Case No. 35 of 2013. Case: Advertising Agencies Guild Vs Indian Broadcasting Foundation & its members. Competition Commision of India

Case Number:Case No. 35 of 2013
Party Name:Advertising Agencies Guild Vs Indian Broadcasting Foundation & its members
Counsel:For Appellant: Lakshmikumaran & Sridharan, Advocates (New Delhi)
Judges:Ashok Chawla (Chairman), H.C. Gupta, Member (G), Geeta Gouri, Member (GG), Anurag Goel, Member (AG), M.L. Tayal, Member (T) and Shiv Narayan Dhingra, Member (D)
Issue:Competition Act, 2002 - Sections 2(c), 25, 26(2), 3, 3(1), 3(3)
Judgement Date:July 01, 2013
Court:Competition Commision of India
 
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Judgment:

Order under Section 26(2) of the Competition Act, 2002

  1. Informant was an association of small and medium sized advertising agencies set up to look after the interest of small and medium sized agencies besides interacting with professional bodies such as the Indian Newspaper Society (INS), Government, advertising agencies and associations. Indian Broadcasting Foundation (IBF) (OP 1) was a section 25 company, claimed to be India's premium apex organization of television broadcasters. OP 1 was stated to consist of major broadcasters with more than 250 TV Channels enjoying a unique position as the accredited spokesman of the broadcasting industry. Informant alleged formation of a cartel by the members of IBF through the medium of OP 1. It further alleged that OP 1 and its members had been acting as a cartel for a long time and even during the MRTP regime OP 1 was suspected of acting as a cartel. The informant association averred that the members of OP 1 wanted to shift from the time tested and industry wide practice of gross billing basis to a net billing to the advertising agencies and were forcing the advertising agencies to agree to the new mechanism. They collectively boycotted and did not broadcast advertisements on their Channels for two days viz. 01.05.2013 & 02.05.2013.

  2. The informant stated that the Advertising agencies had no other option but to agree to the demands of OP 1 as it directed all its members to stop screening advertisements during the aforementioned period and thereby forced the advertising agencies to shift to the new billing system. This act of OP 1 was described in the information as a classic case of a group boycott/cartel where all the channels boycotted the advertisement agencies.

  3. It was alleged that the agreement amongst the members of OP 1 and the decision taken by OP 1 to switch to a net billing method are agreements in violation of sections 3(1) and 3(3) of the Act and has an appreciable adverse effect on competition. The informant further alleged that the decision taken by OP 1 to drop advertisements from TV on 01.05.2013 & 02.05.2013 and the action of the broadcasting companies to follow the decision of IBF in dropping advertisements were anti-competitive in violation of sections 3(1) and 3(3) of the Act.

  4. Based on the above averments and allegations, the informant, inter alia, prayed to the Commission to hold that the decision of IBF and the agreements amongst its members to boycott...

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