CCI slaps Rs 52.24 crore fine against BCCI for abuse of dominant position

MUMBAI: The Competition Commission of India (CCI) has slapped a fine of Rs 52.24 crore against the Board of Control for Cricket India (BCCI) for abuse of dominant position for imposing restrictions on organising professional cricket events.

The commission directed the BCCI to deposit the penalty amount within 60 days of the receipt of this order. The penalty is based on the 4.48% average turnover of BCCI during the last three financial years. The average turnover of the BCCI is Rs 1,164.7 crore for three financial years FY14, FY15 and FY16.

The CCI noted that denial of market access is one of the severest form of abuse of dominant position. It also held that the clause in Indian Premier League (IPL) media rights agreement has been pursued to protect the interest of the broadcast rights holders and the BCCI.

The clause 9.1(c)(i) of its IPL media rights agreement stated that “it shall not organize, sanction, recognize, or support during the Rights period another professional domestic Indian T20 competition that is competitive to the league”.

The director general of CCI also found Rules 28(b) and 28(d) of BCCI Rules to be anticompetitive as the same did not provide scope for any enterprise, other than BCCI or its members, to organise professional domestic cricket league/events in India.

After taking into consideration the submission of BCCI, the DG found the said rules to be in contravention of Section 4(2)(c) of the Act.

The BCCI argued that the commission should take into consideration the following mitigating factors, in case of imposition of penalty: (a) BCCI is a not for profit organization; (b) revenue generated by BCCI, including by way of IPL, is ploughed back to the game of cricket; and (c) there has been no instance where any new entrant has been denied the opportunity to enter the relevant market on account of the impugned clause in the IPL Media Rights Agreement or otherwise.

However, the CCI didn’t find any mitigating factor in the present case.

To address the contravention found in the preceding paragraphs and to remedy the harm flowing therefrom, the Commission directed as under:

(a) BCCI shall cease and desist from indulging into the aforesaid conduct, which is found to be in contravention of the provisions of Section 4(2)(c) read with Section 4(1) of the Act;

(b) BCCI shall not place blanket restriction on organisation of professional domestic cricket league/ events by non-members. This shall, however, not preclude BCCI from stipulating conditions while framing/modifying relevant rules for approval or while granting specific approvals, that are necessary to serve the interest of the sport. Such changes shall entail norms that underpin principles of nondiscrimination and shall be applied in a fair, transparent and equitable manner;

(c) Having done the above, BCCI shall issue appropriate clarification regarding the rules applicable for organisation of professional domestic cricket leagues/ events in India, either by members of BCCI or by third parties, as well as the parameters based on which applications can be made and would be considered. Besides, BCCI shall take all possible measure(s) to ensure that competition is not impeded while preserving the objective of development of cricket in the country; and

(d) BCCI shall file a report to the Commission on the compliance of the aforesaid directions from (a) to (c) within a period of 60 days from the receipt of this order.

Incidentally, the CCI had issued a similar fine against the cricket body in 2013 following a complaint filed by an individual Surinder Singh Barmi.

The BCCI had successfully challenged the fine imposition before the erstwhile Competition Appellate Tribunal (COMPAT), which directed CCI to conduct an investigation afresh into the allegations of abuse of dominant position.

You may be interested