Fair trade regulator, Competition Commission of India (CCI) has rejected the complaint made by Bharti Airtel's against new entrant Reliance Jio of "predatory pricing".
Airtel had filed the case against Reliance Jio in February in which the company said that free services offered by the company since its launch amounted to predatory pricing. The former also said Reliance Industries (RIL) has allegedly used its financial strength in other markets to enter into the telecom market through Jio.
However fair trade regulator said that in the absence of any dominant position being enjoyed by Jio in the relevant market, the question of examining the alleged abuse does not arise and notwithstanding this, the offers of the company do not appear to raise any competition.
The Commission also notes that providing free services cannot by itself raise competition concerns unless the same is offered by a dominant enterprise and shown to be tainted with an anti-competitive objective of excluding competition/ competitors, which does not seem to be the case in the instant matter as the relevant market is characterised by the presence of entrenched players with sustained business presence and financial strength. In a competitive market scenario, where there are already big players operating in the market, it would not be anticompetitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes. Such short-term business strategy of an entrant to penetrate the market and establish identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation under the Act.
In view of the foregoing discussion, the Commission is of the considered view that no prima facie case of is made out against Jio.
To recall the fair trade regulator Competition Commission of India ( CCI) has finally directed its investigation team to complete the probe against incumbents telcos in 60 days for denying network connectivity to newcomer Reliance Jio.
The DG is directed to complete the investigation and submit investigation report within a period of 60 days," the CCI said in its 30-page order. The CCI said that the incumbent telecom operators (or ITOs) appeared to have entered into an agreement among themselves, through the platform of COAI, to deny Point of Interconnect - or network connectivity - to Reliance Jio.
"Having been prima facie convinced that the impugned conduct is an outcome of anti-competitive agreement against the ITOs, Commission does not find it appropriate to consider the same impugned conduct as unilateral action by each of the ITOs," it said. The order also pointed out on the role Cellular Operators Association of India and says that it has facilitated the joint conduct of the incumbent operators to collectively decide to prevent the successful entry of Jio in the telecom sector.