The latest verdict of Competition Commission of India rejecting Bharti Airtel’s accusation that Reliance Jio was using anti-competitive practices to woo customers holds significance in the current situation in the mobile market which is witnessing cut-throat competition…

NEW DELHI, JUNE 9, 2017: In a major verdict in the ongoing tussle between Bharti Airtel and Reliance Jio, the Competition Commission of India (CCI) has rejected the incumbent’s complaint where it had accused the new entrant and the parent company — Reliance Industries Ltd — for using anti-competitive practices, and ruled that Reliance Jio’s free services were not against legal provisions.

Ruling that no case could be made out against the Mukesh Ambani-led company, the fair trade regulator ruled that Bharti Airtel has made “contradictory submissions of the impugned free services” of Reliance Jio as being an outcome of leverage of dominant position by parent Reliance Industries as well as an outcome of alleged anti-competitive agreement between the two group firms.

In its 17-page order, CCI said Bharti Airtel failed to give any plausible explanation as to how Reliance Jio’s free services were an outcome of unilateral conduct of Reliance Industries as well as an anti-competitive agreement between RIL and Jio. Jio’s conduct “has not been found as prima facie contravening the provisions of the (Competition) Act prohibiting unfair pricing including predatory pricing,” it said.

The order comes at a time when the CCI is already conducting a detailed probe into the conduct of incumbent operators, Bharti Airtel, Vodafone India and Idea Cellular, for allegedly forming a cartel against Reliance Jio.

CCI said in the absence of any finding of anti-competitive conduct by Jio, its parent RIL cannot be held to be in contravention of the competition laws just because it has made huge investments in its telecom venture.  “Such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation under the Act,” it ruled.

“Mere investments cannot be regarded as leverage of dominant position, particularly when RIL itself is not engaged in business of providing telecom services or any activities incidental thereto. If one were to construe such investment as anti-competitive, the same would deter entry and/or expansion and limit the growth of markets,” CCI said.

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