Module VI

The relationship between the Competition Commission of India (CCI) and sectoral
regulators (such as TRAI, IRDA, and the Controller of Patents) is characterized by a “balanced
approach” that seeks to maintain comity between market-wide competition enforcement and
industry-specific regulation.
While the CCI has a broad mandate to eliminate anti-competitive practices across all sectors,
specialized regulators govern the technical and operational nuances of specific industries.
1. Statutory Framework for Coordination
The Competition Act, 2002, provides specific mechanisms to ensure that the CCI and sectoral
authorities do not issue conflicting orders:
• Reference by Statutory Authority (Section 21): If a sectoral regulator is considering
a decision that might be contrary to the Competition Act, they may make a reference to
the CCI for its opinion. The CCI must provide its opinion within 60 days, which the
regulator then considers before passing its final order.
• Reference by the Commission (Section 21A): Conversely, if the CCI is considering
an issue that might be contrary to a law implemented by a sectoral regulator, it may
refer the matter to that regulator for an opinion.
• Harmonious Construction (Sections 60 & 62): While Section 60 gives the
Competition Act an overriding effect over inconsistent laws, Section 62 clarifies that
the Act is in addition to, and not in derogation of, other existing laws.
2. Jurisdictional Conflicts and Judicial Interpretation
The interface between the CCI and sectoral regulators has been the subject of significant
litigation to define “jurisdictional boundaries”.
• Telefonaktiebolaget LM Ericsson v. CCI (2016): The Delhi High Court addressed the
conflict between the Patents Act and the Competition Act. It held that while the
Patents Act is a “special act” regarding patent rights, it does not oust the CCI’s
jurisdiction to investigate the abuse of those rights (such as demanding excessive
royalties for Standard Essential Patents). The two acts are intended to be worked
harmoniously.
• CCI v. Bharti Airtel Ltd. (2019): The Supreme Court ruled that in highly regulated
sectors like telecommunications, the sectoral regulator (TRAI) has primacy over
“jurisdictional facts”. The Court held that the CCI should not intervene until the
specialized regulator has first determined the technical rights and obligations of the
parties. Once the regulator identifies conduct that appears anti-competitive, the CCI is
“activated” to investigate under competition law.
3. Role of Competition Advocacy
Beyond enforcement, the CCI proactively engages with sectoral regulators through Advocacy
(Section 49). This includes:
• Interacting with sectoral regulators to encourage debate on competition and informed
economic decision-making.
• Conducting market research and studies in sectors like telecommunications, energy,
and healthcare to identify policy components that may inadvertently restrict
competition.
• Appointing nodal officers and holding workshops with government departments to
enable them to evolve competition-compliant policies.

Cases
1. Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India
(2016)-
This case involved writ petitions filed by Ericsson to challenge orders passed by the CCI under
Section 26(1) of the Competition Act, 2002. These orders directed an investigation into
allegations by Micromax and Intex that Ericsson had abused its dominant position regarding
Standard Essential Patents (SEPs) by demanding excessive and discriminatory royalties.
Key Issues and Arguments
• Jurisdictional Challenge: Ericsson argued that the CCI lacked jurisdiction because the
Patents Act, 1970, is a special law that provides a comprehensive framework for
addressing patentee conduct, including the grant of compulsory licenses for
unreasonable royalty demands.
• Definition of Enterprise: Ericsson contended it was not an “enterprise” under Section
2(h) regarding patent licensing, as patents are not “goods or services”.
• FRAND Commitments: The dispute centered on Ericsson’s obligation to offer its
SEPs on Fair, Reasonable, and Non-Discriminatory (FRAND) terms. Informants
alleged that Ericsson used its dominance to bundle patents and demand royalties
based on the value of the end product rather than the specific patented component.
The Court’s Findings
• Ericsson as an Enterprise: The Delhi High Court held that patents are “goods” as
they constitute intangible property, and therefore, Ericsson’s activities in acquiring and
controlling them qualify it as an “enterprise” under Section 2(h).
• Harmonious Construction: The court ruled that there is no irreconcilable conflict
between the Patents Act and the Competition Act. It emphasized that the two laws are
intended to be worked harmoniously, noting that Section 62 of the Competition Act
states its provisions are in addition to, and not in derogation of, other laws.
 • Remedies are not Mutually Exclusive: The court found that the remedy of a
compulsory license under the Patents Act and the CCI's power to issue cease-and-desist
orders or penalties under Section 27 are materially different and not mutually
exclusive.
• Reasonableness of Conditions: While Section 3(5) exempts certain IPR-related
conditions, this only applies to “reasonable conditions”. The court held that the CCI is
the only authority empowered to decide whether a condition is unreasonable and
therefore anti-competitive.
• Abuse of Dominance: The court noted that seeking injunctive relief by an SEP holder
can exert undue pressure on implementers and may constitute an abuse of dominance
if used to force non-FRAND terms.
Conclusion
The High Court dismissed the writ petitions, concluding that the CCI had the inherent
jurisdiction to investigate complaints regarding the abuse of patent rights. It affirmed that the
pendency of civil suits for patent infringement does not prevent the CCI from performing its
duty to prevent practices that have an adverse effect on competition.

2. Competition Commission of India v. Bharti Airtel Ltd. (Civil Appeal No. 11843 of
2018)
This case is a landmark judgment addressing the jurisdictional boundaries between the
Competition Commission of India (CCI) and sectoral regulators, specifically the Telecom
Regulatory Authority of India (TRAI).
1. Factual Background
The dispute began when Reliance Jio Infocom Limited (RJIL) filed information under
Section 19 of the Competition Act against three major telecom operators (Bharti Airtel,
Vodafone, and Idea Cellular) and the Cellular Operators Association of India (COAI). RJIL
alleged that these incumbents had formed a cartel to deny it Points of Interconnection (POIs),
thereby hindering its entry into the market and causing call failures for its subscribers.
2. The Jurisdictional Conflict
• CCI’s Position: The CCI formed a prima facie opinion that an investigation was
warranted into the alleged anti-competitive agreement under Section 3(3)(b) of the Act.
• The incumbent operators challenged the CCI’s jurisdiction, arguing that the telecom
sector is governed by the TRAI Act, which is a complete code for regulating
interconnection disputes and competition within the industry.
• High Court View: The Bombay High Court quashed the CCI’s investigation order,
holding that technical matters like POI congestion must be settled by TRAI/TDSAT
first.
3. Decision of the Supreme Court
The Supreme Court upheld the High Court’s decision to stay the CCI's investigation,
establishing a “two-step” jurisdictional process for regulated sectors:
• Primacy of the Sectoral Regulator: The Court ruled that in highly regulated sectors,
the sectoral regulator (TRAI) has primacy over “jurisdictional facts”. TRAI is better
equipped to decide technical rights and obligations, such as whether the denial of POIs
was a breach of license conditions.
• Activation of the CCI: The CCI should not intervene until the specialized regulator
has first determined the technical facts of the case. Once TRAI identifies conduct that
appears anti-competitive, the CCI is “activated” to investigate the matter through the
lens of competition law.
• Harmonious Construction: The Court emphasized that while the Competition Act has
an overriding effect under Section 60, it must be read harmoniously with Section 62,
which states the Act is in addition to other laws. The goal is to maintain comity between
regulators and avoid conflicting decisions.
Jurisdictional Comity: The “Two-Step” Process
The relationship between the Competition Commission of India (CCI) and sectoral
regulators is governed by a framework of “harmonious construction,” designed to prevent
conflicting decisions while ensuring that competition law is applied effectively across all
industries.