CCI v.

TRAI

SUBMITTED TO:- SUBMITTED BY:-

Professor Dr. Nishikant Dhruv Dhawan

(20GSOL2010046)

LLM 2ND SEMESTER

SCHOOL OF LAW, GALGOTIAS UNIVERSITY

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1. INTRODUCTION:-

Telecommunication in India saw a tremendous boost after liberalization. Communication

service in India has a strong and healthy competition and this is the service which will continue
to rise in future as well as this service has brought the world so close that now you can contact
anyone within seconds without paying high charges unlike the scenario which was present
before liberalization that if you want to contact someone who have to wait for long hours and
the price of communication at that time was very high. After liberalization there has been
increase in the number of telecom service providers after liberalization and a lot of reforms
have also taken place. The reforms have proven to be beneficial for the consumers as it has
increased the competition. The competitive environment has led to conflict between service
providers which includes predatory pricing.

In order to make sure fair competition in this sector both the TRAI and CCI should work jointly
with each other. The Competition Commission should focus that competition prevails in
general and also look and bring measures to curb the anti competitive practices in various
sectors of the market. In the telecommunication sector there have been cases where the cases
of cartelization. The long distance segment of telecommunication was professed of cartel
formations by the ministers of the telecommunication in the year 2005. 1 Anti competitive
agreements and abuse of dominant position are the major distress for the commission. A
practice is adopted by countries where a regulator is appointed and the regulation of the
regulator are similar to that of the competition commission. Regulation in telecom sector is in
the hands of TRAI and DoT and the fact is that it is not known that how much attention is given
to the competition however sec 11 of the TRAI Act talk about promoting fair competition. The
annual reports, visions, consultation paper, recommendation talks about protecting the interest
of the consumer and growth in this sector but it fails to talk about the competition practices.

Section 18 of the Competition Act 2002 entrusts a duty on the commission to encourage fair
competition and protecting the interest of participants. Competition Commission of India
control and curb the illegal practices or the anti competitive practices on the other promote
competition and protect the interest of the consumers.

1
Hindu Business Line, October 07,2005, “Long distance operators dismiss cartel allegations”.

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Section 11 of Telecom Regulatory Authority of India Act, 1997 talks about the objectives. The
objective of the TRAI Act is to promote the telecom industry by ensuring competition and
optimum utilization of the telecommunication services. Chapter III deals with the powers and
functions of the TRAI. Section 11 of the TRAI Act, 1977 enumerated the functions of the TRAI
these include
a. Recommendation of various issues;

b. General administrative and regulatory functions;

c. Determining tariff and rates for services;

d. Such other functions as Central Government may entrust.

The two statues talk about the same objective i.e. fair competition, protection of the interest of
the participants and the consumers and building up an environment which promotes healthy
competition. However the 2 legislation imbricate and this has led to conflicts in the jurisdiction

2. COMPETITION ACT, 2002:-

Section 18 of the Competition Act, 2002 deals with duties of the commission, it says that it is
the duty of the commission to remove those practices from the which have unfavourable
outcomes on the market or those activities which do not encourage and support competition.
This has been done to safeguard the consumers and also interest of participants.

The sole objective of the Competition Act is to protect the consumers from ill practices and
that the right to trade cannot be taken away from any participant. This can be done by promoting
fair competition in the market as it will not ensure fair competition but on the other hand will
also prevent the exploitation of consumers. The proviso to this section says that commission in
order to discharge the function or duties given to the commission under the act, the commission
may make an arrangement or memorandum with the prior approval of Central Government.

This section strives to achieve the objective enshrined under Article 38 of the Constitution of
India. Article 38 of the Constitution of India talks about “State to secure social order for the
promotion of the welfare of the people. According to Article it shall be the duty of state to aid

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the well being of the consumers by providing a shield. The state shall also endeavor to reduce
the inequalities in states, facilities and opportunities.

