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TMI Blog2019 (8) TMI 1778X X X X Extracts X X X X X X X X Extracts X X X X ..... right. However, the ultimate viewers of sport events are the end consumers, who influence the popularity of the sport. Also, a sports federation requires services of players, officials, etc. for staging an event which makes sports federations themselves as consumers. In this multitude of relationships, defining the relevant consumer would enable defining the relevant market. The Commission notes that as per the decisional practice of Commission, there is an inherent conflict of interest when an entity is acting as a regulator as well as an organiser. The restraints imposed by the regulator would be justified if the restraint on competition is a necessary requirement to serve the development of sport or preserve its integrity. Furthermore, the proportionality of the regulations can only be decided by considering the manner in which regulations are applied - it requires to be analysed whether VFI, which is a regulator of volleyball as well as the organiser of volleyball tournaments, was justified to enter into agreement with Baseline giving it exclusive rights for a period of 10 years to conduct and organise Volleyball League in India to the exclusion of other enterprises and cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riya ( Informant No. 3 ) under section 19(1)(a) of the Competition Act, 2002 (hereinafter, the Act ) against Volleyball Federation of India ( VFI ) and Baseline Ventures (India) Private Limited ( Baseline ), alleging contravention of the provisions of Sections 3 and 4 of the Competition Act, 2002 ( the Act ). Brief facts and allegations as per the information 2. The Informants are International volleyball players who have represented India in numerous international championships and tournaments. 3. VFI is a National Sports Federation ( NSF ) for Volleyball in India recognised by the Ministry of Youth Affairs Sports, Government of India. 4. VFI is the exclusive holder of all the rights pertaining to volleyball including commercials associated with it. It exercises full control over the players of volleyball registered or associated with it, with respect to their participation in all sporting events, leagues, tournaments, sale and promotion of their goodwill, reputation, sponsorship, endorsement rights, media and advertising rights and other commercial rights. 5. Baseline is a company registered under the Companies Act, 2013 and is, inter-alia, engaged in providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gue; (v) During the tenure of said agreement for next 10 years, VFI shall not directly or indirectly, deal or engage in any sort of activity or project or leagues or event of the same nature in India or abroad. 8. VFI is an enterprise within the meaning of Section 2(h) of the Act, as it has the mandate to undertake the economic activity of organising national and international volleyball events. Being the sole and exclusive authority to regulate and govern the game of volleyball, it enjoys powers including selection of Indian volleyball players, conducting national, open and international tournaments, approving tournaments, placing restrictions on participation of players, hearing appeals and grievance of players, VFI enjoys dominant position in the market for conducting and governing domestic and international volleyball activities for both men and women. VFI holds the right to give necessary permissions and rights for organisation of volleyball leagues. 9. By granting exclusive rights for 10 years to Baseline to organize Volleyball League and by restricting and prohibiting any other person or enterprise from organising a similar Volleyball League for the next 10 years, V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sole authority for dispute resolution for players, the players have no recourse or remedy in case VFI decides to impose punishment on them for playing in other leagues. This amounts to abuse of dominant position by VFI and is in contravention of Sections 4(2)(a)(i), 4(2)(b)(i), 4(2)(c) and 4(2)(d) of the Act. 13. The Informants have stated that the clauses of the Agreement are per se anti-competitive and amount to controlling and limiting of the availability of volleyball players for other leagues for the next 10 years; controlling and restricting the volleyball players to participate in any other league of their choice for the next ten years; controlling the market for volleyball players as well as for other enterprises to hold the league; and refusal on the part of VFI to deal with enterprises other than Baseline. As per the Informants, the said Agreement is alleged to be in contravention of Section 3(3)(b) and Section 3(4)(d) read with Section 3(1) of the Act. It has been alleged that by entering into an agreement with Baseline and disallowing the volleyball players to compete at local, national and international level would cause grave prejudice to the interest of thousand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the fact that VFI amended its Agreement dated 21.02.2018, showed that the said Agreement was anti-competitive in the first place and therefore penalty should be imposed on VFI and Baseline. 18. The Commission on 23.05.2019, considered the written submissions filed by Informants and VFI and the affidavit dated 17.04.2019, filed by VFI and directed VFI to file another affidavit with regard to directions contained in the order dated 11.04.2019, of the Commission that restrictions contained in the Agreement dated 21.02.2018, between OP- 1 and OP-2 are only with respect to conducting volleyball league by the name 'Indian Volleyball League' and there has been no restriction on conduct of any other league of same or similar nature. VFI accordingly filed another affidavit dated 13.06.2019, confirming that there are no restrictions on any other person from conducting similar volleyball league (at domestic, state, national or international level). However, such volleyball league conducted by any person other than Baseline, will not be conducted in association with VFI during the term of its Agreement with Baseline. 