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2013 (1) TMI 532 - COMPETITION APPELLATE TRIBUNALCompetition Act – termination of commission payable to agents by the Airlines - appellant were travel agents to whom foreign airlines used to pay commission on sale of tickets - airlines discontinued commission by forming a cartel and were abusing their dominant position - Competition Commission of India rejected the argument of the informant that on a particular route, a particular airlines operating thereupon should be the relevant market - Whether foreign airlines had abused their dominant position in terminating commission payable to travel agents ? – Held that:- CCI has rightly observed that as long as the consumer is transported to his ultimate destination, the route taken hardly matters. The airlines which provide international flight services to the consumers of India for travel to various destinations outside India and those routes are not necessarily fixed. The CCI had rightly observed that these routes are substitutable. The selection by the consumer for a particular airline would be on the basis of various factors namely the timing, quality of service and also air fare charged by the airlines. It is not necessary that the route taken by one airlines operating would be the same in case of other Airline operating on that route. It could be via some other city. It will make no difference to the consumer so long as airline reaches the consumer to his destination. Therefore, it would be wrong to hold one route as the relevant market for that particular airlines. CCI is right in holding that the relevant market for the respondents was the international routes reaching from and to India from the foreign destinations and not a particular route of being operated by a particular airline. Director General had concluded on the basis of his investigation that it was not proved that foreign airlines hold about 90 per cent market share in the relevant market of international flying to and fro from India. The appellant was unable to give any specific statistics before the CCI or even before the Court. On the other hand, from the documents on record, it is clear that none of the nine foreign airlines has substantial market share in the relevant market of international flight services in India. Thus Director General referring to the information available to the DGCA has come to the conclusion that individually none of the opposite parties has a market share of more than 5 per cent or 6 per cent of the International traffic. Again as per the study conducted by the CAPA most of the opposite parties do not have any meaningful share in the international flying market based on the seat strength. Therefore, the CCI has committed no error in coming to the conclusion that individually speaking none of the opponent could be said to be in a dominant position. Joint decision to terminate the commission system is not accepted as individual foreign airlines cannot be clubbed together and held to be enterprise. They are all independent companies. There is no evidence of enmity of these airlines with the travelling agents nor is there any support to suggest that there was any meeting of minds among them. There was no joint decision to terminate the commission system as there is no agreement spelling out a cartel or any meetings of mind between these independently operating foreign airlines. The decision by these airlines was an independent decision and as such there could be no question of violation of section 3(3). There is no evidence that the travel agents have suffered. On the other hand in the line of world trend, the system has been substituted with Net Fare Model all over the world and not only in India.
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