III.

The conduct of FastZaap, PayKing and Heisenberg are in contravention with

section 4 & section 3(4) of the competition law

34. It is humbly submitted before the honorable court that FastZaap, PayKing and
Heisenberg have abused there dominant position as first, the conduct of alleged
companies in relevant market has contravened the provision of section 4 of the act
(A), second the conduct of alleged companies has contravened the provision of
section 3(4) of the act (B).

The alleged companies in the relevant market has contravened the provisions of
Section 4 of the act

It is humbly submitted before the honourable court that FastZaap, PayKing and
Heisenberg are collectively dominant relevant market. Dominance of more than one
undertaking in the same relevant market has been recognize in past bylandmark
rulings of the U.SCourt.1In the present case F,P and H has abused their dominant
position as first, the relevant market in the instant case is “MARKET FOR
PAYMENTS VIA E WALLETS IN KRATOS” [A]; secondly, FastZaap, PayKing and
Heisenberg hold a dominant position in the relevant market[B],and lastly, FastZaap,
PayKing and Heisenberg abused such dominant position [C].

It is crucial to determine2 the ‘relevant market’3 in order to establish abuse of dominant

position4. The court must consider the relevant geographic market5 and relevant product
market6 for determining the relevant market.

In the instant case, the Relevant Geographic Market is KRATOS (a), and the Relevant
Product Market is ‘Market for E WALLETS’ (b).

a. The relevant geographic market is KRATOS.

1
US v Visa, Inc., 344 F.3d 229 (2nd Cir. 2003), pp. 239 [hereinafter “Visa”]
2
Competition Act 2002, § 4(2)
3
Shri M. M. Mittal v M/s Paliwal Developers Ltd. [2016] SCC Online CCI 61, ¶ 4.
4
Prints India v Springer India Pvt. Ltd. [2012] 109 CLA 411 CCI, ¶ 19
5
Meru Travel Solutions Pvt. Ltd. v Uber India Systems Pvt. Ltd. & Ors. [2016] CompLR 209 (CCI), ¶ 18; See also
United States v Marine Bancorporation[1974] 418 US 602.
6
Competition Commission of India v Steel Authority of India Ltd. & Anr. [2010] 10 SCC 744 , ¶ 4.
“The relevant geographic market comprises of the area in which the conditions of
competition for supply of goods or provision of services or demand of goods or services are
distinctly homogenous and can be distinguished from the conditions prevailing in the
neighbouring areas”7.§. 2 (s) read in line with §. 19 (6) of the Act outlines relevant
geographic market.8In the present case relevant geographic market is Kratos.

b. The relevant product market is ‘Market for E-wallets

Relevant product market9 is primarily determined by substitutability of goods from consumer
perspective,10 and supplier perspective.11The intended use of product is considered as the
most significant factor in determining relevant market.12

In the present case relevant product market is ‘Market for E-wallets’ reliance is placed upon
the case of United states v. Visa it was held ‘different forms of payment-such as cash, checks,
debit cards, and proprietary cards are not consider reasonable substitutesby most
consumers’13as their comparative lack of trader acceptance, and their lack of a credit
function, on-line debit cards, which contain a pin number, are not suitable substitutes for
general purpose cards. Consumer enjoy a positive benefit from the use of e-walletsby earning
mileage rewards or "cash back"14 which they do not get by paying through cash, cheque,
debit card etc. And, thereby the relevant product is ‘Market for e -wallets’.

(b) That the FastZaap, PayKing and Heisenberg hold a dominant position in the
relevant market

It is humbly submitted that, more than one enterprise can be considered as dominant in the
same relevant market asfirstly, Existence of more than one dominant enterprise is not
restricted under the Competition Act, 2002.Secondly; the concept of collective dominance
expresses the existence of more than one enterprise being dominant in the market. Lastly, the

7
In re ShriAvtar Singh v M/s Ansal Township & Land Development Ltd. [2014] CompLR 154 (CCI), ¶ 8.
8
Ariel Ezrachi, EU Competition Law: An Analytical Guide to the leading cases (4th edn. Oxford and Portland
2014) 54.
9
James A Keyte, ‘Market Definition and Differentiated Products’ [1994] 63 Antitrust LJ 697.
10
Case 6/72 Europemballage Corp. & amp; Continental Can Co. Inc. v Commission [1973] ECR 215.
11
Case T-65/96 Kish Glass & Co. Ltd. v Commission [2000] ECR II-1885.
12
Case T-151/5 NVV v Commission [2009] ECR II-1219.
13
Supra at 1.
14
Moot proposition
alleged company has the ability to operate independently of the competitive forces prevailing
in the relevant market.

