Sat. Sep 19th, 2020

Interim injunction application against OLA Cab in alleged predatory pricing case, rejected

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Competition Commission of India:   Whilst OLA Cab (of ANI Technologies) is under
the scanner of the fair play watchdog and undergoing an investigation by the
Director General of Investigation (“DG”) for alleged abuse of dominant position;
the Commission has rejected the plea of the informant for interim relief.  The Commission on 24-04-2015 had found a prima facia case against OLA for indulging into predatory pricing to  oust other players in the relevant market of “Radio
taxi services in the city of Bengaluru” and had order for investigation.

The informant   Fast Track Call Cab
sought an temporary injunction against OLA to restrain
from indulging in alleged practice of predatory pricing on the ground that
unfair practices of OLA Cab (“opposite party”) will cause irreparable lose to
the informant and adverse effect on competition in the market.   Informant contended that the OLA after having
received funds of about $250 Million from Soft Bank, Japan in March, 2014
unleashed an onslaught of anti-competitive practices resulting in large scale
erosion of market share of the Informant.  

The majority of
the Commission (5:1) ruled that simply because the Informant has a prima
faciecase, by itself will not entitle him to the grant of interim relief,
unless, he satisfies that there is irreparable loss and injury to him and that
the balance of convenience also lies in his favour. It found that the existence
of the second element, i.e., irreparable loss to the Informant or
definite apprehension of adverse effect on competition in the market has also
not been satisfied. Further balance of convenience also is not lie in the
informant because figures submitted by him cannot be relied upon further unless
the same are verified by the DG in its investigation. For the reasons and
pending investigation, the Commission was not convinced that any interim relief
is required to be granted in this case.

However, one
member in his dissenting note after a thorough market analysis observed that
the market conditions in the present case were conducive for a credible
predatory strategy. He observed that the particular urgency for an order of
restraint in the present case arises from the fact that the OLA has continued
to pursue its loss-entailing price-incentive scheme in the relevant market even
after the order of the Commission for initiation of investigation.  He found that the market performance of OLA
based on its deep pocket and predatory strategy is an imminent danger for the
Informant and the competition, thus there is an urgent need to stop the
Opposite Party on its tracks. [Fast Track
Call Cab Private Ltd v. ANI
Technologies Pvt. Ltd,  Order on 03.09.2015]
Source: Legal news India

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