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08 August 2019
On 5 December 2018 the Supreme Court upheld a Bombay High Court decision of 21 September 2017 and finally ended the jurisdictional conflict between the Competition Commission of India (CCI) and the Telecom Regulatory Authority of India (TRAI). By invoking the doctrine of harmonious construction, the Supreme Court balanced the scales and gave the TRAI the power to first determine the rights and obligations of parties, after which – if the TRAI believes that anti-competitive activity has occurred – the CCI's jurisdiction can be invoked.
Writ petitions were filed before the Bombay High Court under Section 26(1) of the Competition Act after the CCI formed a prima facie view of alleged cartelisation between Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd (collectively, the incumbent dominant operators).
The Bombay High Court held that the TRAI has jurisdiction to decide issues regarding contracts, licences, service quality, interconnection agreements and other matters regulated by the TRAI Act 1997 at first instance. Thus, it is only once the TRAI has determined the respective rights and obligations under these licences in accordance with the TRAI Act that the CCI has jurisdiction to investigate anti-competitive practices.
The Supreme Court examined Reliance Jio's argument that the incumbent dominant operators had failed to issue points of interconnection as per the licence conditions, resulting in non-compliance and a failure to ensure technical compatibility (among other things). The court held that the TRAI – being a specialised sectoral regulator with sufficient power to ensure a fair, non-discriminatory and competitive telecoms market – was better suited to decide this issue. The Supreme Court therefore agreed with the Bombay High Court's findings that until the TRAI has decided the jurisdictional issues, the CCI is ill-equipped to proceed in this matter.
However, the Supreme Court did not completely dismiss the CCI's jurisdiction. Rather, it held that since the matter pertains to the telecoms sector, which is specifically regulated by the TRAI Act, balance should be maintained by permitting the TRAI to decide the jurisdictional aspects which it is more competent to handle in the first instance. If the TRAI finds that the incumbent dominant operators engaged in anti-competitive practices, the CCI can then investigate the matter. Therefore, the Supreme Court's decision does not bar the CCI's jurisdiction altogether, but rather delays it until the TRAI has taken the necessary steps at first instance.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email (firstname.lastname@example.org). The Vaish Associates website can be accessed at www.vaishlaw.com.
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