Bombay HC bars coercive action against Disney, Star, Asianet Star by CCI

In response to an order initiating an investigation against three broadcasters and media and entertainment companies, Asianet Star Communications Pvt Ltd, Disney Broadcasting (India) Pvt Ltd, and Star India Pvt Ltd. (petitioners), the Bombay High Court directed the Competition Commission of India (CCI) not to take any coercive step against them.

The CCI was instructed not to pass any orders in advancement of its inquiry based on a complaint by Asianet Digital Network Pvt Ltd by a bench of Justices Madhav Jamdar and Gautam Patel (ADNPL).

“Until the Court issues further instructions, the CCI is not to issue any more orders on the matter (in which the challenged order was issued). Until the following date, the CCI is not to allow or conduct any coercive acts against the petitioners” as specified in the order. The Court further ordered the petitioners to provide the documentary material requested in response to the enquiries to the Director General of CCI on a no-equity, without prejudice basis.

The Director General was also told that until the next hearing date, he must keep the material he gathered confidential, as required by law. The order was made in writ petitions filed by the three petitioners in response to a CCI order dated February 28, 2022, instructing its Director General to launch an inquiry under Section 26 of the Competition Act based on a complaint by ADNPL.

ADNPL, which distributes TV channels to clients mostly through local cable operators in Kerala, argued in its complaint that broadcasters, like the petitioners, should not have discriminatory pricing in commercial contracts with multi-service operators like ADNPL. The Telecom Regulatory Authority of India (TRAI) and the Telecom Disputes Settlement and Appellate Tribunal were mentioned in the complaint by ADNPL (TDSAT).

In commercial contracts with multi-service operators, the regulations prohibit discriminatory pricing. The petitioners, according to ADNPL, abused their dominant position by providing considerable discounts to a direct competitor through linked arrangements that appeared to offer a payback system.

The petitioners hoped to circumvent the TRAI/TDSAT set-caps or upper limits in order to give ADNPL an unfair competitive advantage. As a result, CCI directed the Director General to launch an inquiry and report within 60 days. The same was taken to the High Court for review.

Star India’s lawyer, Senior Advocate Darius Khambata, argued that the order was unjust and could not be upheld. However, CCI’s lawyer, Somsekhar Sundaresan, objected to the petition on the grounds of jurisdiction, claiming that because the matter arose in Kerala, the challenge should have been brought in a Kerala court.

Senior Advocate Navroz Seervai representing ADNPL echoed Sundaresan’s point and supported the order. He claimed that ADNPL’s only claim was that the petitioners were circumventing the TRAI/TDSAT rules and caused it to suffer prejudice. They both said that CCI’s sole purpose was to gather data.

According to the High Court, CCI, together with the complainant, should be given the opportunity to present their case before the Court. As a result, it set a deadline of June 3, 2022 for the parties to file their affidavits in responses and rejoinders, and set a hearing date of June 8, 2022.


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