Case No. 74 of 2012. Case: Indian Exhibition Industry Association Vs Ministry of Commerce & Industry and Indian Trade Promotion Organization. Competition Commision of India
|Case Number:||Case No. 74 of 2012|
|Party Name:||Indian Exhibition Industry Association Vs Ministry of Commerce & Industry and Indian Trade Promotion Organization|
|Counsel:||For Appellant: Shri Muneesh Malhotra, Advocate, Shri Achin Mittal, Advocate, Shri Vikram V. Minhas, Advocate and Brig. (Retd.) and Raj K. Manchanda (ED, IEIA) and For Respondents: Shri Malay Shrivastava (ED, ITPO), Shri R.K. Singh (GM, ITPO), Shri D.K. Jain (Dy. GM, ITPO), Shri Hitesh Sethi (Manager, ITPO), Shri B.N. Gupta (Manager, ITPO), Shri...|
|Judges:||Ashok Chawla, Chairperson, H.C. Gupta, Member (G), R. Prasad, Member (R), P.N. Parashar, Member (P), Dr. Geeta Gouri, Member (GG), Anurag Goel, Member (AG), M.L. Tayal, Member (T) and Shiv Narayan Dhingra, Member (D)|
|Issue:||Companies Act, 1956 - Section 25; Competition Act, 2002 - Sections (4)(2)(a)(i), 19(1)(a), 19(4), 2(h), 2(s), 2(t), 26(1), 27, 4, 4(1), 4(2)(a)(i), 4(2)(b)(i), 4(2)(c), 4(2)(e)|
|Judgement Date:||April 03, 2014|
|Court:||Competition Commision of India|
Order under Section 27 of the Competition Act, 2002
The present information under section 19(1)(a) of the Competition Act, 2002 ('the Act') was filed by Indian Exhibition Industry Association ('the informant') against Ministry of Commerce & Industry ('OP 1') and Indian Trade Promotion Organization ('OP 2'/ITPO) alleging inter alia contravention of the provisions of section 4 of the Act. The Commission after considering the entire material available on record vide its order dated 06.05.2013 passed under section 26(1) of the Act, directing the DG to cause an investigation to be made into the matter and to submit a report.
Brief facts of the Case
The informant is an association of exhibition organizers /venue owners/ service providers, registered under the Societies Registration Act, 1860 with the objectives of inter alia promoting development of Trade Fairs & Exhibition Industry and to support its orderly growth.
OP 1 is responsible for development of trade, commerce and industries in the country. OP 2 is a company registered under section 25 of the Companies Act, 1956 and is stated to be wholly owned by the Government of India which has administrative control over it. It is further stated that the main object for creating ITPO was to promote, organize and participate in industrial trade fairs and exhibitions in India or abroad and to take all the measures incidental thereto and to organize, undertake and publicize tradeshows and fair exhibitions depots in India as well as abroad and to undertake promotion of export to explore new market for traditional items of export etc.
Briefly, the informant is aggrieved by the alleged time gap restriction imposed by OP 2 between two exhibitions/fairs. As per the informant, OP 1 issued a letter dated 27.02.2003 to OP 2 stating therein that the time gap restrictions prescribed in the guidelines issued by OP 2 for Licensing of Exhibition Space & Facilities in Pragati Maidan ('the Guidelines') should be lifted to make the system transparent and afford greater freedom to the organizers to hold exhibitions/fairs in a manner which promotes the business interests. Accordingly, OP 2 intimated OP 1 vide its letter dated 28.03.2003 that the Guidelines have been amended to drop the 'time gap restriction' between two exhibitions/fairs irrespective of where the exhibitions/fairs are held.
However, in 2006, OP 2 re-formulated the said Guidelines and added clause 6.2 therein which imposed a 'time gap restriction' of 15 days between two events having similar product profiles/coverage and in case of ITPO fairs, 90 days before start or 45 days after the close of an ITPO show. The Guidelines were re-considered in October, 2007 wherein a gap of 15 days between two events having similar product profiles/coverage was maintained whereas in case of ITPO and third party fairs having similar product profiles, a gap of 90 days before ITPO's show and 45 days after ITPO's show was imposed.
In 2011, OP 2 further amended the said 'time gap restriction' and revised the same to 90 days before and after the fair in case of ITPO fairs and third party fairs having similar product profiles.
Highlighting the above amendments as arbitrary and discriminatory, the informant alleged that OP 2 adversely affected the established exhibitions of other players in the market by scheduling its own unrecognized exhibitions and refusing the permission to other players on the pretext of arbitrary time gap restrictions. It was further alleged that OP 2 would announce its exhibitions and later cancel them causing loss to OP 2 as well as the industry as a whole. Lastly, it was alleged that in addition to these abuses, exhibitors were also forced by the ITPO to avail certain services which were not required by them but were imposed by OP 2 by way of unreasonable and arbitrary conditions in the agreement.
Based on the above averments and allegations, the informant alleged abuse of dominant position by OP 2 by virtue of playing a dual role as a regulator as well as the organiser of exhibitions which, as per the informant, led to the contravention of section 4 of the Act.
The Director General ('the DG'), after receiving the directions from the Commission, investigated the matter and submitted the investigation report on 14.02.2014. On investigation, the DG found OP 2 to be a dominant entity in the relevant market of 'provision of venue for international and national trade fairs and exhibitions in Delhi'. It was observed that various competition concerns emerge due to the conflict of interest on account of OP 2 being an event organizer at Pragati Maidan as well as the entity which decides the applications and makes rules for leasing space at Pragati Maidan to third parties, who compete with OP 2 as event organizers. The DG found that from time to time, OP 2 had amended the time gap restrictions between two similar profile events at Pragati Maidan which were much more stringent for third party events as compared to OP 2's own events.
Noting that there may be an economic rationale for time gap restrictions like confusion between events, free riding concerns etc., the DG opined that the same was not per se unfair. However, since the restrictions were discriminatory and more stringent for third party events as compared to OP 2's own events, the DG concluded contravention of the provisions of section 4(1) read with section (4)(2)(a)(i) of the Act. Further, it was noted that in the year 2011, OP 2 shifted its own event (IISE) into the period traditionally reserved for other competing events (Smart Expo, IIFEC). As such, the DG was satisfied that OP 2 discriminated against third party organizers by altering the time gap restriction guidelines, rescheduling its own events and delaying the confirmation of...
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