Predation through Judicial process-An increasing threat to Competition #indianlaws

Competition Commission formed a prima facie opinion that JCB by abusing their dominant position in the relevant market sought to stifle competition in the relevant market

Informant, a SSI Company manufacturing low cost backhoe loaders called ‘Bull Smart’, a light construction equipment brought the present action on the ground that the bad faith litigation initiated by JCB (the Opposite Party) against it alleging infringement of its design rights was totally false and the above said legal proceedings before the Delhi High Court were initiated only to harass it and prevent the launch of product of the Informant which in effect would have competed with backhoe loaders of JCB in the relevant market.

Informant alleged that on the day its product was due for launch in an exhibition, it was served with ex-parte interim injunction order passed by the Delhi High Court in a Civil Suit filed by the Opposite Party (JCB) alleging that Informant had infringed the design registrations/ copyright in developing the backhoe loader and accordingly as per the order Informant and its dealers were restrained from making, selling, offering for sale, dispatch, advertising, directly or indirectly dealing in/ launching backhoe loaders in any manner. The Informant then moved an application praying for vacation of the ex-parte interim order alleging that JCB had obtained the said order by misrepresenting and suppressing the true images and facts and by relying upon fraudulent design registrations which were pre-existing in the public domain and surprisingly after about 10 months, the application seeking ex-parte interim injunction was withdrawn by JCB, however by that time the Informant had already suffered huge irreparable damages.

Informant in the proceedings before Competition Commission sought Commission to direct JCB to cease and desist from misusing or abusing judicial process to exclude competitors and all other anti-competitive activity besides subjecting JCB to penalty for its anti competitive practices.

Section 2(t) of the Competition Act (Act) defines ‘relevant product market’ to mean a  market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their  prices and intended use.

The Commission observed that since no two equipment’s (construction and earthmoving)/products can perform exactly the same function, they cannot be substituted by the users/consumers for their end use and thus each equipment/product forms a distinct product market. Accordingly, the market for backhoe loader is a distinct product market which may be taken as the relevant product market in the present case.  Further, in view of the presence of relevant product in the geographical market, conditions of competition for supply of the product in question were assumed to be homogenous throughout India and hence, the relevant geographic market was taken as whole of India. 

It was submitted by Informant that being the market leader, the consumers are dependent on JCB and because of its global brand name and also in view of the details brought on record about JBC on market share, size and resources, dependence of consumer on it, etc., prima facie, it was held that JCB is a dominant entity in the relevant market for manufacture and sale of backhoe loaders in India.

Commission, based on the above, formed a prima facie opinion that JCB by abusing their dominant position in the relevant market sought to stifle competition in the relevant market by denying market access and foreclosing entry of ‘Bull Smart’ in contravention of the provisions of Section 4 of the Act. The matter was accordingly referred to the Director General (DG) to initiate an investigation as per the provisions of Act.

[M/s Bull Machines Pvt. Ltd. vs. M/s JCB India Ltd. and Anr.]
(CCI, 11.03.2014)