CCI Dismisses Information against Bentley Systems for Violation of Sections 3 and 4 of the Competition Act

On July 2, 2019, CCI passed an order dismissing an information filed by SOWiL Limited (‘Sowil’), a consultancy, against Bentley Systems India Pvt. Ltd. (‘Bentley’) alleging, inter alia, contravention of the provisions of Sections 3 and 4 of the Act. Sowil provides consultancy in preliminary planning, feasibility studies, traffic studies, railway works, bridges, structures and tunneling.[1] Bentley is a subsidiary of Bentley Systems, Incorporated, registered in the United States of America, and is engaged in the business of providing software solutions to engineers, architects, etc. for design construction, and allied operation of infrastructure.

Sowil had purchased certain software from Bentley and had also entered into a ‘SELECT Agreement’ with Bentley, which enabled Sowil to acquire licensing privileges and services. Sowil primarily alleged that the SELECT agreement imposed a condition to compulsorily renew all licenses, even in a case where Sowil wished to renew three out of the eight licenses it owned because of financial difficulties. Further, to prove dominant position of Bentley, Sowil submitted that: (i) Bentley has a market share of more than 80% in the field of providing ‘software services to more than 170 countries’, without defining a specific relevant market in the information; and (ii) purchase of Bentley’s softwares is a mandatory pre-condition to participate in the tenders floated by State Government and Central Government agencies including Railways, National Highways Authority of India and Rail Vikas Nigam Limited etc.

CCI dismissed the information on the following grounds:

i.      No Anti-Competitive Agreement: CCI held that under Section 3(3) of the Act, only agreements entered into between entities involved in similar trade of goods and services can be tested. Considering Sowil had purchased licenses over Bentley’s software, this arrangement could not qualify as a horizontal relationship. Further, since the licensing services availed by Sowil were in the capacity as a captive consumer, the arrangement could also not be an agreement entered into between entities at different stages/levels of the production chain.

ii.      Test under Section 4: To test violation of Section 4 of the Act, CCI defined the relevant market as the ‘supply of computer-aided design (CAD) software services in civil engineering works in India’, bearing in mind that CAD software used in different fields are not substitutable and the software used by Sowil is related to designing for use in civil construction. CCI held that in this relevant market, Bentley was not in a dominant position considering that there were many competitors in the market providing CAD disabling (e.g., AutoDesk, Carlson, Site3D, SierraSoft, Trimble etc.).

iii.     Other Allegations to Prove Dominance: After considering the tenders and documents relied on by Sowil, CCI concluded that they did not support Sowil’s allegation that only Bentley’s software have to be used to qualify for participation in the tender process as a pre-condition, since the tenders allowed other products viz., AutoDesk’s Civil 3D or other similar software for designing of railway projects without any exclusivity.

[1] Case no. 8 of 2019

Published In:Inter Alia Special Edition- Competition Law - August 2019 [ English
Date: August 7, 2019