(1)Existence of more than one dominant enterprise is not restricted under the
Competition Act, 2002.

According to Section 4 of the Competition Act, 200215, dominance and abuse of dominance
are defined as “No enterprise or group shall abuse its dominant position.”16

Section 4 does not lay down that there can be only single dominant enterprise but stipulates
that ‘no enterprise’ shall abuse its dominant position. It is stated that the word ‘no enterprise’
is to express with certainty the prohibition and not to bind such prohibition to one enterprise.
Beside this, if the § 13(2) of General Clauses Act is applied to interpret the statute it becomes
clear ‘singular shall include the plural and vice versa.’ and, therefore, the expression ‘an
enterprise’ used in the explanation would include reference to more than one enterprise.In
several cases, the singular terms such as state17, person18 and association19 have been held to
include their plural meanings as well.

The CCI has also discussed the likelihood of existence of more than one entity attaining a
position of dominance in the market they held that ‘the concept of dominance does centre on
the fact of considerable market power that can be exercised only by a single enterprise or a
small set of market players’.20

The meaning of dominant position under the Act is very wide and it can include two or more
undertaking which have the dominance to affect competitors or relevant market in their
favour. The interpretations made by the Canadian Competition Tribunal in the case of
Commissioner of Competition v. Visa Canada Corporation and Master Card International
Corporation, 201321, wherein the Tribunal observed that 2 enterprise viz. Visa and
MasterCard having market power in the same relevant market. Alternatively, by entering into
exclusivity agreement with Internet Service Providers (ISP), there can be amalgamations

15
Competition Act 2002, § 4
16
Competition Act 2002, § 4
17
S. Sher Singh s/o S. Hukam Singh v. Raghu PatiKapur & Anr., A.I.R. 1968 P&H 217 (India).
18
Nathu v. State, A.I.R. 1958 All. 467 (India)
19
In re: Phool Din &Ors., A.I.R. 1952 All. 491(India).
20
Case No. 2/2009 Consumer Online Foundation v. Tata Sky &Ors. [2011].
21
Commr.of Competition v. Visa Canada Corpn. and MasterCard International Inc. 2013 Comp Trib 10 (Canada).
between three rivals in the business leading to elimination of effective competition,
eventually affecting the consumer interest.

The Act is not intended to forbid competition in the market. It simply acknowledges the fact
that competition is subjected to harm, especially from dominant undertakings which can
solely control the market structure and eventually resort to practices that can cause a
substantial adverse effect on the consumer as well as other competitors in the market. Thus, it
becomes indispensible to take due caution and clarity in exercising and upholding the
purpose and spirit of the Act.

(1.a)That the concept of collective dominance expresses the existence of more than one
enterprise being dominant in the market

It is humbly submitted before the Hon’ble court that in line with the global trend and looking
at the dynamic environment of competition, the Union Government on 7 Dec 2012,
introduced the Competition (Amendment) Bill, 2012 in the Lower House (LokSabha) and
thereby providing recognition to collective dominance.

The introduced amendment in § 4 sought to provide for the recognition of the likely existence
and following space to regulate ‘collective dominance ‘and proposed that § 4(1) be amended
with the insertion of the words “jointly or singly”. Consequently, the proposed amendment of
the wordage of Section 4(1) would be: “No enterprise or group, jointly or singly, shall abuse
its dominant position”.

The definition of enterprise in Section 2 (h) and section 4 does not stipulates that two or more
single entities can be clubbed to form collective/ joint dominance but neither does it barred
the potential of existence of more than one enterprise in the same market. While applying the
rules of interpretation, if there is vagueness and the provision is subject to two meanings, the
court should interpret it in the manner which will best serve the object sought to be
achieved22.

