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TMI Blog2015 (4) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... d in fact exist, the important question is whether such arrangements/agreements are anti-competitive. Section 3(1) of the Act unequivocally condemns only such agreement/arrangement/understanding which has or is likely to have an AAEC in the market. Section 3(3) of the Act presumes AAEC in case of certain horizontal agreements/arrangements which have been specifically identified therein. However, vertical agreements/arrangements under section 3(4) and other agreements/arrangements which do not fall under section 3(3) are anti-competitive only when AAEC is proved. The bare perusal of the agreement on the touchstone of the factors laid out suggests that such agreements do not result into AAEC. It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints. For example, mobile phones, tablets, books, camera etc., are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P 1 ),M/s Jasper Infotech Private Limited (hereinafter, OP 2 ), M/s Xerion Retail Private Limited (hereinafter, OP 3 ), M/s Amazon Seller Services Private Limited (hereinafter, OP 4 ), M/s Vector E-commerce Private Limited (hereinafter, OP 5 ) and other e-commerce/portal companies (collectivelyhereinafter, OPs ) for their alleged contravention of the provisions of section 4 of the Act. 2. Briefly, OPs are the individual e-portals or e-commerce sites for online trade and commerce. The Informant has alleged that OPs have been indulging in anti-competitive practices in the nature of exclusive agreements with sellers of goods/services. It has been urged that due to such practices, the consumer is left with no choice in regards to terms of purchase and price of the goods and services as thebuyer/consumercan either accept the terms and conditions in totality of the e-portal or opt not to buy the product. 3. The Informant alleged that the e-portals/e-commerce websites and product sellers enter into exclusive agreements to sell the selected product exclusively on the selected portal to the exclusion of other e-portals or physical channels or through any other physical channel. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. To form prima facie opinion in the instant case, the Commission perused the documents submitted by the parties and heard the parties through their authorised representatives. Further, the Commission observed that the Director General ( DG )vide its letter dated 24.12.2014 has forwarded a complaint of one Shri Mahinder Aggarwal, President, All Delhi Computer Trader Association (ADCTA) against the e-portals/e-commerce companies who are OPs in the present case. Accordingly, the Commission decided to provide an opportunity of hearing to Shri Mahinder Aggarwal also. 8. OPs submitted that they are third party platforms and offer ready to use environment to potentially large number of customers and manufactures. It was submitted that an e-commerce portal s business is based on a market place model where the manufacturer/supplier is the owner of the products sold through online retail portals and the customer making such purchase is the end consumer of the product, the online retail portals merely acting as a platform that bring the two sides together for facilitating the transaction. 9. It was contended by the OPs that the relevant product market as suggested by the Informant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket and even in the e-portal marketand their respective shares are miniscule to cause any AAEC in the said market. It was contended that given the wide range of products, availability of substitutes, and consumer preferences, no single manufacturer (of apparel or books or smartphones) is able to exercise market power to cause any competition concern. 12. ADCTA, an association of computer traders, submitted that these e-portals/e-commerce websites have engaged in unfair trade practices and introduced illegal black money as Foreign Direct Investment in such business. It was contended that OPs have adopted the practice of purchasing goods from distributors/dealers on 21 to 30 days credit and then subsequently selling these products at prices lower than the purchase prices. As such, their liabilities increase many fold compared to their assets and to escape their creditors, they suddenly wind up their businesses and run away with money of distributors/dealers. ADCTA further submitted that OPs impose conditions like quantity restrictions, purchase of goods by the end consumers only for personal use and not re-sale etc. It is alleged that the OPs have also indulge in practices like p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement on the touchstone of the factors laid out above suggests that such agreements do not result into AAEC. It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints. For example, mobile phones, tablets, books, camera etc., are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appear that because of these exclusive agreements any of the existing players in the retail market are getting adversely affected, rather with new e-portals entering into the market, competition seems to be growing. 17. Further, the Commission observes that online distribution channel by the OPs provide an opportunity to the consumers to compare the prices as well as the pros and cons of the product. Furthermore, through the option of delivery right at their door steps consumers have the opportunity to accept the purchase at their convenience and do not need to set aside a couple ..... X X X X Extracts X X X X X X X X Extracts X X X X
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