Competition Commission of India

M/s Mega Cabs Pvt. Ltd. v. M/s ANI Technologies Pvt. Ltd.

09.02.2016

MRTP/ Competition Laws

Contradictory ‘dominance’ reports for the same market bewilder CCI

The Competition Commission of India dismissed a complaint by Mega Cab, a popular app-cab operator, for investigation into the creation of barriers to entry into the market by Ola Cabs (ANI Technologies), another popular app-cab operator. For the purpose of defining relevant market, the Commission determined it would be restricted to a city or State and would be limited to radio taxi services industry, particularly since each State imposed its own regulatory regime. In the ‘Radio Taxi services in Delhi’ market Mega Cab’s claims that Ola held a dominant position was rejected. Evidence to support the same was also not bereft of doubt, since figures contained therein did not cite the source from which they were gathered or estimated. Moreover, with a preponderance of radio taxi companies in Delhi the market seemed sufficiently competitive; Ola’s prominent position in the market did not make it dominant. Mega Cab’s complaint had centered around Ola having huge financial backing, which a new entrant to the market would not have, and it restricted taxi drivers from plying for competitors’ services.

A similar complaint was by Meru Cabs against Uber Cabs to the Commission for Uber abusing its dominant position by offering unreasonable discounts amounting to predatory pricing and giving drivers incentives to attach them with Uber’s network exclusively. A report submitted by Meru claiming Uber’s dominance in Delhi’s radio taxi market was rejected by the Commission for the possibility of inaccurate data. The Commission specifically delved into contrasting ‘dominance’ claims in both matters, noting Meru’s reply that both reports referred to different time periods. The strategy backfired when the Commission stated that two reports suggesting such a fluctuating market share showed a competitive landscape in a “vibrant and dynamic” market.

Tags : Radio taxi relevant market financial backing exlclusivity

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