In addition to this, it is humbly submitted that The Competition act of India as well as Kratos
are greatly inspired and influenced from the European Union law and United States of

22
Rakesh Wadhwan & Ors. v. Jagdamba Industrial Corp. [2002] 5 SCC 440.
America23.The Treaty on the Functioning of the EU24 has been conscious of the existence of
more than one dominant entities in the same market and has made express reference to the
same in Article 102 which recognizes a situation of abuse of dominance by more than one
enterprise under the umbrella of ‘collective dominance’25.

The opening words of Article 102 of TEFU begin with the expression “any abuse by one or
more undertakings of a dominant position” And the very first instance of this expression one
or more undertakings used by a court in the Italian Flat Glass case26 affirmed that “there is
nothing in statute to prevent two or more legally and economically independent entities
operating in same market united by such economical link that by virtue of which, they could
hold collectively dominant position.” This denoted the introduction of the concept of
collective dominance in Europe. Further, in the present case all three companies P,M& C
hold a strong economic link by entering into exclusivity agreements separately with Internet
Service Providers (ISPs).

In order to establish a collectively dominant position under EU law, it is necessary that

competitors are single economic unit and must have some “economic links” in such a manner
that they adopt the same conduct on the market27. Unlike cartelization (Section 3 of
Competition Law Act, 2002) in collective dominance there is no need to establish agreement
between the parties, which eventually lessen the burden of aggrieved by the collective
dominant entities28, and thereby, making the process simpler & fairer in line with consumer
interest.

It is humbly submitted that the CCIs judgements that there can be only single dominant
enterprise in a relevant market is solely based on the wordage of section 4 which states “if an
enterprise or a group”.29 Further, the CCI has speak out that had the parliament’s intent been

23
Suzanne Rab, Indian Competition Law- An International Perspective(CCH Publications 2012).
24
Art. 102 of the Treaty for Functioning of European Union
25
OFFICIAL JOURNAL OF THE EUROPEAN UNION, COMMUNICATION FROM THE COMMISSION — GUIDANCE
ON THE COMMISSION'S ENFORCEMENT PRIORITIES IN APPLYING ARTICLE 82 OF THE EC TREATY TO ABUSIVE
EXCLUSIONARY CONDUCT BY DOMINANT UNDERTAKINGS, (2009), available at http://eur-
lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52009XC0224(01).
26
Judgment of the Court of First Instance (First Chamber) of 10 March 1992. – SocietàItalianaVetroSpA,
FabbricaPisanaSpA and PPG VernantePennitaliaSpA v Commission of the European Communities – EURLex-
61989A0068.
27
6SocietàItalianoVetroSpA v. Commission,(1992) E.C.R. II- 1403.;Almelo v. NV EnergiebedrijfIjsselmij,(1994)
E.C.R. I- 1477

28
France v Commission [1998] ECR I- 1375.
29
Competition Act 2002 § 4 (2),
to recognise more than one dominant entities in a relevant market, it would have used the
words “any enterprise” instead of “an enterprise”30

However, the judgements of CCI are in contrary with the government’s explanation of the
particularsection at the time of institution of the Competition Bill in 2001. Parliamentary
Standing Committee on Home Affairs provided with the explanatory statement on the
Competition Bill reads “the clause bars abuse of dominant position by any
enterprise”.31Hence, it can be sensibly concluded that the statutory intent was to take account
of more than one dominant entity. Therefore, all CCI have to do is to re-examine this
concept, while keeping in mind the preamble of the act i.e. ’to promote and sustain
competition in the market’.

(2) F, P, H has the ability to operate independently of the competitive forces prevailing
in the relevant market.

To determine whether F, P, H has ability to operate independently of competitive force in the

relevant market,32 the elements under §. 19 (4) such as 33. These elements include (i), Market
share (ii) economic power (iii), vertical integration (iv), V and M’s commercial advantages
over its competitors (v), dependence of consumers on F, P, H (v) F, P, H’sare putting entry
barrier.

i. Market share of 3 companies

Market share shows the dominance of an undertaking in a relevant market.34 According to §.

