Telangana High Court on Monday reserved order on a writ petition filed by GMR challenging CCI order directing probe against it for alleged abuse of market power, on a complaint filed by an aircraft Maintenance, Repair and Overhaul (MRO) service provider Air Works.
Earlier, on an information filed by Air Works (MRO), Competition Commission of India (CCI) passed an order in October 2019 finding GMR to have prima facie contravened the provisions of Competition Act, 2002 which prohibit abuse of dominant position.
Accordingly, CCI had directed for a detailed probe by its investigation arm (Director General/ DG) into alleged abuse of dominant position and denial of market access by GMR Hyderabad International Airport Ltd (GHIAL), part of GMR Group, that operates Rajiv Gandhi International Airport(RGIA) in Hyderabad.
GMR challenged CCI order before Telangana High Court and obtained interim stay on the probe in 2019.
The MRO in its complaint before CCI pointed out that pursuant to a Concession Agreement, GMR has the exclusive rights to maintain, manage and operate the RGIA which enabled it to use its discretion in respect of provision of services by third-parties at RGIA.
GMR entered into agreements to give space to business entities desirous of operating from the airport premises. Air works is one of the third-party service providers providing MRO services at RGIA.
Complaint
Air Works in its complaint before CCI levelled various allegations pertaining to abuse of dominance by GMR which included: denial of market access by refusing to renew the license and by withholding access to the premises at the airport causing impediments to provide Line Maintenance Services; leveraging its dominant position in the upstream market (provision of access to airport facilities/premises) and indulging in exclusionary practices and restricting provision of services in the downstream market (provisioning of Line Maintenance Services/ MRO services) thereby eliminating competition; by ousting Air Works from providing Line Maintenance Services at RGIA andthereby limiting and restricting provision of services, adversely affecting competition in the marke; creating a monopolistic environment which would enable GMR Aero Technic Limited/ GAT (a group company of GMR Group, which it wanted to promote) to operate on its own terms and conditions without being affected by any competition and charge exorbitant charges from the customers (Airlines) thereby increasing the cost to end customers.
Inquiry
While ordering investigation, CCI noted in its order that “…the facts of the present case prima facie suggest denial of market access to the Informant coupled with exclusionary motive by GMR to favour its own group entity (i.e. GAT). Owing to its dominance in the upstream market and its presence in the downstream market, GMR seems to have distorted the level playing field” and added that the case seems to pose a greater competition concern given the presence of competitive relationship between GMR (through GAT) and Air Works in the downstream market.
As such, CCI noted that case warranted a detailed probe and directed the DG to investigate into the matter.