19. The Commission considered the affidavit dated 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arity of the sport. Also, a sports federation requires services of players, officials, etc. for staging an event which makes sports federations themselves as consumers. In this multitude of relationships, defining the relevant consumer would enable defining the relevant market. 24. The Commission observes that delineation of 'relevant market' for the analysis of allegations pertaining to restrictions on competing organisers to organise events should be considered from the point of view of final consumer, i.e., the spectators. Given the unique characteristics of volleyball, it is unlikely the consumers will regard any other sport or event as substitutable. Similarly from intended use perspective also, entertainment from sports may not be regarded as substitutable with other forms of general entertainment. Accordingly, the relevant product market to assess restrictions on organisations of the volleyball events will be the market for organisation of professional volleyball tournaments/events . The Commission further notes that for assessment on restrictions on volleyball players, VFI requires the services of volleyball players for organising volleyball events which makes i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is the sole governing body of the game of Volleyball and of the players of volleyball registered or associated with it. As per the Memorandum of Association contained in its Constitution and Bye Laws, VFI is the official organisation in complete and sole charge of all the matters concerned with the game of volleyball in India. Furthermore, VFI is vested with the authority to organise National Championships for Men, Women, Boys and Girls. VFI is also empowered to select teams to represent India in International competitions. Being the sole governing body of players of volleyball registered/associated with it, it exercises full control over them with respect to their participation in all sporting events, leagues, tournaments, sale and promotion of their goodwill, reputation, sponsorship, endorsement rights, media and advertising rights and other commercial rights. As a result, VFI is the de-facto regulator and an exclusive body responsible for the conduct and governance of all volleyball events in India. Further, regulatory powers enjoyed by VFI include right to give permission and rights for organising any volleyball league. Thus, regulatory powers coupled with right to carry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per the Informants, the alleged conduct is anti- competitive and it restricts all other volleyball players who are not part of Baseline's Volleyball League from participating and representing India in the Asian Championship. 35. The Informants have stated that besides them numerous other international and national players have been devoid of an opportunity to be part of auctions of Volleyball League being organised by Baseline. It has been alleged that VFI and Baseline arbitrarily selected players to form pool of players available for auction for Baseline's league. Further, several reputed and high ranked players who have represented India in various tournaments were arbitrarily denied an opportunity to be part of the auction pool without any reason, thereby shutting doors for such players to be part of the Volleyball League or to play in Asian Championship. 36. In this regard, the Commission notes that competition cases relating to sports associations/federations usually arise due to the dual roles, regulatory as well economic, performed by them. In this regard, the Commission, in Hemant Sharma's Case (Supra)in relation to conflict between regulatory and econo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has at this stage perused each clause of the Agreement as it existed during the preliminary conference held with the parties which allegedly places restrictions on organisation of tournaments similar to those of Volleyball League and on players for participation in events similar to Volleyball League. The Commission notes that through Clause 2.2 of the Agreement, VFI has prima facie prohibited any other league of same or similar nature/format/idea as that of Volleyball League to be organised within the territory of India or abroad for a period of ten years as well as even after renewal or extension of the said Agreement. 40. Further, in terms of Clause 2.14 of the Agreement, VFI would ensure that no international or national event of volleyball sports are organised or allowed to be organised for ten years which may have interest conflicting with that of the Volleyball League. The Agreement also contains a non-compete clause whereby VFI would not deal with or engage in any sort of activity or project or leagues or event of same or similar nature in India or abroad. Furthermore, VFI, in the non-compete clause, has undertaken not to allow any person or association to organise an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent takes place during the League. iii. Players selected to participate in the League in 2019 were selected only for the year 2019 and they are not bound to participate in the League for next 9 years. No player has been forced to participate in the League. iv. Announcement made by the VFI regarding participation of the team winning the first ever League in the Asian Men's Club Championship was only to promote the sport of Volleyball and considering the fact that no Club in India has been coming forward to participate in the said Championship. The said Championship is not government Championship and the players participating in the said Championship represent their respective Clubs. All the expenses towards participation in the said Championship are borne by the club. v. Selection of India Volleyball teams for domestic and international tournaments is completely independent of the participation of the players in the League. No special points/consideration is/will be given to the players on account of their participation or performance in the League. 44. The Commission at this stage is of the prima facie opinion that certain clauses of the agreement dated 21.02.2018 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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