Case Summary: Samir Agrawal v. Competition Commission of India (2020) | Anti-Competitive Agreements

The Supreme Court’s decision in Samir Agrawal v. Competition Commission of India (2020) addressed pivotal issues under the Competition Act, 2002—primarily concerning the locus standi of informants and the legality of algorithmic pricing by app-based taxi services like Ola and Uber.

Title of Case: Samir Agrawal v. Competition Commission of India & Ors.

Court: Supreme Court of India

Citation: Civil Appeal No. 3100 of 2020

Date of Judgment: 15 December 2020

Factual Background

The appellant, Samir Agrawal, an independent legal practitioner, filed an information under Section 19(1)(a) of the Competition Act, 2002 before the Competition Commission of India (CCI) in August 2018. He alleged that:

• ANI Technologies Pvt. Ltd. (Ola) and Uber India Systems Pvt. Ltd., Uber B.V., and Uber Technologies Inc. (Uber) were operating through a pricing algorithm that fixed fares for rides.
• These algorithms restricted drivers and riders from negotiating prices, and thereby removed competition.
• This practice amounted to price-fixing under Section 3(1) read with Section 3(3)(a) and resale price maintenance under Section 3(4)(e) of the Act.
• The algorithmic pricing created a hub-and-spoke cartel, where Ola and Uber acted as hubs, facilitating coordinated pricing among independent drivers (the spokes).

Issues

The case revolved around the following legal issues:

1. Whether the locus standi of the informant was valid under the Competition Act, 2002?

2. Whether the algorithm-based pricing by Ola and Uber amounted to:

• Price-fixing or concerted practices under Section 3(3)(a)?
• Resale price maintenance under Section 3(4)(e)?
• Hub-and-spoke cartelisation?

3. Whether the dismissal of the case by CCI under Section 26(2) was correct in law?

Petitioner’s Arguments

The petitioner contended that:

• Ola and Uber’s algorithms determined prices uniformly, eliminating price competition between drivers.
• Despite being independent contractors, drivers had no say in determining prices and had to accept algorithmic rates.
• The platforms created an artificial collusion, akin to a trade association, thus violating the prohibition against cartels.
• The pricing system further resulted in price discrimination, as fares varied based on customers’ willingness to pay, violating the principle of fair pricing.
• The NCLAT’s narrow reading of locus standi under Section 19 undermined the public interest purpose of the Competition Act.

CCI’s Findings (Order dated 06.11.2018)

The CCI dismissed the information under Section 26(2), making the following key findings:

• The informant had not alleged collusion between Ola and Uber, but only between drivers facilitated by their respective platforms.
• The hub-and-spoke arrangement typically involves an exchange of sensitive price information among competitors through a central hub, which was absent here.
• Dynamic pricing algorithms factored in large datasets (time, location, demand, traffic) and did not reflect a predetermined cartel price.
• No evidence showed a “meeting of minds” between drivers or between drivers and platforms.
• Resale price maintenance under Section 3(4)(e) was not made out, as drivers were not resellers, and Ola/Uber did not set a fixed floor price.
• Price discrimination was irrelevant since the informant did not allege dominance, and Section 4 on abuse of dominance had not been invoked.

NCLAT’s Judgment (Dated 29.05.2020)

The NCLAT dismissed the appeal, holding:

• The informant lacked locus standi as he failed to show any legal injury, personal impact, or consumer status.
• The Competition Act contemplates complaints only from aggrieved persons or those with legal interest, not general public or busybodies.
• Even on merits, no collusion was evident. Drivers used platforms independently and had no communication among themselves.
• The foreign precedent of Spencer Meyer v. Travis Kalanick (U.S. Class Action) could not be imported into Indian law.
• Both Ola and Uber operated independently, and drivers had the freedom to use multiple apps or offer offline services.
• There was no dominant position to allege abuse under Section 4.

Supreme Court’s Analysis

1. Locus Standi and Informant’s Right to Appeal

• The Supreme Court rejected NCLAT’s narrow view and held that any person could provide information under Section 19(1)(a).
• The 2007 amendment replaced “complaint” with “information”, thereby broadening access to the CCI beyond only aggrieved parties.

The Court clarified that:

• Proceedings under the Competition Act are actions in rem, affecting the public at large.
• A person submitting information is not required to have suffered personal or legal injury.
• The Court noted that the Act punishes mala fide or false information (Section 45), which acts as a safeguard against abuse.

2. Right to Appeal as a “Person Aggrieved”

• The Court held that “person aggrieved” under Section 53B must be construed liberally in light of the public interest aim of the Act.
• Since the information was dismissed by the CCI, the informant (Samir Agrawal) was indeed aggrieved by that decision.

Findings on Merits

The Supreme Court upheld the CCI and NCLAT’s findings:

• No evidence of cartelisation: There was no agreement or concerted practice between drivers.
• Algorithmic pricing alone is not proof of collusion. The absence of communication between drivers eliminates the “meeting of minds” required for cartel formation.
• The hub-and-spoke model could not be applied, as the drivers were unaware of each other’s fares, and Ola/Uber acted as principals, not passive hubs.
• Drivers could accept or reject rides, and had the freedom to choose other platforms.
• There was no resale price maintenance, as drivers did not buy and resell services.
• The informant’s claims of price discrimination were also misplaced in the absence of allegations of dominance.

Precedent Analysis

The Court referred to Competition Commission of India v. Steel Authority of India (2010) to reiterate that:

1. A decision under Section 26(2) is appealable as it is a final determination rejecting the information.
2. Informants have a right to be heard and represented before the Tribunal.

The Court distinguished Adi Pherozshah Gandhi v. H.M. Seervai (1970), which interpreted “person aggrieved” narrowly under the Advocates Act, as it dealt with action in personam, unlike the public interest actions under the Competition Act.

Final Verdict

The Supreme Court allowed the appeal on the question of locus standi, holding that:

• Any person, including Samir Agrawal, had the right to inform the CCI and appeal a rejection.
• The NCLAT erred in limiting the right to only those with a personal grievance.
• However, on the merits, the Court dismissed the appeal, agreeing with the CCI and NCLAT that:
• There was no contravention of Section 3 of the Competition Act.
• Ola and Uber did not facilitate a cartel, and algorithmic pricing alone does not prove collusion.

Significance of the Judgment

This case reaffirms the public interest nature of competition law enforcement in India.

• It clarifies the broad standing of informants to initiate proceedings under the Competition Act.
• It sets an important precedent on the limits of algorithmic pricing and how technological platforms are evaluated under Indian competition law.
• It upholds procedural safeguards by allowing appeals by informants, thus strengthening regulatory accountability.

Click Here to Read the Official Judgment

Important Link

Law Library: Notes and Study Material for LLB, LLM, Judiciary, and Entrance Exams