CCI Orders Investigation against Ministry of Railways and Online Ticketing Operations of Indian Railways – IRCTC regarding Abuse of Dominance in the Market for Sale of Tickets by Railways in India

On November 9, 2018, CCI ordered investigation into the information alleging violation of Section 4 of the Act, filed by Mr. Meet Shah and Mr. Anand Ranpara against Ministry of Railway (‘MoR’) and Indian Railway Catering and Tourism Corporation Limited (‘IRCTC’).[1] The informants in this case alleged that the MoR and IRCTC, according to their pricing policy, round off the base fare of the railway ticket to the next higher multiple of ₹ 5 (as per Circular no. 6 of 2013, the Ministry of Railways, with effect from January 22, 2013). This act of rounding off is an unfair and discriminatory condition imposed on the informants and merits examination of abuse of dominance by the MoR and IRCTC.

In order to determine the alleged abuse of dominant position, CCI held the relevant market to be ‘market for sale of tickets by railways in India’. CCI relied on its earlier decisions in Shri Sharad Kumar Jhunjhunwala v Union of India[2], Shri Ismail Zabiulla v  Union of India[3] and Shri Yaseen Bala v Union of India[4], where MoR and IRCTC were collectively considered as a ‘group’ for the purpose of the Act and dominant in the market of transportation of passengers through railways across India including ancillary segments like ticketing, catering on board, platform facilities, etc. provided by the Indian Railways. On the basis of this decision, CCI held that MoR and IRCTC are dominant in the defined relevant market in the present case.

MoR and IRCTC submitted that the rounding off was done to reduce transaction time and serve passengers expeditiously. CCI was of the opinion that this rationale does not stand with respect to online sale of tickets where the transaction can take place to one paisa precision electronically. CCI also held that MoR and IRCTC had been unable to explain why rounding off is done separately for each passenger even when more than one ticket are booked through one account at the same time for a journey.

CCI found the practice of rounding off actual base fares to the next higher multiple of ₹ 5 by MoR and IRCTC prima facie amount to imposition of unfair conditions in the relevant market. CCI directed the Director General to conduct an investigation into the contravention of Section 4, more particularly Section 4(2)(a)(i) of the Act for unfair or discriminatory pricing or conditions.

[1] Case No. 30 of 2018.
[2] Case No. 100 of 2013
[3] Case No. 49 of 2014
[4] Case No. 89 of 2014

Published In:Inter Alia Special Edition Competition Law November 2018 [ English
Date: November 30, 2018