8.3 THE TELECOM REGULATORY AUTHORITY OF INDIA ACT, 1997:-

Section 11(1) deals with the functions of the TRAI. These functions include:-
(a)recommendation either on behalf of the service provider/ licensor on its own motion
regarding:-
i when there is an introduction of new service provider its need and timings.

ii service provider needs to fulfill certain terms and conditions for licence.

iii recommendations for revocation in case of non compliance of the terms and conditions.

iv ensure fair competition and encourage orderly planning in the services of

telecommunication in order to make sure of the growth of the sector.

v bringing up of new technology and consideration of the type of instruments used in the
telecommunication industry.

vi optimum utilization of spectrum.2

(b) the following functions shall be carried out:-

i make sure that terms and conditions for licence are being adhered to.

ii make sure that the prescribed technology is being used and points of inter connections
are available to the service providers.

iii proper management for sharing of the profits which a service provider has earned using
the services of the other service provider.

iv keeping a record of the inter connect agreements.

v benchmark for the standards of quality for all the telecommunication services.

vi conformity with the universal service obligation.

2
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(1)(a).

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 vii keeping a record of the long distance calls.3

(c) imposing of fees and charges for the services taken from other service providers.4

(d) all the financial and administrative functions shall be performed as deputed by the Central
Government.5
Proviso to section 11(1)(a) says that the recommendation which have been referred are not
commanding on the Central Government. It is the sole discretion of the Central Government to
take into consideration those recommendations or not.

Proviso to section 11(1)(a) states that in case of new licence to be issued to a service provider
as provided in sub-clause (i) and fulfillment of terms and conditions as provided in sub-clause
(ii) the central government may take recommendations from the TRAI and for passing such
recommendation by the TRAI to the Central Government the maximum time limit is 60 days
from the date of demand by the Central Government.

“The TRAI may request the Central Government to furnish such information and documents
as may be necessary for the purpose of making recommendations under sub-clause (i) and (ii)
of clause (a) of this sub-section and that Government shall apply such information within a
period of seven days from receipt of such request.”
It is the duty of the Authority to publish in the Official Gazette the rates at which services
related to telecommunication will be available in India and outside India6

Section 11(3) the TRAI shall make sure that while carrying out its functions no act is done
which is against the sovereignty and integrity of India, public order or morality.7
Section 11(4) puts a duty on the TRAI to make sure there is clarity while making use of its
powers and carrying out its functions.8

3
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(1)(b).
4
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(1)(c).
5
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(1)(d).
6
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(2).
7
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(3).
8
The Telecom Regulatory Authority of India Act, 1997(Act 24 of 1994) s. 11(4).

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3. CASES RELATED TO JURISDICTIONAL CLASH BETWEEN COMPETITION
COMMISSION OF INDIA AND TELECOM REGULATORY AUTHORITY OF
INDIA:-

In Star India v. Sea T.V. Network9an effort was strived to throw light on clash of jurisdiction.
The MRTP Commission which is now known as Competition Commission of India has no
authority to deal with disputes related to TRAI.
In Consumer Online Foundation v. Tatasky and ors.10 the complaint was professed against
the DTH service providers stating that they were limiting the competition by providing tie up
services and equipments and thus building up barriers for new participants and infringes
Section 3 and 4 of the Competition Act. To use the DTH services customer shall have to buy 4
instruments i.e. antenna, receiver, smart card and the Set Top Box(STB) through this they can
hold their customer if he wishes to change the service provider he will have to buy the hardware
again as they were not compatible with other DTH providers and taking advantage of the
customer DTH provider would overcharge the person on monthly basis. The dispute in question
was already being dealt by the Telecom Dispute Settlement Appellate Tribunal and
Competition Commission of India’s jurisdiction was questioned by Dishtv. It was held that
Commission has full control over the competition in the market this would come under the
jurisdiction of Competition Commission of India and the arguments raised by the DishTV are
not correct.

4. DISPUTE RESOLVED BY THE SUPREME COURT OF INDIA:-

The Supreme Court in the case of Competition Commission of India v. Bharti Airtel ltd.
and others11 clarified as to who would have jurisdiction over telecom disputes i.e. Competition
Commission of India or the Telecom Regulatory Authority of India. The judgement was
pronounced on 5th December 2018 by division bench comprising of A.K. Sikri and Ashok
Bhushan, JJ. . The judgment was given with the help of doctrine of harmonious construction.

