a league or tournament. Even if a national association wants to run its own tournament in violation of the FIH statutes and byelaws, it can be fined, suspended and expelled from the FIH. Thus the national association does not have proper powers even within its own jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Sport in 1980. 120. In the beginning hockey like other sports did not have much money. But with the advent of television, live coverage of hockey came to households and with the advance in communications the viewership of hockey went worldwide. Hockey therefore like other sports became a source of entertainment. This brought advertisers and money to hockey in the form advertisements, sponsorships, broadcasting rights through radio, T.V. and internet. Further with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 unsanctioned tournaments. Though the byelaws of such tournaments were issued on 11.03.2011, FIH had already decided on 08.02.2011 that WSH was going to be an unsanctioned tournament. There is no doubt that WSH had not applied to HI for the sanction of the tournament. But Nimbus had already entered into an agreement with IHF and agreed to pay nearly ₹ 30 crores to IHF. If Nimbus had walked out of the contract and joined with HI, IHF would have sued Nimbus for breach o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 country. In fact it is the aim of each player to play for their country. This gives them a sense of achievement and accomplishment. But a system of sanctioned/unsanctioned events as propounded by FIH effects the freedom to carry their profession. It has to be examined whether the restrictions placed on the players were reasonable or not because restrictions work as a dampener in regard to earnings of the athletes. 130. As far as the regulators like FIH and HI are concerned their role is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 enterprises within the meaning of Section 2(h) of the Act. There is no denying the fact that both FIH and HI which are the international and national authorities running the sport of hockey are societies registered under the Swiss and Indian laws respectively. They are also no profit organisations. The two entities are persons in accordance with the provisions of Section 2(l) of the Act. But to qualify as an enterprise under the provisions of Section 2(h) of the Act, a person should be engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Commission has got to identify the anticompetitive practices and then eliminate them. The Commission has not only to promote competition but also sustain it. The Commission also has to protect the interest of consumers and ensure freedom of trade carried out by the participants. 139. Freedom of trade is also a constitutional guarantee under the Indian Constitution. There can be restrictions on freedom of trade but such restrictions should be only for protecting the sovereignty of the State or if they are opposed to publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayers 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 appreciable adverse effect on competition in India. These agreements have an effect on the other participants in the market such as the spectators, organisers, broadcasters etc. As the COC agreements cause AAEC, they are void under the provisions of Section 3(2) of the Act. Thus, the code of conduct would not come in the way of the players in playing any type of tournament whether sanctioned or unsanctioned. 142. The DG has stated that the byelaws issued by FIH amounted to a violation of Section 3(3)(b) of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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 contravened the provisions of Section 4(2)(a)(i) and Section 4(2)(c) of the Act, as discussed in Para 68 above is in order. Similarly, the action FIH and HI as discussed in Para 69 also establishes contravention under Section 4(2)(c) of the Act. Similarly the DG has found contravention under Section 4(2)(a)(i) and Section 4(2)(c) of the Act as discussed in Paras 70, 71, 72 and 73 of this order by FIH and HI. The abuses by HI and FIH have been clearly established by DG and on these issues the findings of the DG are correct and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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