CCI slaps Rs 22.36 cr penalty on Essel Shyam for rigging tenders floated by sportscasters

MUMBAI: The Competition Commission has slapped a Rs 22.36 crore penalty on Essel Shyam Communication, now known as Planetcast Media Services, for rigging tenders floated by sports broadcasters for various sporting events during the period July 2011- May 2012 including Indian Premier League 2012.

CCI took up the case suo motu under Section 19 of the Competition Act, 2002 based on the disclosure by Globecast India and Globecast Asia under Section 46 of the Act read with the Competition Commission of India (Lesser Penalty) Regulations, 2009. No penalty was imposed on Globecast.

Subsequently, Essel Shyam Communication, now Planetcast Media Services, also approached CCI as a lesser penalty applicant during the investigation.

CCI imposed penalty on Globecast, a subsidiary of the Orange Group (earlier France Telecom Group), for indulging in bid-rigging in tenders floated by sports broadcasters for procurement of end-to-end broadcasting services which included ground segment services as well as satellite bandwidth services, for various sporting events during the period July 2011- May 2012 including Indian Premier League 2012.

From the evidence collected in the case, CCI found that the Essel Shyam and Globecast operated a cartel amongst them in the various sporting events held during the years 2011-12 including IPL-2012.

“While submitting bids for the tender floated by various broadcasters during the period July 2011- May 2012 for the provision of end-to-end broadcasting services, they exchanged information and quoted bid prices as per the arrangements arrived at amongst them. As a result, they committed an infringement of the provisions of Section 3(3)(d) read with Section 3(1) of the Act during this period,” the CCI said in its order.

Considering contravention of provisions of the Act by Globecast and Essel Shyam, an amount of Rs 31. 94 crore and Rs 1.33 crore was computed as a leviable penalty on Essel Shyam and Globecast, respectively, in terms of proviso to Section 27 (b) of the Act.

While computing leviable penalty, CCI took into consideration all relevant factors including duration of the cartel, mitigating factors, etc. and decided to levy penalty at the rate of 1.5 times of their profit for during the period July 2011 – May 2012.

Additionally, considering the totality of facts and circumstances of the case, penalty leviable on individual officials of Globecast and ESCL was computed at the rate of 10 percent of the average of their income for preceding three years.

Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided by the evidences furnished by the lesser penalty applicants in establishing the existence of cartel, CCI granted Globecast and its individuals 100% reduction in the penalty and 30% reduction in penalty to Essel Shyam and its individuals.

Pursuant to reduction, a penalty imposed on Essel Shyam was Rs 22.36 crore.

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