20 Oct 2017
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TRAI has no jurisdiction over competition-related issues: CCI

MUMBAI: In a move that could jeopardise the Telecom Regulatory Authority India’s (TRAI) efforts to frame regulations impacting competition in the broadcast sector, the Competition Commission of India (CCI) has urged the Ministry of Corporate Affairs (MCA) to prevent the broadcast sector regulator from going ahead with its consultation papers on issues like cross-media ownership, cable monopoly and cartelisation by content aggregators.

In its letter to the MCA, the CCI said that “a perusal of the consultation paper issued by TRAI on these subjects will create a parallel and conflicting competition regime for the media/broadcasting sector without any enabling legislative mandate in this behalf.”

CCI has, therefore, requested that the matter may be taken up with the Ministry of Information and Broadcasting “with a request to ask the TRAI to put on hold the said consultation papers till necessary changes/modifications are made in order to avoid any jurisdictional overlap and potential conflict in future.”

The CCI’s stance on the issue will only strengthen the arguments made by broadcasters, content aggregators, vertically linked multi-system operators (MSOs) and direct-to-home (DTH) operators who had questioned TRAI’s jurisdiction on issues like cross-media ownership, cartelisation by content aggregators and abuse of dominant position by MSOs. In fact, in their submissions made to the TRAI, all four stakeholders had contended that the CCI was the competent authority to look into issues of monopoly and anti-competitive practices.

The consultation papers, the CCI said, delineated the substantive limits where TRAI might inquire into the anti-competitive agreements, abuse of dominant position and combinations. “This is a broad replica of Chapter II of the Competition Act, with some variations and addition of new concepts,” the CCI contended.

The anti-competition watchdog also affirmed that “it was the only agency invested with powers to deal effectively with the anti-competitive practices adopted by entities across sectors including media and broadcasting sector”.

The CCI said that the implementation of the consultation papers “may give rise to different divergent results emanating from the same set of cause of action if the CCI is also seized of the matter”.

Allowing TRAI the power to look into competition-related issues would lead to chaos in the regulatory cosmos besides exposing contravening parties to two parallel and different jurisdictions. If the TRAI consultation papers were allowed, then other sector regulators might follow suit, thus threatening the very existence of the CCI, the letter stated.

The CCI also pointed out that there was no settlement mechanism in place to resolve inter-regulatory conflicts. It maintained that TRAI could refer cases to the CCI under section 21 of the Competition Act, 2002. Similarly, the CCI could also make references to the sector regulators under section 21 A.

While acknowledging that various laws had been enacted to provide sector-specific regulatory bodies the authority to promote competition and protect the interests of the consumers, the CCI said that “the sector-specific laws do not have the framework that would enable them to determine whether or not there has been violation of competition law”.

CCI also pointed out that the Group of Ministers (GoM) looking into the changes required in the Competition Act had not endorsed amendments to the Banking Regulation Act, 1949 that proposed to take the banking sector out of the purview of the CCI.

The content of the CCI letter has not gone down well with players who are not vertically linked. “A bizarre situation has emerged with the anti-competition watchdog asking the broadcast sector regulator to stay away from areas that are concerning the media industry. TRAI is not trespassing into the territory of the CCI if it wants to have regulatory policies that prevent imperfect competition in the system,” says the head of a multi-system operator (MSO) on condition of anonymity.

A divergent view is expressed by the head of a television broadcasting company. “TRAI should free itself from areas where the CCI can step in. The CCI has been set up to look into anti-competitive practices,” he says.

Also read:

TRAI issues consultation paper on cross-media ownership
Trai looks to crack the whip on monopoly in cable TV
TV channel distributors under TRAI lens
MSOs not to hold more than 50% market share in a state; M&A needs TRAI nod