CCI Dismisses Allegations of Abuse of Dominant Position by the Railways

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Mar 30, 2020

CCI Dismisses Allegations of Abuse of Dominant Position by the Railways

On February 3, 2020, CCI dismissed a complaint by Mr. Meet Shah and Mr. Anand Ranpara (‘Mr. Ranpara’) alleging that the Ministry of Railways (‘Railways’) and the Indian Railways Catering and Tourism Corporation (‘IRCTC’) have abused their dominant position through excessive pricing of railway tickets sold online[1]. Railways and IRTC are together referred to as ‘Indian Railways’.

Mr. Ranpara alleged that the Indian Railways were abusing their dominant position in the market by rounding off the actual base fare of a railway ticket to the next higher multiple of INR 5. CCI held that there existed a prima facie case of abuse of dominance by the Indian Railways and directed the Director General (‘DG’) to cause an investigation in the matter.

CCI defined the relevant market as the ‘market for sale of tickets by railways in India’ and relying on the DG report, regulatory and statutory framework of the relevant market and precedents[2], held that the Indian Railways were dominant in the relevant market.

CCI closed the investigation and dismissed the information, since: (i) the practice of rounding off the fares had bona fide justifications, being a policy decision taken by the Railways in accordance with the statute, and was approved by the Indian Parliament with a view to help the Railways recoup its losses and; (ii) while re-couping losses is not a bona fide justification in every case, the information indicated that the practice of rounding off yielded efficiencies in terms of time and convenience both to the consumers as well as to the Railways, and as such cannot be held to be a threat to competition in India; (iii) post examination of the rounding off policy, CCI observed that it is non-discriminatory and treats each passenger uniformly without any discrimination; and (iv) purchasing tickets from counters is a traditional method and a lot of people in India do so from PRS (Passenger Reservation System) counters directly.

[1] Case No. 30 of 2018. [2] Shri Sharad Kumar Jhunjhunwala and others v. Union of India and others, Case Nos: 100 of 2013; Shri Ismail Zabiulla v. Union of India and others, Case No. 49 of 2014; and Shri Yaseen Bala v. Union of India and others, Case No. 89 of 2014.

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