We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
31 January 2019
By way of an 11 July 2018 order, the Competition Commission of India (CCI) imposed a penalty of Rs223.6 million on Essel Shyam Communication Limited (ESCL) for bid rigging in tenders floated by sports broadcasters, including those for the 2012 Indian Premier League.
The CCI ultimately reduced the fine imposed on ESCL and its officials under the leniency provisions contained in the Competition Act 2002. This is the fourth order that the CCI has issued under these provisions.
The CCI's investigation was initiated based on disclosures by Globecast India Private Limited and Globecast Asia Private Limited (collectively, Globecast) under Section 46 of the Competition Act, read with the CCI (Lesser Penalty) Regulations. Subsequently, during the director general's investigation, ESCL – now Planetcast Media Services Limited – approached the CCI.
The informants disclosed that ESCL and Globecast had exchanged commercial and confidential price-sensitive information through Bharat K Prem, an employee of Globecast India Private Limited Pvt Ltd. This disclosure had resulted in the bid rigging of tenders for the provision of end-to-end broadcasting services for various sporting events, particularly during 2011 and 2012.
It was alleged that Prem had clandestinely entered into a consultancy agreement with ESCL, under which Prem had agreed to work for ESCL for a fixed renumeration rate and a share in the profits from contracts obtained through the bid rigging.
Based on the director general's evidence, the CCI found that ESCL and Globecast had operated as a cartel during 14 sporting events held between 2011 and 2012, including the 2012 Indian Premier League.
While submitting bids for the tender floated by various broadcasters between July 2011 and May 2012, ESCL and Globecast had exchanged information and quoted bid prices. Accordingly, the CCI held that the companies had infringed Section 3(3)(d), read with Section 3(1), of the Competition Act during the aforementioned period.
The CCI ultimately fined ESCL and Globecast Rs319.4 million and Rs13.3 million, respectively, based on the proviso to Section 27(b) of the act. While issuing these fines, the CCI considered, among other factors, the cartel's duration and all mitigating factors, ultimately deciding to levy a penalty at the rate of 1.5 times the companies' respective profits between July 2011 and May 2012. Further, the CCI fined individual officials from ESCL and Globecast 10% of their average incomes for the three preceding years.
When reviewing the parties' lesser penalty application, the CCI considered when the application had been filed and the applicants' cooperation and willingness to provide evidence regarding the cartel. Based on these considerations, the CCI granted Globecast and its officials a 100% reduction in their overall penalty. Further, ESCL and its officials were granted a 30% reduction in their overall penalty. Pursuant to this reduction, ESCL was fined Rs223.6 million.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email (email@example.com). The Vaish Associates website can be accessed at www.vaishlaw.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.