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After marathon arguments spanning over three days, the Kerala High Court on Tuesday reserved its order on broadcasters’ plea challenging a CCI probe on jurisdictional grounds, which was ordered for alleged abuse of dominant position by broadcasters in offering discounts to select Multi System Operators (MSOs).
In the resumed hearing on Tuesday before the Kerala High Court, Mukul Rohtagi, Senior counsel appearing on behalf of the broadcasters (Star, Disney and Asianet) contended that the Competition Commission of India (CCI) has no jurisdiction in the matter in light of the Supreme Court decision in the Bharti Airtel case and further argued that marketing agreements between MSOs and broadcasters fell squarely within the purview of TRAI.
The submissions of broadcasters on the jurisdictional issue were vehemently countered by N. Venkataraman, additional solicitor general of India, who represented CCI. Venkataraman pointed out that the ruling referred to by the broadcasters has no application as TRAI was not seized of the issue when CCI initiated the probe.
It may be recalled that Star India Pvt Ltd (SIPL) along with its group and subsidiary companies (Disney/ Asianet Star), had on September 19 approached the Kerala High Court challenging a probe initiated by CCI for alleged abuse of dominant position by offering discounts to a select MSO.
The CCI probe was earlier ordered on the basis ofinformation filed by Asianet Digital Network (P) Ltd. (ADNPL) - an MSO engaged in the business of providing digital TV services - predominantly in Kerala.
The main thrust of the allegations was that by offering additional discounts to select MSOs and the main competitor of ADNPL in Kerala viz. Kerala Communicators Cable Ltd (KCCL), Star India Pvt Ltd (SIPL) has placed MSOs such as ADNPL at a huge disadvantage, which was detrimental to competitors, resulting in distortion of the level playing field in the market place, besides hindering the ability of players to compete in an effective manner.
CCI prima facie found Star India a dominant player in the broadcasting services market in Kerala, owing to its exclusive content, significant market share, size and economic resources and countervailing power, thus making access to its TV channels indispensable for MSO.
The competition watchdog had also observed that the alleged discriminatory conduct of price discrimination among different MSOs of SIPL has resulted in significant loss in ADNPL’s consumer base.
Accordingly, CCI earlier this year (February, 2022) ordered its arm (Office of the Director General/ DG) to investigate the matter and submit its report.
Aggrieved by the CCI order, SIPL, Asianet and Disney preferred separate writs before the Bombay High Court challenging the order on the ground that CCI lacked subject matter jurisdiction as the issue of pricing of channels by broadcasters fell within the framework of the broadcasting regulator -- TRAI.
The Bombay High Court, however, declined to entertain the writ petitions challenging the CCI order directing investigation, due to lack of territorial jurisdiction.
As a result, the broadcasters (Star, Disney and Asianet Star) approached the Kerala High Court on September 19.
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