9
(2006) 2 CompLJ 487 TelecomDSAT.
10
Competition Commission of India, available at:
https://www.cci.gov.in/sites/default/files/MainOrderConsumer250411_0.pdf
11
2018 SCC OnLine SC 2678, decided on 05-12-2018

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 Facts of the case are as follows:-

Department of Telecommunication gave the license to operate to Reliance JioInfocomm Ltd.

on 21th October 2013 under section 4 of the Telegraph Act. After the license was granted for
providing telecommunication services in India RJio carried out interconnection agreements
among the existing service providers i.e. Airtel, Vodafone, Idea for sharing of the point of
interconnection(Pols) as it was causing obstruction the aftermath of which was call drops and
call failure. According to Jio the practice adopted by the incumbent dominant operators(IDOs)
was unethical and deliberate action. Subsequently interconnection points (Pols) were later
given to Jio but those were insufficient to cater the needs of the existing Jio subscribers. Jio
exclaimed that the practice adopted by the service providers was Anti Competitive in nature.
An application was filed by Reliance Jio under section 19(1) of the Competition Act, 2002 by
asserting an anti competitive agreement by Airtel, Vodafone, Idea and interconnection was
denied. Competition Commission of India issued to the incumbent dominant operators(IDOs)
after the parties were heard and investigation was ordered.12

A writ petition was filed in the Bombay High Court in this matter. The Bombay High Court
held that in this dispute it is the Telecom Regulatory Authority of India (TRAI) who has the
jurisdiction and not the Competition Commission of India (CCI). The High Court also held that
there was an error by the Competition Commission of India in exercising their jurisdiction as
Telecom regulatory Authority of India is the specialized body to deal with disputes relating to
telecom these includes interconnection, contracts, licenses, spectrum management and all other
offences. Thus it was held that TRAI had the jurisdiction. The Bombay High Court decision
was further challenged by CCI and RJio.13

Issues:-

The 2 major issues were identified by the Supreme Court of India:-

i Whether CCI can exercise its jurisdiction when TRAI is vested with the same.
ii Whether the writ petition filed against the order passed under section 26(1) of the
Competition Act admitted before the High Court.

12
Devika, “Supreme Court- TRAI and TDSAT to determine preliminary issue before CCI can decide competition
issue”, available at: https://www.scconline.com/blog/post/2018/12/07/cci-had-no-jurisdiction-to-pass-order-
for-enquiry-in-alleged-cartel-formed-between-airtel-idea-vodafone-coai-supreme-court/
13
Vaish Associates Advocates, “Supreme Court ends jurisdictional conflict between CCI and TRAI”, available at:
https://www.lexology.com/library/detail.aspx?g=9631fd99-fe8e-41b3-8595-25f1015609bd

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 Judgment by the Supreme Court of India:-

The Supreme Court said that the TRAI regulates the telecom sector and is specialized body and
ensures healthy growth of this sector in India on the other hand CCI objective is to encourage
fair competition and ensure freedom to trade in markets and products. TRAI manages only a
particular sector and CCI is general regulator in the market. The dispute in question was related
to interconnectivity agreements, terms of licenses of the telecommunications and it became
mandatory for sectoral regulator to take action on it.

The Objective of CCI is different from the objective of TRAI and so are their functions. It is
within the jurisdiction of CCI to observe an agreement which is anti competitive in nature and
the effect of that agreement in the market. This function is only covered by the CCI and the
TRAI has no jurisdiction in such matters. The Supreme Court did not agree that in such matters
the jurisdiction of CCI can be taken away.14

It was also said that if the TRAI had discovered that a cartel was created by the IDOs in order
to stop Jio’s entry in the market then it is the CCI who would have jurisdiction to decide
whether the practice adopted by the IDOs is an anti competitive and its adverse affects. The
TRAI Act limits the power of the TRAI and its jurisdiction whereas CCI had jurisdiction to
encourage fair competition. If both the CCI and TRAI were given jurisdiction to adjudicate the
dispute this might result in contradictory views. Thus it was necessary to avoid concurrent
jurisdiction.
The Supreme Court said that CCI order for investigation and provide justice to the parties. The
order was mainly an administrative order. The Supreme Court said that if an administrative
order is given by a court or tribunal that order must be given with certain reasons and the writ
petition was maintainable.

Lastly Supreme Court said that it is the TRAI who shall exercise its jurisdiction first in case of
telecom disputes and CCI will have a follow up jurisdiction i.e. if the TRAI feels that an anti
competitive practice is adopted by the IDOs it shall refer the dispute for adjudication to the
CCI.

14
Rajvansh Singh, “Supreme Court on Jurisdictional Conflicts between the CCI and TRAI”, available at:
https://indiacorplaw.in/2019/01/supreme-court-jurisdictional-conflicts-cci-trai.html

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