CCI Dismisses Complaint against the Department of Expenditure, Ministry of Finance

On May 8, 2020, the CCI dismissed a complaint alleging the existence of anti-competitive agreements in contravention of Sections 3(4) and 3(1) of the Act against the Department of Expenditure, Ministry of Finance, Government of India (‘DOE’), Balmer Lawrie & Co. Limited (‘Balmer Lawrie’), and Ashok Travels and Tours (‘Ashok Travels’), by Travel Agents Association of India (‘TAAI’) [1].

TAAI is an association of travel agents created with the objective of protecting the interests of the tourism and travel industry. TAAI also liaisons with the Ministry of Tourism, Government of India (‘GoI’). DOE is the nodal department of the Ministry of Finance and oversees the public financial management system and matters related to the finances of the GoI. Balmer Lawrie and Ashok Travels are the only two exclusive travel agencies approved by the DOE. As a result of this approval, DOE, through several internal circulars had mandated that all travel arrangements by government employees be made through either Balmer Lawrie or Ashok Travels. Further, any non-compliance with the DOE’s circulars would result in the rejection of the travel claims of the government employees. The Informant alleged that mandating the procurement of such services exclusively through Balmer Lawrie and Ashok Travels amounted to a vertical “refusal to deal agreement” under the Act, resulting in foreclosure of the market for private travel agents.

The CCI opined that DOE’s principal activities involved policy making and interface with various ministries, which could not be considered commercial in nature. Accordingly, the CCI held that DOE could not be viewed as an “enterprise” under the Act, especially in relation to circulars which were a manifestation of government policy relating to availing of services as a consumer. The CCI also noted the absence of a vertical relationship between DOE, and Balmer Lawrie and Ashok Travels, owing to which, the arrangement between them could not be assessed as a vertical agreement under the Act. Consequently, the CCI was of the view that no case of contravention of the Act was made against the DOE, Balmer Lawrie, and Ashok Travels, and dismissed the complaint.

[1] Travel Agents Association of India v. Department of Expenditure, Ministry of Finance, Government of India & Ors., Case No. 04 of 2020, order delivered on 8 May 2020.

Published In:Inter Alia Special Edition - Competition Law - June 2020 [ English
Date: June 10, 2020