Competition Law: CCI penalises the BCCI for ‘Anti-Competitive Practices’

In November 2017, the Competition Commission of India (CCI) imposed a fine of Rs 52.24 crore on the Board of Control for Cricket in India (BCCI) for purportedly indulging in “anti-competitive practices”.

In the instant matter, the CCI had passed an order dated February 8, 2013, wherein the conduct of the BCCI was found to be in contravention of the provisions of Section 4 of the Competition Act, 2002 (the “Act”). The CCI found the BCCI dominant in the market for organization of private professional cricket leagues/events in India. In particular, the representation provided by the BCCI under clause 9.1(c)(i) of its IPL Media Rights Agreement with erstwhile rights-holder Multi Screen Media Pvt. Ltd., that “it shall not organize, sanction, recognize, or support during the Rights period another professional domestic Indian T20 competition that is competitive to the league for a sustained period of ten years” was found to be an exercise of the BCCI’s regulatory powers for arriving at a commercial agreement.

 Accordingly, this conduct of the BCCI was found to be in contravention of the provisions of Section 4(1) read with Section 4(2)(c) of the Act which clearly establishes that ‘there shall be no abuse of dominant position by any enterprise, by directly or indirectly imposing unfair or discriminatory conditions/restrictions, or indulging in practice(s) resulting in denial of market access’. Aggrieved by the above order of the CCI, the BCCI had preferred an appeal and the aforesaid order was set aside on the ground of violation of principles of natural justice and was remitted to the CCI for fresh disposal.

Upon considering the matter, the CCI conducted further investigation. Based on the nature of activities performed, the BCCI was held as an ‘enterprise’ within the meaning of section 2(h) and thus, would come under the purview of the Act. While recognising the role of sports federations in taking measures to serve the integrity or development of the sport, the CCI held that the impugned restriction had no nexus to the legitimate interest of cricket in the country. Rather, the restriction was pursued to enhance the commercial interest of the bidders of IPL broadcasting rights and the consideration in turn received by the BCCI. Therefore, it was held to be in contravention of Section 4(1) read with Section 4(2)(c) of the Act. The CCI also found the rules 28(b) and 28(d) of the BCCI Rules to be anti-competitive as the same did not provide scope for any enterprise, other than BCCI or its members, to organize professional domestic cricket league/events in India.

The CCI has further directed the BCCI to (i) cease and desist from indulging in conduct that is found to be in contravention of Section 4 of the Act; (ii) not place blanket restriction on organisation of professional domestic cricket league/events by non-members and entail norms that underpin principles of non-discrimination and be applied in a fair, transparent and equitable manner; (iii) issue appropriate clarification regarding the rules applicable for organisation of professional domestic cricket leagues/events in India, either by members of BCCI or by third parties, as well as the parameters based on which applications can be made and would be considered; and (iv) ensure that competition is not impeded while preserving the objective of development of cricket in the country.

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