19 (4) (a) of the Act,35 the commission shall consider market share of the undertaking to
decide existence of dominance.36 Even if market share cannot be the lone factor for

30
Akash Gupta & Shweta Dubey: Nurturing competition, Business-standard.com <http://www.business-
standard.com/article/opinion/akash-gupt-shweta-dubey-nurturing-competition 117021800695_1.html >
accessed 17 February 2019.
31
Department-Related Parliamentary Standing Committee on Home Affairs, Ninety-third Report on the
Comptetition Bill, 2001, ¶ 3 [hereinafter “Standing Committee”]
32
S.M. Dugar, ‘Guide to Competition Law’ (5th edn, LexisNexis 2015).
33
D.P. Mittal, ‘Competition Law And Practice: A Comprehensive Section Wise Commentary On Law Relating To
The Competition Act’ (3rdedn,Taxmann 2011) 282
34
United Brands v Commission, [1978] ECR 207, ¶ 3
35
0 S.V.S. Raghavan Committee Report on High Level Committee on Competition Policy & Law 23 [2007]
<http://www.competitioncommission.gov.in/Act/Report_of_High_Level_Committee_on_Competition_Policy_
La w_SVS_Raghavan_Committee29102007.pdf> accessed 20 February 2019.
36
Competition Act 2002 §19(4).
determining dominance, it however, is a persuasive37 and very muchsubstantial factor for the
courts to consider.38 Holding a substantialsum of share in the market shows a dominant
position.39 The European Commission establish British Airways in a place of dominance with
a market share of 39.7%.40

Three companies collectively holding 75% of total market share indicates the dominance
position that they enjoy in the relevant market.

ii. Economic power

According to §. 19 (4) (b) of the Act, the commission may consider enterprise economic
power and commercial advantages over competitors.

It would not be unreasonable to induce that F, P, H’swhose parent co. Primere, Moneycart,
Chapo, having considerable share in the market of e commerce sector. Possesses
distinguishable resources and has a very wide area of operations, which is clearly evident
from the fact that primere within 3 months of upgradation, had expanded its e wallet co. to
the whole kratos.

iii. Commercial advantage over its competitors

Commercial advantage of an enterprise over its competitors is another factor in determining

the dominant position under §. 19(4).41

By entering into exclusivity agreement with the different ISP prohibiting consumer from
using any other e wallets, F, P, H clearly enjoyed commercial advantage over small e wallets
companies like David & Co, eventually making them individually dominant in the relevant
market.

iv. Dependence of consumers on F, P, H

Where the co. have all over presence in the market and substitutability of goods is absent 42
then the chances of enterprise to dominate the market is very high 43. Moreover, exclusivity
agreement with ISP restricts the consumer’s choices limited to three co.

37
Neeraj Malhotra, Advocate v. Deustche Post Bank Home Finance Limited &Ors. [2011] 106 SCL 108 (CCI), ¶
19.2.
38
Hoffmann-La Roche & Co. AG v Commission [1979] ECR 461, ¶ 5.
39
Arshiya Rail Infrastructure Ltd. v Ministry of Railways [2013] 112 CL.A 297 (CCI) ¶ 28.
40
British Airways v Commission [2003] ECR 5917 ,¶ 175.
41
Giorgio Monti, EC Competition Law (1st edn, Cambridge 2007 ) 356.
 v. Size and importance of the competitors

The commission may consider size and significance of the competitors to establish an
enterprise’s dominant position.44

With their individually high market shares, it is evident that no other entities substantially
threats F, P & M in terms of competition.

Herfindahl-Hirschman index (HHI)

The Herfindahl-Hirschman index (HHI) is a commonly recognized measure to determine

market concentration. It is a measure of the size of firms in relation to the industry and an
indicator of the amount of competition among them.An HHI above 0.25 (above 2,500)
indicates high concentration. Higher the value of the index, lower is the level of competition
and higher is market concentration in the industry. In the present case HHI for the e-wallets
markets is 2700 which clearly indicates the dominant position enjoyed by the three
companies in the relevant market.

(C)FastZaap, PayKing and Heisenberg Exclusionary Conduct Amounts To Abuse Of

Dominant Position

Abuse of dominant position has been defined under §. 4(2) of the Act45 .The Competition act
permits enterprise/undertaking to be in a dominant position46 since dominance per-se is not
unlawful but restrict it from abusing it.47 In the case of United Brands the European Court Of
Justice define dominant position as one “which prevent effective competition being
maintained on the relevant market.”48

The competition commission of India has considered exclusivity/exclusionary conduct 49 as

abuse of dominant position50. F, P& H are creating huge barrier for the small e wallets

42
Supra at 8.
43
Case No. 03/2012 M/s Maharashtra State Power Generation Company Ltd. v M/s Mahanadi Coalfields Ltd.
[2012] CCI.
44
Maher M. Dabbah, EC and UK Competition Law: Commentary, Cases And Materials (1st edn, Cambridge
2004)
45
Competition Act 2002,§ 4 (2).
46
Competition Act 2002, § 4.
47
M/s Jupiter Gaming Solutions Private Ltd. v Secretary, Finance, Government of Goa [2012] CompL.R 56 (CCI).
48
United Brands v Commission [1978] ECR 207, ¶ 3.
49
MCX Stock Exchange Ltd. v NSE India Ltd. [2011] SCC Online CCI 52, ¶ 11.5.
companies by entering into exclusivity agreement with ISP. The presence of entry barrier51
or denial of market access results into dominance of enterprise which usually leads to abuse
of dominance52.

It is pertinent to restate here that the 3 company collectively hold 75% of the market share53
and exclusivity contracts entered into by them are denying market access to smaller e- wallets
companies. Entering into exclusivity agreement/contracts54 and denial of market access55 had
been held illicit and considered as abuse of dominant position56.

Hence, whether single player does harm or two should in fact not be the standard for a
regulator to act; the actual assessment is whether there has been any adverse effect on
competition as a result of anti-competitive behaviour on the part of one or more entity,
thereby taking into consideration the significance in the presence of more than one dominant
enterprise and its influence as well as behaviour in the market.

(A) The alleged companies in the relevant market has contravened the provisions of
Section 3(4) of the act

Section 3(4)b of the Competition Act deals with exclusive supply . Agreements under
Section 3(4) will be in violation of Section 3(1) of the act if it causes Appreciable
Adverse Effect on Competition.57
Consequently, it is humbly submitted before the Hon’ble court that alleged companies
violated Section 3(4)b of the act because there was anti-competitive agreement between
Premier, Moneykart Chapo and Internet Service Provider (ISP)

It is humbly submitted that agreement between the alleged companies and ISP , is anti-
competitive as Agreement amounts to exclusive supply.

50
M/s H.T. Media Limited v Super Cassettes Industries Ltd. [2014] SCC Online CCI 120, ¶ 174
51
H.T. Media, supra note 83
52
Cine Prakashakula Viniyoga Darula Sangham v Hindustan Coca Cola Beverages Pvt. Ltd.[2011] SCC OnLine CCI
27.
53
Moot proposition
54
In re Bhartia Cutler Hammer Ltd. [1997] 24 CLA 104 (MRTP), ¶ 22
55
JusticketsPvt. Ltd. v Big Tree Entertainment Pvt. Ltd. & Vista Entertainment Solutions Ltd. [2017] SCC Online
CCI 14, ¶ 69.
56
XYZ v REC Power Distribution Co. Ltd. [2015] SCC Online CCI 8, ¶ 19 & 21; See also; Case T-201/04 Microsoft
Corpn.v Commission of the European Communities ¶ 22; H.T. Media, supra note 83.
57
 The Agreement does not amount to exclusive supply

The most significant factor to determine exclusive supply is exclusion of the competitors.58 In
the case of shri shamsher kataria v. Honda siel cars india ltd and ors59 the concept of
exclusive supply agreement were considered by the commission. In the instant case the
informant had alleged anti-competitive conduct on the part of opposite parties whereby the
some spare parts of automobile manufactured by the OPs were not made easily available in
the market. The commission held that such agreements were in the nature of exclusive supply
and refusal to deal and hence the commission determine that such agreements would have an
AAEC in the relevant market.

In the present case alleged companies exclusive contract with ISPs allowed the them to
become monopolistic players as a consequence created entry barrier and foreclose
competition for a large number of fringe players or potential/new entrants.

58
United States v Parke Davis & Co. [1960] 362 US 29.
59